Sociedad Química y Minera de Chile S.A. (SQM, NYSE)
Industry: Basic Materials / Specialty Chemicals
Annual report, fiscal year 2019


## Sociedad Química y Minera de Chile S.A.
Annual Report 2019






## 1) INDEX

2) IDENTIFICATION OF THE ENTITY.....3
2) A) IDENTIFICATION OF THE ENTITY: BASIC IDENTIFICATION.....3
2) B) IDENTIFICATION OF THE ENTITY: LEGAL CONSTITUTION.....3
2) C) IDENTIFICATION OF THE ENTITY: CONTACT INFORMATION.....3

3) DESCRIPTION OF BUSINESS ENVIRONMENT.....4
3) A) DESCRIPTION OF BUSINESS ENVIRONMENT: HISTORICAL INFORMATION.....4
3) B) DESCRIPTION OF BUSINESS ENVIRONMENT: INDUSTRIAL SECTOR.....6
3) C) DESCRIPTION OF BUSINESS ENVIRONMENT: ACTIVITIES AND BUSINESSES.....9
3) D) DESCRIPTION OF BUSINESS ENVIRONMENT: PROPERTY AND FACILITIES.....35
3) E) DESCRIPTION OF BUSINESS ENVIRONMENT: RISK FACTORS.....55
3) F) DESCRIPTION OF BUSINESS ENVIRONMENT: CAPITAL EXPENDITURE.....72

4) OWNERSHIP AND SHARES.....75
4) A) OWNERSHIP AND SHARES: OWNERSHIP.....75
4) B) OWNERSHIP STRUCTURE AND SHARES: SHARES AND THEIR CHARACTERISTICS AND RIGHTS.....80

5) SOCIAL RESPONSIBILITY AND SUSTAINABLE DEVELOPMENT.....84
5) A) SOCIAL RESPONSIBILITY AND SUSTAINABLE DEVELOPMENT: DIVERSITY WITHIN THE BOARD OF DIRECTORS AS OF DECEMBER 31, 2018.....84
5) B) SOCIAL RESPONSIBILITY AND SUSTAINABLE DEVELOPMENT: DIVERSITY WITHIN EXECUTIVE MANAGEMENT AS OF DECEMBER 31, 2018.....84
5) C) SOCIAL RESPONSIBILITY AND SUSTAINABLE DEVELOPMENT: DIVERSITY WITHIN THE ORGANIZATION AS OF DECEMBER 31, 2018.....85
5) D) SOCIAL RESPONSIBILITY AND SUSTAINABLE DEVELOPMENT: SALARY GAP BY GENDER.....86

6) MANAGEMENT AND PERSONNEL.....88
6) A) MANAGEMENT AND PERSONNEL: ORGANIZATIONAL CHART.....88
6) B) MANAGEMENT AND PERSONNEL: INFORMATION ABOUT THE BOARD OF DIRECTORS.....88
6) C) MANAGEMENT AND PERSONNEL: INFORMATION ABOUT THE DIRECTORS' COMMITTEE.....92
6) D) MANAGEMENT AND PERSONNEL: MAIN EXECUTIVES.....94
6) E) MANAGEMENT AND PERSONNEL: NUMBER OF EMPLOYEES.....95
6) F) MANAGEMENT AND PERSONNEL: SHARE OWNERSHIP OF EXECUTIVE OFFICERS AND BOARD MEMBERS.....96

7) INFORMATION ABOUT SUBSIDIARIES AND ASSOCIATES.....97
7) A) INFORMATION ABOUT SUBSIDIARIES AND ASSOCIATES: SUBSIDIARIES AND ASSOCIATES.....97
7) B) INFORMATION ABOUT OTHER INVESTEES.....121

8) INFORMATION ABOUT RELEVANT OR ESSENTIAL FACTS.....126

9) SUMMARY OF COMMENTS AND PROPOSALS BY SHAREHOLDERS AND THE DIRECTORS' COMMITTEE.....136
10) FINANCIAL REPORTS.....137
10) A) FINANCIAL REPORTS OF THE REPORTING ENTITY.....137
10) B) SUMMARY FINANCIAL STATEMENTS.....360

11) RESPONSIBILITY STATEMENT.....396



## 2) IDENTIFICATION OF THE ENTITY

## 2) A) IDENTIFICATION OF THE ENTITY: BASIC IDENTIFICATION

Company Name: Sociedad Química y Minera de Chile S.A.

Abbreviated Company Name: SQM

Legal Address: El Trovador 4285, Las Condes, Santiago, Chile

Chilean Taxpayer ID: 93.007.000-9

Type of Entity: Open stock corporation

## 2) B) IDENTIFICATION OF THE ENTITY: LEGAL CONSTITUTION

SQM was founded under the laws of the Republic of Chile. The Company was constituted by public deed issued on June 17, 1968 by Mr. Sergio Rodríguez Garcés, Public Notary of Santiago. Its existence was approved by Decree No. 1,164 of June 22, 1968, of the Ministry of Finance, and it was registered on June 29, 1968, in the Business Registry of Santiago, on page 4,537 No. 1,992.

## 2) C) IDENTIFICATION OF THE ENTITY: CONTACT INFORMATION

Corporate Headquarters:

Address: El Trovador 4285, Las Condes, Santiago, Chile
Telephone: +56 2 24252000

Fax: +56 2 24252268

Website: www.sqm.com

To contact our investor relations team:

Gerardo Illanes

CFO and Vice President of Corporate Finance

gerardo.illanes@sqm.com

Telephone: +56 2 24252485

Kelly O'Brien

Head of Investor Relations

kelly.obrien@sqm.com

Telephone: +56 2 24252074

Irina Axenova

Investor Relations

irina.axenova@sqm.com

Telephone: +56 2 24252280



## 3) DESCRIPTION OF BUSINESS ENVIRONMENT

## 3) A) DESCRIPTION OF BUSINESS ENVIRONMENT: HISTORICAL INFORMATION

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

We were formed in 1968 through a joint venture between Compañía Salitrera Anglo Lautaro S.A. (“Anglo Lautaro”) and the Production Development Corporation (Corporación de Fomento de la Producción or “Corfo”), a Chilean government entity. Three years after our formation, in 1971, Anglo Lautaro sold all of its shares to Corfo, and we were wholly owned by the Chilean Government until 1983. In 1983, Corfo began a process of privatization by selling our shares to the public and subsequently listing such shares on the Santiago Stock Exchange. By 1988, all of our shares were publicly owned. Our Series B ADSs have traded on the NYSE under the ticker symbol “SQM” since 1993. We accessed international capital markets again for the issuance of additional ADSs in 1995 and 1999. On December 21, 2006, two groups of shareholders, the “Pampa Group” (which includes the company Sociedad de Inversiones Pampa Calichera S.A. and its related companies, Inversiones Global Mining Chile Limitada and Potasios de Chile S.A.) and Kowa Group (which includes the companies Kowa Company Ltd., Inversiones La Esperanza (Chile) Limitada, Kochi S.A and La Esperanza Delaware Corporation) signed a joint agreement and became the controlling group of SQM.

Since our inception, we have produced nitrates and iodine, which are obtained from the caliche ore deposits in northern Chile. In 1985, we began to use heap leaching processes to extract nitrates and iodine, and in 1986 we started to produce potassium nitrate at our Coya Sur facility. Between 1994 and 1999, we invested approximately US$300 million in the development of the Salar de Atacama project in northern Chile, which enabled us to produce potassium chloride, lithium carbonate, potassium sulfate and boric acid.

From 2000 through 2004, we principally consolidated the investments carried out in the preceding five years. We focused on reducing costs and improving efficiencies throughout the organization. In addition, in 2001, we signed a commercial distribution agreement with the Norwegian company Yara International ASA, in order to take advantage of cost synergies in the Specialty Plant Nutrition business line.

Starting in 2005, we began strengthening our leadership position in our core businesses through a combination of capital expenditures and advantageous acquisitions and divestitures. Our acquisitions have included the Kemira Emirates Fertiliser Company (“Kefco”) in Dubai in 2005 and the iodine business of Royal DSM N.V. (“DSM”) in 2006. We also entered into a number of joint ventures, including a joint venture with Miga Corporation (“Miga”), signed in 2008, for the production of potassium nitrate, and SQM VITAS, our joint venture with the French Roullier Group. Pursuant to the latter joint venture, in 2010, we launched a new line of soluble phosphate products, and in 2012 we built new plants for the production of water-soluble fertilizers in Brazil (Candeias), Peru and South Africa (Durban). We have also sold: (i) Fertilizantes Olmeca, our former Mexican subsidiary, in 2006, (ii) our stake in Impronta S.R.L., our former Italian subsidiary, in 2007 and (iii) our former butyllithium plant located in Houston, Texas, in 2008. These sales allowed us to concentrate our efforts on our core products.

The capital expenditure program has allowed us to add new products to our product lines and increase the production capacity of our existing products. In 2005, we started production of lithium hydroxide at a



plant in the Salar del Carmen, near the city of Antofagasta in the north of Chile. In 2007, we completed the construction of a new prilling and granulating plant. In 2011, we completed expansions of our lithium carbonate capacity, achieving 48,000 metric tons of capacity per year. Since 2010, we have continued to expand our production capacity of potassium products in our operations in the Salar de Atacama. In 2011, we completed the construction of a new potassium nitrate facility in Coya Sur, increasing our overall production capacity of potassium nitrate by 300,000 metric tons per year. In 2013, we completed expansions in the production capacity of our iodine plants in Nueva Victoria. Our capital expenditure program also includes exploration for metallic minerals. Our exploration efforts have led to discoveries that in some cases may result in sales of the discovery and the generation of royalty income in the future. Within this context, in 2013 we sold our royalty rights to the Antucoya mining project to Antofagasta Minerals. In 2013 we also opened a trading office in Thailand.

In 2014, we invested in the development of new extraction sectors and production increases in both nitrates and iodine at Nueva Victoria, reaching an approximate production capacity (including the Iris facility) of 8,500 metric tons per year of iodine at the facility. We also issued a bond in the international capital markets for US$250 million, primarily to refinance existing indebtedness.

In 2015, we focused on increasing the efficiency of our operations. Within this context, we announced a plan to restructure our iodine and nitrate operations. In an effort to take advantage of our highly efficient production facilities at our Nueva Victoria site, we decided to suspend the mining and nitrate operations and reduce iodine production at our Pedro de Valdivia site. During the year, we increased our iodine production capacity at Nueva Victoria to approximately 9,000 metric tons per year.

In 2015, we focused on increasing the efficiency of our operations. Within this context, we announced a plan to restructure our iodine and nitrate operations. In an effort to take advantage of our highly efficient production facilities at our Nueva Victoria site, we decided to suspend the mining and nitrate operations and reduce iodine production at our Pedro de Valdivia site. During 2017, we increased our iodine production capacity at Nueva Victoria to approximately 10,000 metric tons per year. We continued expanding in 2018, and today, including Pedro de Valdivia and Nueva Victoria, our current effective iodine capacity is approximately 14,000 metric tons per year.

In 2016, we entered into a 50/50 joint venture with Lithium Americas to develop the Minera Exar lithium project in Caucharí-Olaroz in the Jujuy province of Argentina. Our interest was sold to Ganfeng Lithium Netherlands Co., BV in 2018. Ganfeng is responsible for a US$50 million deferred payment to us if certain sales goals are met by the project. In 2016, we also made a capital contribution of US$20 million to Elemental Minerals Limited (“Elemental Minerals”), an Australian based company whose main assets are various potassium deposits in the Republic of Congo. We invested approximately US$20 million in exchange for 18% of the company, and a right of first refusal for approximately 20% of the total potash production of Elemental Minerals. Following this transaction at the end of 2016, Elemental Minerals changed its name to Kore Potash Limited. The State General Reserve Fund of Oman invested US$20 million.

In 2017, we continued to expand our operations outside Chile and, together with our subsidiary SQM Australia Pty, we entered into an agreement to acquire 50% of the assets of the Mt. Holland lithium project in Western Australia. We entered into a 50/50 unincorporated joint venture with Kidman Resources Limited (“Kidman”), with respect to the Mt. Holland lithium project, to design, construct and operate a mine, concentrator and refinery to produce approximately 45,000 metric tons of lithium hydroxide per year. SQM Australia Pty committed to pay a price of US$110 million for the 50% of the Mt. Holland assets, which was split into an initial payment of US$25 million and a deferred payment of US$87.5 million, both payments subject to certain conditions precedent. SQM Australia Pty paid an additional (i) US$10 million as part of the initial payment, and (ii) US$30 million once the deferred payment took place. All payments subject to conditions under the purchase agreement with Kidman were executed by



December 2018. These investments are not included in the capital expenditure program amounts discussed in the section below. These investments were carried out with internal financing.

On September 23, 2019, Wesfarmers Limited (“Wesfarmers”) acquired all the issued ordinary shares in Kidman, becoming a 50% partner in the Mt. Holland lithium project in the joint venture with SQM Australia Pty.

On January 23, 2020, following the completion of a definitive feasibility study, we decided together with Wesfarmers to defer the final investment decision until the first quarter of 2021.

## 3) B) DESCRIPTION OF BUSINESS ENVIRONMENT: INDUSTRIAL SECTOR

## i) PRODUCTS AND SERVICES

SQM is an integrated producer and seller of specialty plant nutrients, iodine, lithium, potassium fertilizers, and industrial chemicals. Our products are based on the development of high quality natural resources that make us a cost leader, supported by an international trading network specialized in sales in approximately 110 countries. SQM’s development strategy aims to maintain and enhance our global leadership in all of our business lines.

For further information, see section 3) C) Description of Business Environment: Activities and Businesses.

## ii) COMPETITION AND MARKET SHARE

See section 3) C) Description of Business Environment: Activities and Businesses.

## iii) LEGAL FRAMEWORK

## Government Regulations

## Regulations in Chile Generally

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

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

Under Law No. 16,319 that created the Chilean Nuclear Energy Commission (Comisión Chilena de Energía Nuclear or “CCHEN”), we have an obligation to the CCHEN regarding the exploitation and sale of lithium from the Salar de Atacama, which prohibits the use of lithium for nuclear fusion. In addition, CCHEN has imposed annual quotas that limit the total tonnage of lithium authorized to be sold.

We also hold water use rights granted by the respective administrative authorities and which enable us to have a supply of water from rivers or wells near our production facilities sufficient to meet our current operating requirements. See section 3) E) Description of Business Environment: Risk Factors. The Chilean



Constitution, the Water Code and related regulations are subject to change, which could have a material adverse impact on our business, financial condition and results of operations.

We operate port facilities at Tocopilla, Chile for the shipment of products and the delivery of raw materials in conformity with maritime concessions, which have been granted by the respective administrative authority. These concessions are normally renewable on application, provided that such facilities are used as authorized and annual concession fees are paid.

In 2005, Law No. 20,026, known as the Law to Establish a Specific Tax on Mining Activity” (Ley que Establece un Impuesto Específico a la Actividad Minera or the “Royalty Law”), established a royalty tax to be applied to mining activities developed in Chile. In 2010, modifications were made to the law and taxes were increased.

On September 29, 2014, the Tax Reform was published, introducing significant changes to the Chilean taxation system and strengthening the powers of the SII to control and prevent tax avoidance. Subsequently, on February 8, 2016, Law No. 20,899 that simplifies the income tax system and modifies other legal tax provisions was published. On February 24, 2020, Law No. 21,210 to modernize the tax legislation was published. As a result of these reforms, open stock corporations, such as SQM, are subject to the shareholder tax regime. The corporate tax rate that applies to us increased to 27% in 2018.

The Chilean government may again decide to levy additional taxes on mining companies or other corporations in Chile, and such taxes could have a material adverse impact on our business, financial condition and results of operations.

We are also subject to the Chilean Labor Code and the Subcontracting Law, which are overseen by the Labor Authority (Dirección del Trabajo), the National Geology and Mining Service (Servicio Nacional de Geología y Minería or “Sernageomin”), and the National Health Service. Recent changes to these laws and their application may have a material adverse effect on our business, financial condition and results of operations. See “Section 3E. Description of Business Environment: Risk Factors – We are exposed to labor strikes and labor liabilities that could impact our production levels and costs”.

In addition, we are subject to Law No. 20,393, which establishes criminal liability for legal entities, for the crimes of (a) asset laundering, (b) financing terrorism and (c) bribery. Potential sanctions for violations under this law could include (i) fines, (ii) loss of certain governmental benefits during a given period, (iii) a temporary or permanent bar against the corporation executing contracts with governmental entities, and (iv) dissolution of corporation.

Finally, we are governed by the Securities Law and Law No. 18,046 on Corporations (Ley de Sociedades Anónimas or the “Chilean Corporations Act”), which regulates corporate governance. Specifically, the Chilean Corporations Act regulates, among other things, independent director requirements, disclosure obligations to the general public and to the CMF, as well as regulations relating to the use of inside information, the independence of external auditors, and procedures for the analysis of transactions with related parties.

There are currently no material legal or administrative proceedings pending against us except as discussed in Note 22.1 to our Consolidated Financial Statements and below under “Safety, Health and Environmental Regulations in Chile.”

## Safety, Health and Environmental Regulations in Chile

Our operations in Chile are subject to both national and local regulations related to safety, health and environmental protection. In Chile, the main regulations on these matters that are applicable to us are the Mine Health and Safety Act of 1989 (Reglamento de Seguridad Minera or the “Mine Health and Safety



Act”), the Health Code (Código Sanitario), the Health and Basic Conditions Act of 1999 (Reglamento sobre Condiciones Sanitarias y Ambientales Básicas en los Lugares de Trabajo or the “Health and Basic Conditions Act”), the Subcontracting Law and the Environmental Law of 1994, amended in 2010 (Ley sobre Bases Generales del Medio Ambiente or the “Environmental Law”).

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

The Mine Health and Safety Act protects workers and nearby communities against health and safety hazards, and it provides for enforcement of the law where compliance has not been achieved. Our Internal Mining Standards (Reglamentos Internos Mineros) establish our obligation to maintain a workplace where safety and health risks are managed appropriately. We are subject to the general provisions of the Health and Basic Conditions Act, our own internal standards and the provisions of the Mine Health and Safety Act. In the event of non-compliance, the Ministry of Health and particularly the Sernageomin are entitled to use their enforcement powers to ensure compliance with the law.

In November 2011, the Ministry of Mining enacted Law No. 20,551 that Regulates the Closure of Mining Sites and Facilities (Ley que Regula el Cierre de Faenas e Instalaciones Mineras). This statute entered in force in November 2012 and required all mining sites to present or update their closure plans as of November 2014. SQM has fulfilled this requirement for all of its mining sites and facilities. The main requirements of the law are related to disclosures to the Sernageomin regarding decommissioning plans for each mining site and its facilities, along with the estimated cost to implement such plans. The mining site closure plans are approved by Sernageomin and the corresponding financial assurances are subject to approval by the CMF. In both cases, SQM has received the requisite approvals.

We continuously monitor the impact of our operations on the environment and on the health of our employees and other persons who may be affected by such operations. We have made modifications to our facilities in an effort to eliminate any adverse impacts. Also, over time, new environmental standards and regulations have been enacted, which have required minor adjustments or modifications of our operations. We anticipate that additional laws and regulations will be enacted over time with respect to environmental matters. There can be no assurance that future legislative or regulatory developments will not impose new restrictions on our operations. We are committed to continuously improving our environmental performance through our Environmental Management System (“EMS”), voluntary evaluations, such as Ecovadis, and international certifications, such as the Responsible Conduct certification from the Chilean Industrial Chemicals Association, which applies to our operations at Nueva Victoria, and the Protect&Sustain certification from the International Fertilizer Association, which applies to our operations at Coya Sur, the Salar de Atacama, Tocopilla, Antofagasta and Santiago.

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

## International Regulations

We are subject to complex regulatory requirements in the various jurisdictions in which we operate, including the following:



At the end of 2018, the European Parliament, the Council of Member States of the European Union and the European Commission agreed to a new regulation for fertilizers. The new European regulation reduces the maximum content limit of perchlorates in inorganic fertilizer with macronutrients, such as the potassium nitrate sold by us, to 0.005%. In addition to this limit, the regulation incorporates maximum levels of other pollutants, such as heavy metals, and establishes a new procedure – called a conformity assessment – to be undertaken prior to the commercialization of fertilizers in Europe. The fertilizers that we sell contain less than 0.005% of perchlorate; however, the Food Chain Security unit of the General Health and Consumer Affairs Council initiated a revision of the perchlorate limits in food that have been in force and effect since June 2015, following the European Food Safety Authority’s (“EFSA”) evaluation of human exposure to perchlorate in food and in drinkable water. We expect a new definition of the new limits of perchlorates in food in the near term.

In South Korea SQM pre-registered five chemical substances in the first half of 2019 under the K-REACH regulations, using the figure of the Exclusive Representative, in order to facilitate the regulatory compliance of our clients in this market. On January 15, 2019, the “Occupational Safety and Health Act of Korea (K-OSHA”) law that applied to the chemical safety data sheets that SQM uses in this country was modified. The most important modification was related to that the safety data sheets must be reported to the competent authority. This modification is effective two years after publication.

On March 12, 2019, Australia approved a new “Industrial Chemicals (General) Rules 2019”, which regulates the import and production of industrial chemicals and replaces the current regulations. This new regulation enters into force on July 1, 2020 and establishes the import requirements for chemical substances for the product and for the importer, applying to iodine imports by SQM Oceania in Australia.

On May 25, 2019, Japan updated its standards for classification and labeling of chemical products (JIS Z 7252: 2019 & 7253: 2019) to certify them with the sixth version of UN-GHS. This modification has a transition period of three years, which will imply review of safety data sheets and labeling of the products that SQM sells in Japan, in 2020-2021.

During 2019, the member countries of the Eurasian Economic Union, which includes Russia, initiated a chemical inventory update process in which companies must notify the chemical substances currently produced or imported into EURASIA. A pilot program was carried out in which Russia invited some companies to participate in reporting certain chemical substances, and SQM worked with customers to provide such report. This reporting will soon be mandatory and non-notified substances will be subject to registration in accordance with Technical Regulation TR EAEU 041/2017 of Eurasian Economic Union on Safety of Chemical Products, Eurasia-REACH.

On September 12, 2019, the Customs Standards Compendium was modified in Chile, modifying the requirements for customs declaration of products exported by SQM.

## 3) C) DESCRIPTION OF BUSINESS ENVIRONMENT: ACTIVITIES AND BUSINESSES

## The Company

We believe that we are the world’s largest producer of potassium nitrate and iodine and one of the world’s largest lithium producers. We also produce specialty plant nutrients, iodine derivatives, lithium derivatives, potassium chloride, potassium sulfate and certain industrial chemicals (including industrial nitrates and solar salts). Our products are sold in approximately 110 countries through our worldwide distribution network, with 89% of our sales in 2019 derived from countries outside Chile.

Our products are mainly derived from mineral deposits found in northern Chile. We mine and process caliche ore and brine deposits. The caliche ore in northern Chile contains the only known nitrate and iodine deposits in the world and is the world’s largest commercially exploited source of natural nitrates. The



brine deposits of the Salar de Atacama, a salt-encrusted depression in the Atacama Desert in northern Chile, contain high concentrations of lithium and potassium as well as significant concentrations of sulfate and boron.

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

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

For the year ended December 31, 2019, we had revenues of US1,943.7 million, gross profit of US$560.1 million and profit attributable to controlling interests of US$278.1 million. Our worldwide market capitalization as of December 31, 2019 was approximately US$7.0 billion.

Specialty Plant Nutrition: We produce four main types of specialty plant nutrients: potassium nitrate, sodium nitrate, sodium potassium nitrate and specialty blends. We also sell other specialty fertilizers including third party products. All of these specialty plant nutrients are used in either solid or liquid form mainly on high value crops such as vegetables, fruits and flowers. Our nutrients are widely used in crops that employ modern agricultural techniques such as hydroponics, green housing, fertigation (where fertilizer is dissolved in water prior to irrigation) and foliar application. According to the type of use or application, our products are primarily marketed under the following brands: UltrasoR \( ^{®} \)  (fertigation), Qrop \( ^{®} \)  (open field application), SpeedfoR \( ^{®} \)  (foliar application) and Allganic \( ^{®} \)  (organic farming). Specialty plant nutrients have certain advantages over commodity fertilizers, such as rapid and effective absorption (without requiring nitrification), superior water solubility, increased soil pH (which reduces soil acidity) and low chloride content. One of the most important products in this business line is potassium nitrate, which is sold in crystalline or prill form, allowing for multiple application methods. Crystalline potassium nitrate products are ideal for application by fertigation and foliar sprays, and potassium nitrate prills are suitable for soil applications.

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



Iodine and its Derivatives: We believe that we are the world’s leading producer of iodine and iodine derivatives, which are used in a wide range of medical, pharmaceutical, agricultural and industrial applications, including x-ray contrast media, polarizing films for LCD/LED, antiseptics, biocides and disinfectants, in the synthesis of pharmaceuticals, electronics, pigments and dye components.

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

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

Industrial Chemicals: We produce three industrial chemicals: sodium nitrate, potassium nitrate and potassium chloride. Sodium nitrate is used primarily in the production of glass, explosives, metal treatment, metal recycling and insulation materials among others. Potassium nitrate is used in the manufacturing of specialty glass, and it is also an important raw material for the production of frits for the ceramics, enamel industries, metal treatment and pyrotechnics. Solar salts, a combination of potassium nitrate and sodium nitrate, are used as a thermal storage medium in concentrated solar power plants. Potassium chloride is a basic chemical used to produce potassium hydroxide, and it is also used as an additive in oil drilling as well as in food processing, among other uses. We market our industrial chemicals using the following brands: QSodiumNitrate \( ^{™} \) , QPotassiumNitrate \( ^{™} \) , and QPotassiumChloride \( ^{™} \) .

Other Products and Services: We also sell other fertilizers and blends, some of which we do not produce. We are the only company that produces and distributes the three main potassium sources: potassium nitrate, potassium sulfate and potassium chloride.

The following table shows the percentage breakdown of our revenues for 2019, 2018 and 2017 according to our product lines:

<table><tr><td></td><td>2019</td><td>2018</td><td>2017</td></tr><tr><td>Specialty Plant Nutrition</td><td>37%</td><td>35%</td><td>32%</td></tr><tr><td>Iodine and Derivatives</td><td>19%</td><td>14%</td><td>12%</td></tr><tr><td>Lithium and Derivatives</td><td>26%</td><td>32%</td><td>30%</td></tr><tr><td>Potassium</td><td>11%</td><td>12%</td><td>18%</td></tr><tr><td>Industrial Chemicals</td><td>5%</td><td>5%</td><td>6%</td></tr><tr><td>Other</td><td>2%</td><td>2%</td><td>2%</td></tr><tr><td>Total</td><td>100%</td><td>100%</td><td>100%</td></tr></table>

## Business Strategy

SQM is a global company that develops and produces diverse products for several industries essential for human progress, such as health, nutrition, renewable energy and technology through innovation and technological development. We aim to maintain our leading world position in the lithium, potassium nitrate, iodine and thermo-solar salts markets by producing high-quality products and promoting a high-quality culture to meet the dynamic and changing requirements of our customers.

We are a company built and managed by people committed to excellence, safety and integrity. We work every day to build a culture of excellence by encouraging and promoting creativity, agility and innovation



in the workplace and ensuring equality of opportunities, inclusion and diversity. We seek to create opportunities for professional development so that people achieve their maximum potential. We make ongoing efforts to meet the high standards of integrity described in our code of ethics while actively identifying and implementing ideas to better meet these standards. We strive for safe and accident-free operations by promoting conduct that favors the physical safety and psychological well-being of everyone who works directly and indirectly with the Company.

We participate in the development of the well-being of local communities by supporting projects and activities with a focus on education, business development, and protection of the environment and historical heritage. We will continue to create value for all of our stakeholders through responsible management of natural resources, sustainable expansion projects and improvement of our existing operations, with a focus on minimizing our environmental impacts by reducing our carbon, energy and water footprints and working together with our shareholders, employees, customers, suppliers and communities.

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

## Specialty Plant Nutrition

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

## Iodine and its Derivatives

Our strategy in our iodine business is to: (i) reach and maintain a sufficient market share of the iodine market in order to optimize the use of our available production capacity; (ii) encourage demand growth and promote new iodine uses; (iii) participate in iodine recycling projects through the Ajay-SQM Group (“ASG”); (iv) reduce our production costs through improved processes and higher productivity in order to compete more effectively and (v) supply a product with consistent quality according to the requirements of our customers.

## Lithium and its Derivatives

Our strategy in our lithium business is to: (i) strategically allocate our sales of lithium carbonate and lithium hydroxide; (ii) encourage demand growth and promote new lithium uses; (iii) selectively pursue opportunities in the lithium derivatives business by creating new lithium compounds; (iv) reduce our production costs through improved processes and higher productivity in order to compete more effectively; (v) supply a product with consistent quality according to the requirements of our customers and (vi) diversify our operations geographically and jurisdictionally.

## Potassium

Our strategy in our potassium business is to: (i) offer a portfolio of potassium products, including potassium sulfate, potassium chloride and other fertilizers, to our traditional markets; (ii) have flexibility



to offer crystalized (standard) or granular (compacted) form products according to market requirements; (iii) focus on markets where we have logistical advantages and synergies with our specialty plant nutrition business and (iv) supply a product with consistent quality according to the specific requirements of our customers.

## Industrial Chemicals

Our strategy in our industrial chemical business is to: (i) maintain our leadership position in the industrial nitrates market; (ii) encourage demand growth in different applications as well as exploring new potential ones; (iii) become a long-term, reliable supplier for the thermal storage industry, maintaining close relationships with R&D programs and industrial initiatives; (iv) reduce our production costs through improved processes and higher productivity in order to compete more effectively and (v) supply a product with consistent quality according to the requirements of our customers.

## New Business Ventures

We constantly evaluate opportunities that are consistent with our existing and new businesses. We seek to acquire interests in projects both inside and outside of Chile where we believe we have sustainable competitive advantages, and we hope to continue doing so in the future.

In addition, we are actively conducting exploration for metallic minerals in the mining properties we own. If such minerals are found, we may decide to exploit, sell or enter into an association to extract these resources. Our exploration efforts are currently focused on the layer of bedrock that lies beneath the caliche ore that we use as the primary raw material in the production of iodine and nitrates. This bedrock has significant potential for metallic mineralization, particularly copper and gold. A significant portion of our mining properties are located in the Antofagasta region of Chile, where many large copper producers operate.

We have an in-house geological exploration team that explores the area directly, identifying drilling targets and assessing new prospects. In 2019, the team identified six new targets and confirmed mineralization in several of the targets. The number of perforated meters reached 52,374 meters and were made with four machines of which three were internal and the other external. We also have a metal business development team that works to engage partners interested in investing in metal exploration within our mining properties. As of December 31, 2019, we had eight option agreements in place with six companies, including junior mining companies, private equity firms and large mining companies. We maintain an exploration and purchase option agreement for an area of interest with a junior Canadian mining company and we are participating in the formation of two joint ventures as a result of exercising an option agreement a junior mining company.

## Main Business Lines

## Specialty Plant Nutrition

In 2019, specialty plant nutrients revenues decreased to US$723.9 million, representing 37.2% of our total revenues for that year. We believe that we are the world’s largest producer of potassium nitrate. We estimate that our sales accounted for approximately 51% of global potassium nitrate sales for all applications by volume in 2019, a decrease from 54% in 2018. During 2019, the potassium nitrate market remained flat compared to 2018. These estimates do not include potassium nitrate produced and sold locally in China, only Chinese net imports and exports.

In addition to potassium nitrate, we produce the following specialty plant nutrients: sodium nitrate, sodium potassium nitrate and specialty blends (containing various combinations of nitrogen, phosphate and potassium and generally known as “NPK blends”).



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

Our specialty plant nutrients advantages include that they:

- are fully water soluble, allowing their more efficient use in hydroponics, fertigation, foliar applications and other advanced agricultural techniques thus improving the water use efficiency of crops to help conserve water;

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

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

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

• possess trace elements, which promote disease resistance in plants; and

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

## Specialty Plant Nutrition: Market

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

Over the last ten years, the compound annual growth rate for vegetable production per capita was 3% while the compound annual growth rate for the world population was closer to 1%.

Worldwide scarcity of water and arable land drives the development of new agricultural techniques to maximize the use of these resources. Irrigation has grown at an average annual rate of 1% during the last 20 years (a pace similar to population growth). However, microirrigation has grown at 10% per year over the same period. Microirrigation systems, which include drip irrigation and micro-sprinklers, are the most efficient forms of technical irrigation. These applications require fully water-soluble plant nutrients. Our nitrate-based specialty plant nutrients are fully soluble in water and provide nitrogen in nitric form, which helps crops absorb these nutrients faster than they absorb urea- or ammonium-based fertilizers, facilitating a more efficient application of nutrients to the plant and thereby increasing the crop’s yield and improving its quality.

The ratio of microirrigation to total irrigated hectares in Asia is approximately 3%, the lowest ratio of any region in the world. This represents a high potential market for microirrigation, which is reflected in the high growth rates in Asia in recent years.

Potassium nitrate is an important market in China, although currently its demand is largely fulfilled by domestic producers. Demand totals approximately 400,000 to 420,000 metric tons, of which approximately 130,000 metric tons is related to the tobacco industry and approximately 120,000 metric tons is related to the horticulture business. Of the total, between 20,000 and 35,000 metric tons are imports.

## Specialty Plant Nutrition: Our Products



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

The following table shows our sales volumes of and revenues from specialty plant nutrients for 2019, 2018 and 2017:

<table><tr><td></td><td>2019</td><td>2018</td><td>2017</td></tr><tr><td>Sales volumes (Th. MT)</td><td></td><td></td><td></td></tr><tr><td>Sodium nitrate</td><td>30.2</td><td>25.0</td><td>26.7</td></tr><tr><td>Potassium nitrate and sodium potassium nitrate</td><td>617.4</td><td>673.4</td><td>601.4</td></tr><tr><td>Specialty blends \( ^{(1)} \)</td><td>238.9</td><td>242.5</td><td>209.0</td></tr><tr><td>Other specialty plant nutrients \( ^{(2)} \)</td><td>155.3</td><td>141.6</td><td>129.1</td></tr><tr><td>Revenues (in US milions)</td><td>723.9</td><td>781.8</td><td>697.3</td></tr></table>

(1) Includes Yara’s products sold pursuant to our commercial agreement.

(2) Includes trading of other specialty fertilizers.

In 2019, our specialty plant nutrients revenues decreased to US$723.9 million, representing 37.2% of our total revenues for that year and a 7.4% decrease from US$781.8 million in specialty plant nutrients revenues in 2018. Prices decreased approximately 3.8% in 2019.

Depending on the systems used to apply specialty nutrients, fertilizers can be classified as specialty field fertilizers or water-soluble fertilizers.

Specialty field fertilizers are applied directly to the soil, manually or in a mechanized fashion. Their high solubility levels, lack of chloride and absence of acidic reactions make them particularly advantageous for tobacco, potatoes, coffee, cotton and a wide range of fruits and vegetables.

Water-soluble fertilizers are specialty nutrients that are delivered to the crops using modern irrigation systems. As these systems feature refined technology, the products used in them must be highly soluble, rich in nutrients, free of impurities and insoluble substances, and with a low salinity index. The leading nutrient in this segment is potassium nitrate, whose optimal balance of nitric nitrogen and chloride-free potassium (the two macronutrients most needed by plants) make it an indispensable source of nutrition for crops that use modern irrigation systems.

Potassium nitrate is widely known to be a vital component in foliar feeding applications, where usage is recommended in order to stave off nutritional deficiencies before the first symptoms appear, correct any deficiencies that arise and prevent physiological stress. This nutrient also helps promote a suitable balance between fruit production and/or growth, and plant development, particularly in crops with physiological disorders.

Foliar feeding with potassium nitrate can have beneficial effects:

- when soil chemistry limits nutrient solubility and availability (pH, organic matter, type and percentage of clay);

- when nutrient absorption through the roots is limited as a result of conditions that hamper root growth (temperature, moisture, oxygen and loss of soil structure);

- when the plant’s local internal demand may surpass real internal nutrient redistribution capacity, leaving the demand unsatisfied;



- when nutrient mobility is limited, such as when plants flower before the leaf growth phase, imposing limiting factors on xylem nutrient transport;

- to achieve rapid recovery from leaf stress caused by climatic conditions, soil conditions and irrigation management.

SQM has consolidated a product portfolio of over 200 specialty fertilizer blends, including top brands such as Ultrasol®, for fertigation; Qrop®, for application to the soil; Speedfol®, for foliar feeding and Allganic® for organic crops. In recent years, we have added several products to our portfolio such as QropTMKS in 2015 and Ultrasol®ution K in 2018. These products were developed by our research and development team. Qrop is more physically stable than other products in that it is not required to be transported as hazardous cargo, which means it can be sold in other markets. We have restructured the Qrop products portfolio to include chloride-free line for direct application to the soil with a variety of specialized formulas and unique mixtures, which make these products highly accurate and quickly available for the plant. Ultrasol®ution K addresses the need for potassium-free chloride and a nitrate safe for handling in the liquid fertilizer market, opening new opportunities for SQM in the cultivation of almonds and strawberries, in which water quality and efficiency are very important.

## Specialty Plant Nutrition: Marketing and Customers

In 2019, we sold our specialty plant nutrients in approximately 96 countries and to more than 1,100 customers. No customer represented more than 10% of our specialty plant nutrition revenues during 2019, and our ten largest customers accounted in the aggregate for approximately 32% of revenues during that period. No supplier accounted for more than 10% of the costs of sales for this business line.

The table below shows the geographical breakdown of our revenues:

<table><tr><td>Revenues breakdown</td><td>2019</td><td>2018</td><td>2017</td></tr><tr><td>North America</td><td>34%</td><td>31%</td><td>34%</td></tr><tr><td>Europe</td><td>21%</td><td>26%</td><td>26%</td></tr><tr><td>Chile</td><td>15%</td><td>14%</td><td>13%</td></tr><tr><td>Central and South America</td><td>11%</td><td>10%</td><td>10%</td></tr><tr><td>Asia and Others</td><td>20%</td><td>19%</td><td>17%</td></tr></table>

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

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

As part of our marketing strategy, we provide technical and agronomical assistance and support to our clients. We have specific knowledge resulting from extensive research and numerous studies conducted by our agronomical teams in close contact with producers throughout the world. The solid agronomical knowledge is key for the development of specific formulas and hydroponic and fertirrigation nutritional plans, which allows us to provide expert advice for producing crops that meet high quality standards for the most efficient markets and in the most environmentally challenging conditions.

By working closely with our customers, we are able to identify their needs for new products and a possible existence of higher-value-added markets. Our specialty plant nutrients are used on a wide variety of crops, particularly value-added crops, where the use of our products enables our customers to increase yields and achieve a premium price for their own products.



Our customers are located in both the northern and southern hemispheres. Consequently, we do not believe there are any seasonal or cyclical factors that can materially affect the sales of our specialty plant nutrients.

## Specialty Plant Nutrition: Joint Ventures and Agreements

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

We have entered into joint ventures with a number of partners for specialty plant nutrition production in China, India, Peru, Brazil, Dubai, South Africa and the Netherlands. Recent joint ventures include the following:

- In 2017, three new offices started their operations in Imbituba, Rio Grande and Sao Paulo, Brazil, SQM Vitas Brazil Agroindustria, Importação e Exporação Ltda.

- In May 2018, our web page operating a new joint venture, Pavoni & C. Spa, with Pavoni, one of the largest specialty fertilizer companies in Italy. The main objective of this business is to improve the nutritional efficiency of crops, the existing fertigation, the quality of fertilizers and their applications, as well as extend the use of fertigation (from micro-irrigation).

- In 2018, our new office and storage facility in Pamira, managed by SQM Colombia SAS near the Port of Buenaventura in Colombia became operational. The new office was set up to meet the growing needs of customers in the Colombian market, especially those who grow roses and ornamental plants, coffee, bananas and fruit through a complete portfolio of soluble fertilizers and Qrop mixes.

## Specialty Plant Nutrition: Fertilizer Sales in Chile

We market specialty plant nutrients in Chile through our subsidiary Soquimich Comercial S.A. (“SQMC”).

SQMC is one of the main players in the Chilean market, offering a wide range of products developed specifically for the crops grown in the country which require specialty plant nutrients.

SQMC sells local products as well as products imported from different countries around the world.

All contracts and agreements between SQMC and its foreign suppliers of fertilizers contain standard and customary commercial terms and conditions. SQMC has been able to obtain adequate supplies of these products with good pricing conditions.

SQMC’s total sales reached US$128 million and US$147 million in 2019 and 2018, respectively. During 2019, no client represented more than 10% of the sales of the Company. The market participation of SQMC in the fertilizer market during 2019 was approximately 20%.

## Specialty Plant Nutrition: Competition

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

We believe that we are the world’s largest producer of sodium nitrate and potassium nitrate for agricultural use. Our sodium nitrate products compete indirectly with specialty and commodity-type substitutes, which



may be used by some customers instead of sodium nitrate depending on the type of soil and crop to which the product will be applied. Such substitute products include calcium nitrate, ammonium nitrate and calcium ammonium nitrate.

In the potassium nitrate market our largest competitor is Haifa Chemicals Ltd. (“Haifa”), in Israel, which is a subsidiary of Trans Resources International Inc. We estimate that sales of potassium nitrate by Haifa accounted for approximately 16% of total world sales during 2019 (excluding sales by Chinese producers to the domestic Chinese market). Our sales accounted for approximately 51% of global potassium nitrate sales by volume for the period.

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

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

## Iodine and its Derivatives

We believe that we are the world’s largest producer of iodine. In 2019, our revenues from iodine and iodine derivatives amounted to US$371.0 million, representing 19.1% of our total revenues in that year. We estimate that our sales accounted for approximately 34% of global iodine sales by volume in 2019.

## Iodine: Market

Iodine and iodine derivatives are used in a wide range of medical, agricultural and industrial applications as well as in human and animal nutrition products. Iodine and iodine derivatives are used as raw materials or catalysts in the formulation of products such as X-ray contrast media, biocides, antiseptics and disinfectants, pharmaceutical intermediates, polarizing films for LCD and LED screens, chemicals, organic compounds and pigments. Iodine is also added in the form of potassium iodate or potassium iodide to edible salt to prevent iodine deficiency disorders.

X-ray contrast media is the leading application of iodine, accounting for approximately 24% of demand. Iodine’s high atomic number and density make it ideally suited for this application, as its presence in the body can help to increase contrast between tissues, organs, and blood vessels with similar X-ray densities. Other applications include pharmaceuticals, which we believe account for 13% of demand; LCD and LED screens, 12%; iodophors and povidone-iodine, 8%; animal nutrition, 7%; fluoride derivatives, 7%; biocides, 6%; nylon, 4%; human nutrition, 3% and other applications, 16%.

During 2019, iodine demand grew at a similar rate as in 2018, reaching 36,700 metric tons. While traditional uses grew at the same rate as during the previous year, some applications, such as nylon fabrication and mercury remediation decreased slightly more than the increase of iodine and derivatives demand related to the LED and LCD market.

## Iodine: Our Products



We produce iodine in our Nueva Victoria plant, near Iquique, and our Pedro de Valdivia plant, close to María Elena. We have a total effective production capacity of approximately 14,000 metric tons per year of iodine, including the Iris plant, which is located close to the Nueva Victoria plant.

Through ASG, we produce organic and inorganic iodine derivatives. ASG was established in the mid-1990s and has production plants in the United States, Chile and France. ASG is the world’s leading inorganic and organic iodine derivatives producer.

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

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

The following table shows our total sales volumes and revenues from iodine and iodine derivatives for 2019, 2018 and 2017:

<table><tr><td></td><td>2019</td><td>2018</td><td>2017</td></tr><tr><td>Sales volumes (Th. MT)</td><td></td><td></td><td></td></tr><tr><td>Iodine and derivatives</td><td>12.7</td><td>13.3</td><td>12.7</td></tr><tr><td>Revenues (in US$ millions)</td><td>371.0</td><td>325.0</td><td>252.1</td></tr></table>

Our revenues increased to US$371.0 million in 2019 from US$325.0 million in 2018. This increase was primarily attributable to higher prices during 2019. Average iodine prices were more than 19.4% higher in 2019 than in 2018. Our sales volumes decreased 4.4% in 2019.

## Iodine: Marketing and Customers

In 2019, we sold our iodine products in approximately 48 countries to approximately 279 customers, and most of our sales were exports. Two customers each accounted for more than 10% of our iodine revenues in 2019. These two customers accounted for approximately 31% of revenues, and our ten largest customers accounted in the aggregate for approximately 75% of revenues. No supplier accounted for more than 10% of the cost of sales of this business line

The following table shows the geographical breakdown of our revenues:

<table><tr><td>Revenues breakdown</td><td>2019</td><td>2018</td><td>2017</td></tr><tr><td>North America</td><td>24%</td><td>26%</td><td>27%</td></tr><tr><td>Europe</td><td>33%</td><td>34%</td><td>32%</td></tr><tr><td>Chile</td><td>0%</td><td>0%</td><td>0%</td></tr><tr><td>Central and South America</td><td>2%</td><td>2%</td><td>2%</td></tr><tr><td>Asia and Others</td><td>40%</td><td>37%</td><td>38%</td></tr></table>

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



## Iodine: Competition

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

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

Five Chilean companies accounted for approximately 59% of total global sales of iodine in 2019, including SQM, with approximately 34%, and four other producers, accounting for the remaining 25%. The other Chilean producers are: Atacama Chemical S.A. (Cosayach), controlled by the Chilean holding company Inverraz S.A.; ACF Minera S.A., owned by the Chilean family Urruticoechea; Algorta Norte S.A., a joint venture between ACF Minera S.A. and Toyota Tsusho; and Atacama Minerals, recently acquired by the Chinese company Tewoo.

We estimate that eight Japanese iodine producers accounted for approximately 27% of global iodine sales in 2019, including recycled iodine.

We estimate that iodine producers in the United States (one of which is owned by Toyota Tsusho and another by Ise Chemicals Ltd., both of which are Japanese companies) accounted for nearly 5% of world iodine sales in 2019.

Iodine recycling is a growing trend worldwide. Several producers have recycling facilities where they recover iodine and iodine derivatives from iodine waste streams.

We estimate the 17% of the iodine supply comes from iodine recycling. Through ASG or alone, we are also actively participating in the iodine recycling business using iodinated side-streams from a variety of chemical processes in Europe and the United States.

The prices of iodine and iodine derivative products are determined by market conditions. World iodine prices vary depending upon, among other things, the relationship between supply and demand at any given time. Iodine supply varies primarily as a result of the production levels of the iodine producers (including us) and their respective business strategies. Our annual average iodine sales prices increased to approximately US29 per kilogram in 2019, from the average sales prices of approximately US24 per kilogram observed in 2018.

Demand for iodine varies depending upon overall levels of economic activity and the level of demand in the medical, pharmaceutical, industrial and other sectors that are the main users of iodine and iodine-derivative products. Certain substitutes for iodine are available for certain applications, such as antiseptics and disinfectants, which could represent a cost-effective alternative to iodine depending on prevailing prices.

The main factors of competition in the sale of iodine and iodine derivative products are reliability, price, quality, customer service and the price and availability of substitutes. We believe we have competitive advantages compared to other producers due to the size and quality of our mining reserves and the available production capacity. We believe our iodine is competitive with that produced by other manufacturers in certain advanced industrial processes. We also believe we benefit competitively from the long-term relationships we have established with our largest customers.



## Lithium and its Derivatives

In 2019, our revenues from lithium sales amounted to US$505.7 million, representing 26.0% of our total revenues. We believe we are one of the world’s largest producers of lithium carbonate and lithium hydroxide, and we estimate that our sales volumes accounted for approximately 15% of the global lithium chemicals sales volumes.

## Lithium: Market

The lithium market can be divided into (i) lithium minerals for direct use (in which market SQM does not participate directly), (ii) basic lithium chemicals, which include lithium carbonate and lithium hydroxide (as well as lithium chloride, from which lithium carbonate may be made), and (iii) inorganic and organic lithium derivatives, which include numerous compounds produced from basic lithium chemicals (in which market SQM does not participate directly).

Lithium carbonate and lithium hydroxide are principally used to produce the cathodes for rechargeable batteries, taking advantage of lithium’s extreme electrochemical potential and low density. Batteries are the leading application for lithium, accounting for approximately 69% of total lithium demand, including batteries for electric vehicles, which accounted for approximately 46% of total lithium demand.

There are many other applications both for basic lithium chemicals and lithium derivatives, such as lubricating greases (approximately 6% of total lithium demand), heat-resistant glass (ceramic glass) (approximately 5% of total lithium demand), chips for the ceramics and glaze industry (approximately 3% of total lithium demand), chemicals for air conditioning (approximately 2% of total lithium demand), and many others, including air treatment systems, pharmaceutical synthesis and metal alloys.

Lithium’s main properties, which facilitate its use in this range of applications, are that it:

- is the lightest solid metal and element at room temperature;

• is low density;

• has a low coefficient of thermal expansion;

• has high electrochemical potential; and

• has a high specific heat capacity.

During 2019, lithium chemicals demand increased by approximately 14%, reaching approximately 307,000 metric tons. We expect applications related to energy storage to continue driving demand in the coming years.

## Lithium: Our Products

We produce lithium carbonate at our Salar del Carmen facilities, near Antofagasta, Chile, from highly concentrated lithium chloride produced in the Salar de Atacama as a by-product of the potassium chloride production. The annual production capacity of our lithium carbonate plant at the Salar del Carmen was expanded and is now 70,000 metric tons per year. We are in the process of increasing our production capacity to 120,000 metric tons per year. We believe that the technologies we use, together with the high concentrations of lithium and the characteristics of the Salar de Atacama, such as high evaporation rate and concentration of other minerals, allow us to be one of the lowest cost producers worldwide.

We also produce lithium hydroxide at the same plant at the Salar del Carmen, next to the lithium carbonate operation. The lithium hydroxide facility has a production capacity of 13,500 metric tons per year.

The following table shows our total sales volumes and revenues from lithium and its derivatives for 2019, 2018 and 2017:



<table><tr><td></td><td>2019</td><td>2018</td><td>2017</td></tr><tr><td>Sales volumes (Th. MT)</td><td></td><td></td><td></td></tr><tr><td>Lithium and derivatives</td><td>45.1</td><td>45.1</td><td>49.7</td></tr><tr><td>Revenues (in US$ millions)</td><td>505.7</td><td>734.8</td><td>644.6</td></tr></table>

Our revenues in 2019 were US$505.7 million, a 31.2% decrease from US$734.8 million in 2018, due to lower prices during the year. The average price for 2019 was approximately 31.2% lower than the average price in 2018.

## Lithium: Marketing and Customers

In 2019, we sold our lithium products in approximately 45 countries to approximately 185 customers, and most of our sales were to customers outside of Chile. Two customers each accounted for more than 10% of our lithium revenues in 2019, accounting for approximately 34% of our lithium revenues. Our ten largest customers accounted in the aggregate for approximately 69% of revenues. No supplier accounted for more than 10% of the cost of sales of this business line. We make lease payments to Corfo which are associated with the sale of different products produced in the Salar de Atacama, including lithium carbonate, lithium hydroxide and potassium chloride. See Note 26.2 to our consolidated financial statements for the disclosure of lease payments made to Corfo for all periods presented.

The following table shows the geographical breakdown of our sales for 2019, 2018 and 2017:

<table><tr><td>Revenues breakdown</td><td>2019</td><td>2018</td><td>2017</td></tr><tr><td>North America</td><td>9%</td><td>9%</td><td>7%</td></tr><tr><td>Europe</td><td>15%</td><td>14%</td><td>14%</td></tr><tr><td>Chile</td><td>0%</td><td>0%</td><td>0%</td></tr><tr><td>Central and South America</td><td>1%</td><td>0%</td><td>0%</td></tr><tr><td>Asia and Others</td><td>75%</td><td>76%</td><td>79%</td></tr></table>

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

## Lithium: Competition

Lithium is produced mainly from two sources: (i) concentrated brines and (ii) minerals. During 2019, the main lithium brines producers were Chile, Argentina and China, while the main lithium mineral producers were Australia and China. With total sales of approximately 45,100 metric tons of lithium carbonate equivalent (LCE), SQM’s market share of lithium chemicals was approximately 15% in 2019. One of our main competitors is Albemarle Corporation (“Albemarle”), which produces lithium carbonate and lithium chloride in Chile and the United States, along with lithium derivatives in the United States, Germany, Taiwan and China, with a market share of approximately 25%. Albemarle also owns 49% of Talison Lithium Pty Ltd. (“Talison”), an Australian company, that is the largest producer of concentrated lithium minerals in the world, based in Western Australia. The remaining 51% of Talison is owned by Tianqi Lithium Corp. (“Tianqi”), a Chinese company producing basic lithium chemicals in China from concentrated lithium minerals. Talison sells a part of its concentrated lithium mineral production to the direct use market, but most of its production, representing approximately 23% of total lithium chemical demand, is converted into basic lithium chemicals in China by Tianqi and Albemarle. Currently, Tianqi is



starting up its lithium hydroxide plant in Australia while Albemarle has one under construction. Tianqi is also a significant shareholder of ours, holding approximately 25.86% of our shares.

Another important competitor is Livent Corporation (“Livent”), with an estimated market share of approximately 7%. Livent has production facilities in Argentina through Minera del Altiplano S.A., where it produces lithium chloride and lithium carbonate. In addition, Livent produces lithium derivatives in the United States, the United Kingdom and China. Orocobre Ltd., based in Argentina, produces lithium carbonate with a market share of approximately 4%.

Australia is an important source of concentrated lithium minerals. Since 2018, two producers have doubled their production of concentrated mineral, which is then converted into lithium chemicals in China. One of these producers is a joint venture between Ganfeng Lithium Co. (“Ganfeng”) and Mineral Resources Ltd in the Mt. Marion project. Galaxy Resources Ltd. is another important producer with operations in Mt. Cattlin. Additionally, three new players began shipping concentrated lithium minerals in 2018, Pilbara Minerals and Altura Mining, both producing from the Pilgangoora deposit, and Alita Resources Limited, producing from the Bald Hill deposit. In addition, there were at least ten other companies producing lithium in China from brines or minerals in 2019.

We believe that lithium production will continue to increase in the near future, in response to an increase in demand growth. A number of new projects to develop lithium deposits has been announced recently. Some of these projects are already in the advanced stages of development and others could materialize in the medium term.

## Potassium

In 2019, our potassium chloride and potassium sulfate revenues amounted to US$212.2 million, representing 10.9% of our total revenues and a 20.7% decrease compared to 2018, as a result of reduced sales volumes. We estimate that we accounted for less than 1% of global sales of potassium chloride in 2019.

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

Potassium is one of the three macronutrients that a plant needs to develop. Although potassium does not form part of a plant’s structure, it is essential to the development of its basic functions. Potassium chloride is the most commonly used potassium-based fertilizer. It is used to fertilize crops that can tolerate relatively high levels of chloride, and to fertilize crops that are grown under conditions with sufficient rainfall or irrigation practices that prevent chloride from accumulating to excess levels in the rooting systems of the plant.

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

• increased yield and quality;

• increased production of proteins;

• increased photosynthesis;

• intensified transport and storage of assimilates;

• prolonged and more intense assimilation period;

• improved water efficiency;

• regulated opening and closure of stomata; and

• synthesis of lycopene.

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



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

## Potassium: Market

During the last decade, growth in demand for potassium chloride, and for fertilizers in general, has been driven by several key factors, such as a growing world population, higher demand for protein-based diets and less arable land. All of these factors contribute to fertilizer demand growth as a result of efforts to maximize crop yields and use resources more efficiently. For the last ten years, the compound annual growth for the global potassium chloride market was approximately 1-2%. We estimate that demand fell 2 million metric tons in 2019, reaching 64 million metric tons.

According to studies prepared by the International Fertilizer Industry Association, cereals account for approximately 45% of world potassium consumption, including corn (14%), rice (13%) and wheat (3%). Oilseeds, predominantly soybeans and palm oil, represent approximately 16% of total potassium demand. Fruits and vegetables account for approximately 22% of world potassium demand, and sugar crops account for close to 7%.

## Potassium: Our Products

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

The following table shows our sales volumes of and revenues from potassium chloride and potassium sulfate for 2019, 2018 and 2017:

<table><tr><td></td><td>2019</td><td>2018</td><td>2017</td></tr><tr><td>Sales volumes (Th. MT)</td><td></td><td></td><td></td></tr><tr><td>Potassium chloride and potassium sulfate</td><td>597.3</td><td>831.8</td><td>1,344.3</td></tr><tr><td>Revenues (in US$ millions)</td><td>212.2</td><td>267.5</td><td>379.3</td></tr></table>

Our revenues in 2019 were US$212.2 million, a 20.7% decrease from US$267.5 million in 2018, due to significantly lower sales volumes during the year. Our sales volumes in 2019 were approximately 28.2% lower than sales volumes reported last year.

## Potassium: Marketing and Customers

In 2019, we sold potassium chloride and potassium sulfate to approximately 514 customers in approximately 38 countries. One individual customer accounted for more than 10% of our revenues of potassium chloride and potassium sulfate in 2019, which totals approximately 12% of our total revenues. We estimate that our ten largest customers accounted in the aggregate for approximately 44% of such revenues. One supplier accounted for more than 10% of the cost of sales of this business line, accounting for approximately 13% of the cost of sales for the business line. We make lease payments to Corfo which are associated with the sale of different products produced in the Salar de Atacama, including lithium carbonate, lithium hydroxide and potassium chloride. See Note 26.2 to our consolidated financial statements for the disclosure of lease payments made to Corfo for all periods presented.

The following table shows the geographical breakdown of our sales for 2019, 2018 and 2017:



<table><tr><td>Revenues breakdown</td><td>2019</td><td>2018</td><td>2017</td></tr><tr><td>North America</td><td>20%</td><td>19%</td><td>18%</td></tr><tr><td>Europe</td><td>13%</td><td>17%</td><td>19%</td></tr><tr><td>Chile</td><td>13%</td><td>10%</td><td>5%</td></tr><tr><td>Central and South America</td><td>31%</td><td>30%</td><td>38%</td></tr><tr><td>Asia and Others</td><td>23%</td><td>24%</td><td>20%</td></tr></table>

## Potassium: Competition

We estimate that we accounted for less than 1% of global sales of potassium chloride in 2019. Our main competitors are Nutrien, Uralkali, Belaruskali and Mosaic. We estimate that in 2019, Belaruskali accounted for approximately 20% of global sales, Nutrien accounted for approximately 18% of global sales, Uralkali accounted for approximately 16% of global sales, and Mosaic accounted for approximately 13% of global sales.

In the potassium sulfate market, we have several competitors, of which the most important are K+S KALI GmbH (Germany), Tessenderlo Chemie (Belgium) and Great Salt Lake Minerals Corp. (United States). We estimate that these three producers account for approximately 30% of its worldwide production of potassium sulfate. In 2019, SQM reinstated its own production of potassium sulfate.

## Industrial Chemicals

In 2019, our revenues from industrial chemicals were US$94.9 million, representing approximately 4.9% of our total revenues for that year. We estimate that our market share in the industrial potassium nitrate market was approximately 30% for 2019.

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

In addition to producing industrial nitrates, we produce, market and sell industrial-grade potassium chloride.

## Industrial Chemicals: Market

Industrial sodium and potassium nitrates are used in a wide range of industrial applications, including the production of glass, ceramics, explosives, metal recycling, insulation materials, and metal treatments together with various chemical processes.

In addition, this product line has also experienced growth from the use of industrial nitrates as thermal storage in concentrated solar power plants (commonly known as “CSP”). Solar salts for this specific application contain a blend of 60% sodium nitrate and 40% potassium nitrate by weight ratio and are used as a storage and heat transfer medium. Unlike traditional photovoltaic plants, these new plants use a “thermal battery” that contains molten sodium nitrate and potassium nitrate, which store the heat collected during the day. The salts are heated up during the day, while the plants are operating under direct sunlight, and at night they release the solar energy that they have captured, allowing the plants to operate even during hours of darkness. Depending on the power plant technology, solar salts are also used as a heat transfer fluid in the plant system and thereby make CSP plants even more efficient, increasing their output and reducing the Levelized Cost of Electricity (LCOE).



We see a growing trend for the CSP application as a result of its economical long duration electricity storage. The thermal storage of CSP plants helps to improve the stabilization of the electricity grid. Like all large power generation plants, such large CSP power plants are capital intensive and require a relatively long development period.

We supply solar salts to CSP projects around the world. In 2019, we supplied our solar salts to the first CSP projects in Chile and Italy totaling over 48,000 metric tons. We have also secured a contract for the supply of a major installation in the Middle East in the next 3 years.

We are also experiencing a growing interest in using solar salts in thermal storage solutions not related to CSP technology. Due to their proven performance, solar salts are being tested in industrial heat processes and heat waste solutions. These new applications may open new opportunities for solar salts uses in the near future.

## Industrial Chemicals: Our Products

The following table shows our sales volumes of industrial chemicals and total revenues for 2019, 2018 and 2017:

<table><tr><td></td><td>2019</td><td>2018</td><td>2017</td></tr><tr><td>Sales volumes (Th. MT)</td><td></td><td></td><td></td></tr><tr><td>Industrial chemicals</td><td>123.5</td><td>135.9</td><td>167.6</td></tr><tr><td>Revenues (in US$ millions)</td><td>94.9</td><td>108.3</td><td>135.6</td></tr></table>

Revenues for industrial chemicals decreased from US$94.9 million in 2019 to US$108.3 million in 2018, as a result of lower sales volumes in this business line. Sales volumes in 2019 decreased 9.1% compared to sales volumes reported last year.

## Industrial Chemicals: Marketing and Customers

We sold our industrial nitrate products in approximately 52 countries in 2019 to approximately 277 customers. One customer accounted for more than 10% of our revenues of industrial chemicals in 2019, accounting for approximately 37%, and our ten largest customers accounted in the aggregate for approximately 59% of such revenues. No supplier accounted for more than 10% of the cost of sales of this business line. We make lease payments to Corfo which are associated with the sale of different products produced in the Salar de Atacama, including lithium carbonate, lithium hydroxide and potassium chloride. See Note 26.2 to our consolidated financial statements for the disclosure of lease payments made to Corfo for all periods presented.

The following table shows the geographical breakdown of our sales for 2019, 2018 and 2017:

<table><tr><td>Revenues breakdown</td><td>2019</td><td>2018</td><td>2017</td></tr><tr><td>North America</td><td>29%</td><td>25%</td><td>19%</td></tr><tr><td>Europe</td><td>16%</td><td>16%</td><td>21%</td></tr><tr><td>Chile</td><td>42%</td><td>4%</td><td>2%</td></tr><tr><td>Central and South America</td><td>7%</td><td>11%</td><td>7%</td></tr><tr><td>Asia and Others</td><td>6%</td><td>43%</td><td>51%</td></tr></table>

We sell our industrial chemical products mainly through our own worldwide network of representative offices and through our sales and distribution affiliates. We maintain inventories of our different grades of sodium nitrate and potassium nitrate products at our facilities in Europe, North America, Mexico, South Africa, Asia and South America to achieve prompt deliveries to customers. We provide support to our customers and continuously work with them to develop new products and/or applications for our products.



## Industrial Chemicals: Competition

We believe we are one of the leading producers of sodium nitrate and potassium nitrate for industrial uses. In the case of industrial sodium nitrate, we estimate that our sales represented close to 32% of world demand in 2019 (excluding domestic demand for China and India, for which we believe reliable estimates are not available). Our competitors are mainly based in Europe and Asia, producing sodium nitrate as a by-product of other production processes. In refined grade sodium nitrate, BASF AG, a German corporation, and several producers in China and Eastern Europe are highly competitive. Our industrial sodium nitrate products also compete indirectly with substitute chemicals, including sodium carbonate, sodium sulfate, calcium nitrate and ammonium nitrate, which may be used in certain applications instead of sodium nitrate and are available from a large number of producers worldwide.

Our main competitor in the industrial potassium nitrate business is Haifa Chemicals, which we estimate had a market share of 16% for 2019. We estimate that our market share was approximately 30% for 2019.

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

In the industrial potassium chloride market, we are a relatively small producer, mainly supplying regional needs.

In the solar salts business, we believe we have been the market leader since we started selling to commercial projects in 2007. Currently, our competitors in the potassium nitrate business are principally Chinese companies. In the sodium nitrate business, BASF is the main competitor.

## Other Products

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

## Trend Information

Our revenues decreased 14.2% to US$1,943.7 million in 2019 from US$2,265.8 million in 2018. Gross profit decreased 28.2% to US$560.1 million in 2019, which represented 28.8% of revenues, from US$780.2 million in 2018, which represented 34.4% of revenues. Profit attributable to controlling interests decreased 36.8% to US$278.1 million in 2019 from US$439.8 million in 2018.

Revenues from lithium and derivatives totaled US$505.7 million during 2019, a decrease of 31.2% compared to the US$734.8 million in 2018. We reported the same sales volumes in the lithium business line in 2019 compared to 2018 as a result of lower than expected lithium demand growth during 2019. According to our estimates, the lithium market demand growth was approximately 14% in 2019, a significant market growth, but lower than originally expected given some delays we saw in the penetration of electric vehicles in some key markets. We believe that the fundamentals behind demand growth in the lithium industry are stronger than ever, different automakers around the world are fully committed to the electrification of their fleet. At the same time, technological advancements are resulting in more competitive alternatives for customers, and doubts that once existed over lithium battery technology are dissipating. Average prices in this business line were 31.2% lower in 2019 when compared to average prices seen during 2018. New supply entered the market, which, which coupled with the lower than expected demand impacted market prices in 2019. We believe the oversupply seen in 2019 may continue



in 2020 and could further impact average prices in 2020 when compared to 2019. We believe our sales volumes in 2020 could be higher than sales volumes seen in 2019, reaching 55,000-60,000 metric tons. Demand growth in 2019 and continuing into 2020 was led by demand related to batteries for electric vehicles. Demand in 2020 is expected to be about 15% greater than total demand in 2019; we believe the European electric vehicle market will gain momentum and contribute significantly to this lithium demand growth.

Revenues from the specialty plant nutrition business line business line in 2019 totaled US$723.9 million, a decrease of 7.4% compared to $781.8 million reported in 2018. Our sales volumes and average prices in the specialty plant nutrition business line decreased 3.8% in 2019 compared to 2018. In the potassium nitrate market, demand growth was weaker than expected in 2019, with demand flat compared to 2018 as a result of weather conditions in various geographical markets. Our average prices fell as a result of this lower demand, about 3% less in 2019 than average prices reported in 2018. We expect to see strong demand in the North America, specifically the United States and Mexico. We believe that water soluble potassium nitrate demand could see growth rates of approximately 6%. This demand recovery could also have a positive impact on prices this year.

Revenues from sales of iodine and derivatives during 2019 were US$371.0 million, an increase of 14.2% compared to US$325.0 million generated in 2018. Our sales volumes in the iodine business line decreased 4.4% in 2019, but we saw prices increase during 2019, reaching average prices of over US$29/kg, exceeding our original expectations. Average prices in 2019 were 19.4% higher than the average prices seen in 2018. We believe that this positive price momentum should continue during 2020, increasing margins per ton significantly in this business line. This should offset the slightly lower sales volumes that we expect during 2020. According to our estimates, the global iodine demand grew slightly in 2019 reaching almost 36,700 MT and our market share was approximately 34%.

Potassium chloride and potassium sulfate revenues for 2019 totaled US$212.2 million, a 20.7% decrease compared to the US$267.5 million reported in 2018. Revenues in this business line during 2019 were impacted by lower sales volumes when compared to 2018, which were not offset by higher average prices in the business line. Sales volumes for potassium chloride and potassium sulfate reached 597,000 metric tons, which is significantly higher than our original annual sales estimate of 500,000 metric tons. These lower sales volumes were a result of production limitations as we focused on increasing our lithium production in the Salar de Atacama. In addition, as a result of the environmental compliance plan that was approved by the Chilean Environmental Authority (Superintendencia del Medio Ambiente) in January 2019, we were temporarily extracting less brine than we have in the past. We believe that sales volumes in 2020 could increase another 20-25% when compared to 2019, but the lower price dynamics that we have seen during the first two months of this year could continue. In 2019, we believe that the potassium chloride market reached approximately 64 million metric tons and could grow an additional 2 million metric tons in 2020.

Industrial chemicals revenues in 2019 reached US$94.9 million, a 12.4% decrease compared to US$108.3 million in 2018. Our sales volumes in the industrial chemicals product line decreased 9.1% in 2019 compared to 2018, as a result of lower sales volumes of industrial nitrates. Our solar salt sales volumes were up 1.8% in 2019 when compared to 2018. We expect industrial chemical sales volumes in 2020 will increase about 80% when compared to 2019, as we begin delivery of 150,000 metric tons of solar salts this year in 2020 for a project requiring over 400,000 metric tons.

## Production Process

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

• caliche ore deposits, which contain nitrates, iodine and potassium; and



- brines from the Salar de Atacama, which contain potassium, lithium, sulfate, boron and magnesium.

## Caliche Ore Deposits

Caliche ore deposits are located in the First and Second Regions in northern Chile. During 2019, our mining operations concentrated in the First Region where we mainly worked in the mining sector Tente en el Aire and in the mining sectors Nueva Victoria Oeste, Norte and Sur. The Second Region mining operations at the Pampa Blanca site, the El Toco mine (which is part of the María Elena site) and the Pedro de Valdivia site were suspended in March 2010, November 2013 and November 2015, respectively, in an effort to optimize our production facilities with lower production costs.

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

Before proper mining begins, the exploration stage is carried out, including complete geological reconnaissance, sampling and drilling caliche ore to determine the quality and characteristics of each deposit. Drill-hole samples are properly identified and tested at our chemical laboratories. With the exploration information on a closed grid pattern of drill holes, the ore evaluation stage provides information for mine planning purposes. Mine planning is done on a long-term basis (ten years), medium-term basis (three to five years) and short-term basis (one year). Once all of this information has been compiled, detailed planning for the exploitation of the mine takes place.

The mining process generally begins with bulldozers first removing the overburden in the mining area. This process is followed by an inspection and review of the drill holes before production drilling and blasting occurs to break the caliche seams. Front-end loaders and bulldozers load the ore onto off-road trucks, which take it to the leaching heaps to be processed.

During 2019, SQM continued working with mining equipment to replace the drilling and blasting process for mining some of the caliche ore and obtaining a smaller ore size (under 6  \( \frac{1}{2} \)  inches) that allows a better metallurgical recovery.

The run of mine ore is loaded in heaps and leached with water to produce concentrated solutions containing iodine, nitrate and potassium. These solutions are then sent to plants where iodine is extracted through both solvent-extraction and blow out processes. The remaining solutions are subsequently sent to solar evaporation ponds where the solutions are evaporated and salts rich in nitrate and potassium are produced. These concentrated salts are then sent to Coya Sur where they are used to produce potassium nitrate.

During 2019, the Pedro de Valdivia site generated solutions produced by leaching the mine tailings. These solutions are treated at the iodide plant at Pedro de Valdivia. After iodide is obtained, the remaining solutions, which are rich in nitrate and potassium, are sent to the solar evaporation ponds at Coya Sur in order to be used in the production of potassium nitrate.

## Caliche Ore-Derived Products

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

## Sodium Nitrate

During 2019, sodium nitrate for both agricultural and industrial applications was produced by inventory generated at the Pedro de Valdivia facility and subsequently processed at the Coya Sur plants. The production at the Pedro de Valdivia facility, until November 2015, generated approximately 700,000 tons



of inventory. We used the remaining sodium nitrate inventory during 2019 to produce finished nitrates. For subsequent production of sodium nitrate, we will use nitrate salts produced at our Nueva Victoria facility, which was completed in December 2019.

Crystallized sodium nitrate is an intermediate product that is subsequently processed further at the Coya Sur production plants to produce sodium nitrate, potassium nitrate and sodium potassium nitrate in different chemical and physical forms, including crystallized and prilled products. Finally, the products are transported by truck to our port facilities in Tocopilla for shipping to customers and distributors worldwide.

## Potassium Nitrate

Potassium nitrate is produced at our Coya Sur facility using a production process developed in-house. The brines generated by the leaching process at Pedro de Valdivia are pumped to Coya Sur's solar evaporation ponds for a nitrate concentration process. After the nitrate concentration process, the brine is pumped to a conversion plant where potassium salts from the Salar de Atacama and nitrate and potassium salts produced at Nueva Victoria or Coya Sur are added. A chemical reaction begins, transforming sodium nitrate into potassium nitrate and discarding formed sodium chloride. This brine is pumped to a crystallization plant, which crystallizes the potassium nitrate by cooling it at atmospheric pressure, and separating it from the liquid by centrifuge.

Our current potassium nitrate production capacity at Coya Sur is approximately 1,300,000 metric tons per year. During 2019, new operational improvements have been achieved by significantly integrating the production process of the Coya Sur facilities, allowing new increases in production capacity without major investments and improving the use of raw materials from the Salar de Atacama and Nueva Victoria.

The potassium nitrate produced at Coya Sur is transported to Tocopilla for shipping and delivery to customers and distributors. All potassium nitrate produced in crystallized or prilled form at Coya Sur has been certified by TÜV-Rheiland under the quality standard ISO 9001:2008.

## Sodium Potassium Nitrate

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

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

The sodium potassium nitrate produced at Coya Sur is transported to Tocopilla for shipping and delivery to customers and distributors.

## Iodine and Iodine Derivatives

During 2019, we produced iodine at our facilities at Nueva Victoria (including the Iris facility) and Pedro de Valdivia. Iodine is extracted from solutions produced by leaching caliche ore.



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

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

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

Our total iodine production in 2019 was 12,082 metric tons: 9,558 metric tons from Nueva Victoria, 1,174 metric tons from Iris, and 1,351 metric tons from Pedro de Valdivia. Nueva Victoria is also equipped to toll iodine from iodide delivered from our other facilities. We have the flexibility to adjust our production according to market conditions. Following the production facility restructuring at Pedro de Valdivia and Nueva Victoria, along with the ramp-up of our new iodide plant in Nueva Victoria, our total current effective production capacity at our iodine production plants is approximately 14,800 metric tons per year.

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

In September 2010, CONAMA, the Chilean Environmental Evaluation Service, approved the environmental study of our Pampa Hermosa project in the Tarapacá Region of Chile. This environmental permit allows for an increase in the production capacity of our Nueva Victoria operations to 11,000 metric tons of iodine per year and to produce up to 1.2 million metric tons of crystallized nitrates, mine up to 37 million metric tons of caliche per year and use new water rights of up to 665.7 liters per second. In Iris, we are approved for 2,000 metric tons of iodine production per year, with an annual extraction of caliche ore up to 6.48 million metric tons per year. In recent years, we have made investments in order to increase the water capacity in the Nueva Victoria operations from two water sources approved by the environmental study of Pampa Hermosa, expand the capacity of solar evaporation ponds, and implement new areas of mining and collection of solutions. Our current production capacity at Nueva Victoria is approximately 13,000 metric tons per year of iodine (including the Iris operations) and 1,000,000 metric tons per year of nitrates. Additional expansions may be implemented from time to time in the future, depending on market conditions.

## Salar de Atacama Brine Deposits

The Salar de Atacama, located approximately 250 kilometers east of Antofagasta, is a salt-encrusted depression in the Atacama Desert, within which lies an underground deposit of brines contained in porous sodium chloride rock fed by an underground inflow from the Andes mountains, which is the result of



millions of years of climatic and tectonic impacts. Brines are pumped from depths of 1.5 to 150 meters below surface, through a field of wells that are located in the Salar de Atacama, distributed in areas authorized for exploitation, and which contain relatively high concentrations of potassium, lithium, sulfates, boron and other minerals.

The brines are estimated to cover a surface of approximately 2,800 square kilometers and contain commercially exploitable deposits of potassium, lithium, sulfates and boron. Concentrations vary at different locations throughout the Salar de Atacama. Our mining exploitation rights to the Salar de Atacama are pursuant to the Lease Agreement, which expires in 2030. The Lease Agreement, as amended in January 2018, permits the CCHEN to establish a total accumulated production and sales limit of up to 349,553 metric tons of lithium metallic equivalent (1,860,670 tons of lithium carbonate equivalent), which is in addition to the approximately 64,816 metric tons of lithium metallic equivalent (345,015 tons of lithium carbonate equivalent) remaining from the originally authorized amount.

For the year ended December 31, 2019, revenues related to products originating from the Salar de Atacama represented 37% of our consolidated revenues, consisting of revenues from our potassium business line and our lithium and derivatives business line for the period. All of our products originating from the Salar de Atacama are derived from our extraction operations under the Lease Agreement. As of December 31, 2019, only 11 years remain on the term of the Lease Agreement.

## Products Derived from the Salar de Atacama Brines

The products derived from the Salar de Atacama brines are: potassium chloride, potassium sulfate, lithium carbonate, lithium hydroxide, lithium chloride, lithium sulfate, boric acid and bischofite (magnesium chloride).

## Potassium Chloride

We use potassium chloride in the production of potassium nitrate. Production of our own supplies of potassium chloride provides us with substantial raw material cost savings. We also sell potassium chloride to third parties, primarily as a commodity fertilizer.

In order to produce potassium chloride, brines from the Salar de Atacama are pumped to solar evaporation ponds. Evaporation of the water contained in the brine, results in a crystallized mixture of salts with various content levels of potassium, sodium and magnesium. In the first stage of the evaporation process, sodium chloride salts (halite) precipitate, they are then harvested are removed; these salts are not used in the production process of other products. In the second stage of the evaporation process, the remaining brine from the first stage is transferred to other evaporation ponds where potassium chloride salts together with sodium chloride (silvinite) precipitate, these salts are harvested and then sent for treatment at one of the wet potassium chloride plants where potassium chloride is separated by a grinding, flotation, and filtering process. In the final evaporation stage, salts containing magnesium are harvested and eventually can be treated at one of the cold leach plants where magnesium is removed. Part of the potassium chloride is transported approximately 300 kilometers to our Coya Sur facilities via a dedicated truck transport system, where it is used in the production of potassium nitrate. The use of potassium chloride salts as a raw material in Coya Sur allows us to capture significant savings, as it allows us to use potassium salts with different qualities and to avoid buying and importing potassium chloride from external sources.

The remainder of the potassium chloride produced at the Salar de Atacama is shipped to our port in Tocopilla in either crystalized (standard) or granular (compacted) form and then shipped and sold as a commodity fertilizer to third parties. All of our potassium-related plants in the Salar de Atacama currently have a nominal production capacity of up to 2.6 million metric tons per year. Actual production capacity depends on volume, metallurgical recovery rates quality of the salts used in the process and quality of the mining resources pumped from the Salar de Atacama.



The by-products of the potassium chloride production process are (i) solutions remaining after removal of the potassium chloride, which are used to produce lithium carbonate as described below, with the excess amount not required for lithium carbonate production being reinjected into the Salar de Atacama; (ii) sodium chloride, which is similar to the surface material of the Salar de Atacama and is deposited at sites near the production facility and (iii) other salts containing magnesium chloride.

## Lithium Carbonate and Lithium Chloride

After the production of potassium chloride, a portion of the solutions remaining is sent to additional solar concentration ponds adjacent to the potassium concentration ponds. At this stage, the solution is purified and concentrated by precipitation to remove impurities it may still contain, including calcium, sulfate, potassium, sodium and magnesium, reaching a lithium concentration level of approximately 6%. Next is the process of concentration and purification of the remaining concentrated solution of lithium chloride, which is transported by truck to the Salar del Carmen production facility located near Antofagasta, approximately 230 kilometers southeast of the Salar de Atacama. At this plant, the solution is further purified and treated with sodium carbonate to produce lithium carbonate, which is dried and then, if necessary, compacted and finally packaged for shipment to customers.

The production capacity of our lithium carbonate facility at the end of 2019, following an expansion project that took place in 2018 and 2019, was 70,000 metric tons per year. We are now beginning the further expansion to 120,000 metric tons per year; which we expect to reach during 2021.

Future production will depend on the actual volumes and quality of the lithium solutions sent by the Salar de Atacama operations, as well as prevailing market conditions. Our future production will also be subject to the extraction limit described in the Lease Agreement mentioned above.

Our lithium carbonate production quality assurance program has been certified by TÜV-Rheiland under ISO 9001 since 2005 and specifically under ISO 9001:2015 since September 2018.

## Lithium Hydroxide

Lithium carbonate is sold to customers, and we also use it as a raw material for our lithium hydroxide production, which started operations at the end of 2005. We currently have two lithium hydroxide plants, one of which entered into operations at the end of 2018, and a total production capacity of 13,500 metric tons per year. These plants are located in the Salar del Carmen, adjacent to our lithium carbonate operations. In the production process, lithium carbonate is reacted with a lime solution to produce lithium hydroxide brine and calcium carbonate salt, which is filtered and piled in reservoirs. The lithium hydroxide solution is evaporated in a multiple effect evaporator and crystallized to produce the lithium hydroxide, which is filtered, dried and packaged for shipment to customers.

During 2019, we moved forward on an expansion plan which will allow us to produce an additional 8,000 metric tons per year of lithium hydroxide, reaching a total capacity of 21,500 metric tons per year. We believe this capacity level will be reached by the beginning of 2021.

Our lithium hydroxide production quality assurance program has been certified by TÜV-Rheiland under ISO 9001 since 2007 and specifically under ISO 9001:2015 since September 2018.

## Potassium Sulfate and Boric Acid

Approximately 12 kilometers northeast of the potassium chloride facilities at the Salar de Atacama, we use the brines from the Salar de Atacama to produce potassium sulfate, potassium chloride (as a by-product of the potassium sulfate process) and, depending on market conditions, boric acid. The plant is located in



an area of the Salar de Atacama where high sulfate and potassium concentrations are found in the brines to produce potassium sulfate. The brine is pumped to solar evaporation ponds, where sodium chloride salts are precipitated, harvested and put into piles. After further evaporation, the sulfate and potassium salts precipitate in different concentrations and are harvested and sent for processing to the potassium sulfate plant. Potassium sulfate is produced using flotation, concentration and reaction processes, after which it is crystallized, filtered, dried, classified and packaged for shipment.

Production capacity for the potassium sulfate plant is approximately 340,000 metric tons per year, of which approximately 95,000 metric tons correspond to potassium chloride obtained as a byproduct of the potassium sulfate process. This capacity is part of the total nominal plant capacity of 2.6 million metric tons per year. In our dual plant complex, we may switch, to some extent, between potassium chloride and potassium sulfate production. Part of the pond system in this area is also used to process potassium chloride brines extracted from the low sulfate concentration areas found in the Salar de Atacama. Depending on the conditions for the optimization of the deposit operation and/or market conditions, potassium sulfate production can be modified to produce potassium chloride.

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

## Raw Materials

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

Other important raw materials are sodium carbonate (used for lithium carbonate production and for the neutralization of iodine solutions), sulfuric acid, kerosene, anti-caking and anti-dust agents, ammonium nitrate (used for the preparation of explosives in the mining operations), woven bags for packaging our final products, electricity acquired from electric utilities companies, and liquefied natural gas and fuel oil for heat generation. Our raw material costs (excluding caliche ore and salar brines and including energy) represented approximately 16% of our cost of sales in 2019.

Since 2017, we have been connected to the central grid, which supplies electricity to the majority of cities and industries in Chile. We have several electricity supply agreements signed with major producers in Chile, which are within the contract terms. Our electricity needs are primarily covered by the Electrical Energy Supply Agreement that we entered into with AES Gener S.A. on December 31, 2012. Pursuant to the terms of the Electrical Energy Supply Agreement, we are required to purchase an amount of electricity that exceeds the amount that we estimate we will need for our operations. The excess amount is sold at marginal cost, which could result in a material loss for us.

For our supply of liquefied natural gas, we maintain a five-year contract with Engie, which was executed in 2019. In addition, we have a supply of liquefied petroleum gas (LPG) from Lipigas in the Salar del Carmen and we plan to have a supply of liquefied petroleum gas (LPG) from Lipigas in the Salar de Atacama as well beginning in 2020 to replace diesel consumption.

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



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

## Water Supply

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

## Research and Development, Patents and Licenses, etc.

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

Our research and development policy emphasizes the following: (i) optimizing current processes in order to decrease costs and improve product quality through the implementation of new technology, (ii) developing higher-margin products from current products through vertical integration or different product specifications, (iii) adding value to inventories and (iv) using renewable energy in our processes.

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

We have patented several production processes for nitrate, iodine and lithium products. These patents have been filed mainly in the United States, Chile and in other countries when necessary. The patents used in our production processes include Chilean patent No. 47,080 for iodine (production of spherical granules of chemicals that sublime) and Japanese patent No. 4,889,848 for nitrates (granular fertilizers).

## Licenses, Franchises, and Royalties

We do not have contracts that give rise to an obligation for the Company to make payments for licenses, franchises or royalties in any of our business lines, other than payments provided for in the Royalty Law.

We have subscribed purchase option contracts for mining concessions such that, in the event that third parties exercise the respective option, we have the right to receive royalty payments as a result of the exploitation of such concessions.

See section 3) D) Description of Business Environment: Property and Facilities for information about our concessions.

## 3) D) DESCRIPTION OF BUSINESS ENVIRONMENT: PROPERTY AND FACILITIES



We carry out our operations through the use of mining rights, production facilities and transportation and storage facilities. Discussion of our mining rights is organized below according to the geographic location of our mining operations. Our caliche ore mining interests are located throughout the valley of the Tarapacá and Antofagasta regions of northern Chile (in a part of the country known as “el Norte Grande”). From caliche ore, we produce products based on nitrates and iodine, and caliche also contains concentrations of potassium. Our mining interests in the brine deposits of the Salar de Atacama are found within the Atacama Desert, in the eastern region of el Norte Grande. From these brines we produce products based on potassium, sulfate, lithium and boron.

The map below shows the location of our principal mining operations and the exploitation and exploration mining concessions that have been granted to us, as well as the mining properties that we lease from Corfo:







## Mining Concessions

## Mining Concessions for the Exploration and Exploitation of Caliche Ore Mining Resources

We hold our mining rights pursuant to mining concessions for exploration and exploitation of mining resources that have been granted pursuant to applicable law in Chile:

(1) “Mining Exploitation Concessions”: entitle us to use the land in order to exploit the mineral resources contained therein on a perpetual basis, subject to annual payments to the Chilean government.

(2) “Mining Exploration Concessions”: entitle us to use the land in order to explore for and verify the existence of mineral resources for a period of two years, at the expiration of which the concession may be extended one time only for two additional years, if the area covered by the concession is reduced by half. We may alternatively request an exploitation concession in respect of the area covered by the original exploration concession, which must be made within the timeframe established by the original exploration concession.

A Mining Exploration Concession is generally obtained for purposes of evaluating the mineral resources in a defined area. If the holder of the Mining Exploration Concession determines that the area does not contain commercially exploitable mineral resources, the Mining Exploration Concession is usually allowed to lapse. An application also can be made for a Mining Exploitation Concession without first having obtained a Mining Exploration Concession for the area involved.

As of December 31, 2019, the surface area covered by Mining Exploitation Concessions that have been granted in relation to the caliche resources of our mining sites is approximately 558,801 hectares. In addition, as of December 31, 2019, the surface area covered by Mining Exploration Concessions in relation to the caliche resources of our mining sites is approximately 300 hectares. We have not requested additional mining rights.

## Mining Concessions for the Exploitation of Brines at the Salar de Atacama

As of December 31, 2019, our subsidiary SQM Salar held exclusive rights to exploit the mineral resources in an area covering approximately 140,000 hectares of land in the Salar de Atacama in northern Chile, of which SQM Salar is only entitled to exploit the mineral resources in 81,920 hectares. These rights are owned by Corfo and leased to SQM Salar pursuant to the Lease Agreement. Corfo cannot unilaterally amend the Lease Agreement, and the rights to exploit the resources cannot be transferred. The Lease Agreement establishes that SQM Salar is responsible for making quarterly lease payments to Corfo according to specified percentages of the value of production of minerals extracted from the Salar de Atacama brines, maintaining Corfo’s rights over the Mining Exploitation Concessions and making annual payments to the Chilean government for such concession rights. The Lease Agreement was entered into in 1993 and expires on December 31, 2030.

Under the terms of the Project Agreement, Corfo has agreed that it will not permit any other person to explore, exploit or mine any mineral resources in the approximately 140,000 hectares area of the Salar de Atacama mentioned above. The Project Agreement expires on December 31, 2030.

SQM Salar holds an additional 236,692 hectares of constituted Mining Exploitation Concessions in areas near the Salar de Atacama, which correspond to mining reserves that have not been exploited. SQM Salar also holds Mining Exploitation Concessions that are in the process of being granted covering 4,980 hectares in areas near the Salar de Atacama.



In addition, as of December 31, 2019, SQM Salar held Mining Exploration Concessions covering approximately 16,900 hectares and had applied for additional Mining Exploration Concessions of approximately 1,600 hectares. Exploration rights are valid for a period of two years, after which we can (i) request a Mining Exploitation Concession for the land, (ii) request an extension of the Mining Exploration Concession for an additional two years (the extension only applies to a reduced surface area equal to 50% of the initial area) or (iii) allow the concession to expire.

According to the terms of the Lease Agreement, with respect to lithium production, the CCHEN established a total accumulated extraction limit set as amended by the Corfo Arbitration Agreement in January 2018, up to 349,553 metric tons of lithium metallic equivalent (1,860,670 tons of lithium carbonate equivalent), which is in addition to the approximately 64,816 metric tons of lithium metallic equivalent (345,015 tons of lithium carbonate equivalent) remaining from the originally authorized amount in the aggregate for all periods while the Lease Agreement is in force. As of December 31, 2019, only 11 years remain on the term of the Lease Agreement.

## Concessions Generally

As of December 31, 2019, approximately 99% of SQM’s mining interests were held pursuant to Mining Exploitation Concessions and 1% pursuant to Mining Exploration Concessions. Of the Mining Exploitation Concessions, approximately 97% already have been granted pursuant to applicable Chilean law, and approximately 3% are in the process of being granted. Of the Mining Exploration Concessions, approximately 76% already have been granted pursuant to applicable Chilean law, and approximately 24% are in the process of being granted.

In 2019, we made payments of approximately US$7.7 million to the Chilean government for Mining Exploration and Exploitation Concessions, including the concessions we lease from Corfo. These payments do not include the payments we made directly to Corfo pursuant to the Lease Agreement, according to the percentages of the sales price of products produced using brines from the Salar de Atacama.

The following table shows the Mining Exploitation and Exploration Concessions held by SQM, including the mining properties we lease from Corfo, as of December 31, 2019:

<table><tr><td></td><td colspan="2">Exploitation Concessions</td><td colspan="2">Exploration Concessions</td><td colspan="2">Total</td></tr><tr><td>Region of Chile</td><td>Total Number</td><td>Hectares</td><td>Total Number</td><td>Hectares</td><td>Total Number</td><td>Hectares</td></tr><tr><td>Region I.</td><td>2,831</td><td>534,996</td><td>4</td><td>1,000</td><td>2,835</td><td>535,996</td></tr><tr><td>Region II.</td><td>8,805</td><td>2,309,591</td><td>94</td><td>36,100</td><td>8,899</td><td>2,345,691</td></tr><tr><td>Region III and others.</td><td>486</td><td>109,776</td><td>2</td><td>1,100</td><td>488</td><td>110,876</td></tr><tr><td>Total.</td><td>12,122</td><td>2,954,363</td><td>100</td><td>38,200</td><td>12,222</td><td>2,992,563</td></tr></table>

The majority of the Mining Exploitation Concessions held by SQM were requested primarily for non-metallic mining purposes. However, a small percentage of our Mining Concessions were requested for metallic mining purposes. The annual payment to the Chilean government for this group of concessions is higher.

Geological studies over mining properties that were requested primarily for non-metallic mining purposes may show that the concession area is of interest for metallic mining purposes, in which case we must inform the Sernageomin, indicating that the type of substance contained by such Mining Concessions has changed, for purposes of the annual payment for these rights.



## Caliche: Facilities and Reserves

## Caliche: Facilities

During 2019, our mining operations concentrated in the First Region where we mainly worked in the mining sector Tente en el Aire and in the mining sectors Nueva Victoria Oeste, Norte and Sur. In November 2015, the mining and nitrate operations at Pedro de Valdivia were suspended, and iodine production was reduced at the Pedro de Valdivia site, in order to take advantage of the highly efficient production facilities at Nueva Victoria. Operations at the Pampa Blanca site were suspended in 2010, and heap leaching operations at the María Elena site were suspended in October 2013, although iodine processing continued until 2017.

## Nueva Victoria

The Nueva Victoria mine and facilities are located 140 kilometers southeast of Iquique and are accessible by highway. Since 2007, the Nueva Victoria mine includes the mining properties Soronal, Mapocho and Iris. At this site, we use caliche to produce salts rich in nitrates and iodine, through heap leaching and the use of solar evaporation ponds. The main production facilities at this site include the operation centers for the heap leaching process, the iodide and iodine plants at Nueva Victoria and Iris and the evaporation ponds at the Sur Viejo sector of the site. The areas currently being mined are located approximately 25 kilometers northeast of Nueva Victoria. Solar energy and electricity are the primary sources of power for this operation.

## Pampa Blanca

The mining facilities at Pampa Blanca, which is located 100 kilometers northeast of Antofagasta, have been suspended since March 2010. At this site, we used caliche to produce nitrates and iodine through heap leaching and the use of solar evaporation ponds. The main production facilities at this site included the operation centers for the heap leaching system and the iodide plant. Electricity was the primary source of power for this operation.

## Pedro de Valdivia

The Pedro de Valdivia mine and facilities are located 170 kilometers northeast of Antofagasta and are accessible by highway. At this site, we used caliche to produce nitrates and iodine through vat leaching and solar evaporation ponds. The main production facilities at this site include the crushing, vat leaching, fines processing, nitrate crystallization plant, and iodide and iodine plants. In November 2015, the mining and nitrate operations at Pedro de Valdivia were suspended, and iodine production was reduced. Electricity, natural gas and fuel oil are the primary sources of power for this operation.

## María Elena

The María Elena mine and facilities, named El Toco, are located 220 kilometers northeast of Antofagasta and are accessible by highway. Until February 2010, caliche was used at this facility to produce nitrates and iodine through vat leaching. Subsequently, these facilities were equipped to produce nitrates and iodine through the use of heap leaching and solar evaporation ponds. Heap leaching operations at this site were suspended in October 2013. During 2017, we continued to produce solutions rich in iodine and nitrates by leaching the mine tailings. which were treated at the iodide plant at María Elena, and subsequently the prilled iodine is produced at Pedro de Valdivia. This process was discontinued at the end of 2017.

## Caliche: Reserves

Our in-house staff of geologists and mining engineers prepares our estimates of caliche ore reserves. The Proven and Probable Reserve figures presented below are estimates, and may be subject to modifications due to natural factors that affect the distribution of mineral grades, which would, in turn, modify the



recovery of nitrate and iodine. Therefore, no assurance can be given that the indicated levels of recovery of nitrates and iodine will be realized.

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

A Mineral Resource is a concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the Earth’s crust in such form or quantity and of such grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological, metallurgical and technological evidence.

A Measured Resource is the part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a high level of confidence. The estimate is based on detailed exploration, sampling and testing information gathered through appropriate sampling techniques from locations such as outcrops, trenches, and exploratory drill holes.

An Indicated Mineral Resource is the part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence. The estimate is based on detailed exploration, sampling and testing information gathered through appropriate sampling techniques from locations such as outcrops, trenches and exploratory drill holes.

According to our experience in caliche ore, the grid pattern drill-holes with spacing equal to or less than 100 meters produce data on the caliche resources that is sufficiently defined to consider them Measured Resources and then, adjusting for technical, economic and legal aspects, as Proven Reserves. These reserves are obtained using the Kriging Method and the application of operating parameters to obtain economically profitable reserves.

Similarly, the information obtained from detailed geologic work and samples taken from grid pattern drill-holes with spacing equal to or less than 200 meters can be used to determine Indicated Resources. By adjusting such Indicated Resources to account for technical, economic and legal factors, it is possible to calculate Probable Reserves. Probable Reserves are calculated by using a polygon-based methodology and have an uncertainty or margin of error greater than that of Proven Reserves. However, the degree of certainty of Probable Reserves is high enough to assume continuity between points of observation.

Proven Reserves are the economically mineable part of a Measured Resource. The calculation of the reserves includes the application of mining parameters including maximum overburden, minimum thickness of caliche ore, stripping ratio, cutoff grade and application of dilution factors to the grade values. Appropriate assessments, including pre-feasibility studies or feasibility studies, have been carried out and include consideration of metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction is reasonably justified.

Probable Reserves are the economically mineable part of an Indicated Resource and in some cases a Measured Resource. The calculation of the reserves includes the application of mining parameters including maximum overburden, minimum thickness of caliche ore, stripping ratio, cutoff grade and



application of dilution factors to the grade values. Appropriate assessments, including pre-feasibility studies, have been carried out or are in process and include consideration of metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction is reasonably justified.

The estimates of Proven Reserves of caliche ore at each of our mines as of December 31, 2019 are set forth below. The Company holds 100% of the concession rights for each of these mines.

<table><tr><td></td><td>Proven Reserves (1) (millions of metric tons)</td><td>Nitrate Average Grade (percentage by weight)</td><td>Iodine Average Grade (parts per million)</td><td>Cutoff Grade Average for Mine (2)</td></tr><tr><td>Mine</td><td></td><td></td><td></td><td></td></tr><tr><td>Pedro de Valdivia</td><td>91.9</td><td>6.9%</td><td>424</td><td>Nitrate 6.0 %</td></tr><tr><td>María Elena</td><td>83.3</td><td>7.2%</td><td>436</td><td>Iodine 300 ppm</td></tr><tr><td>Pampa Blanca</td><td>54.7</td><td>5.7%</td><td>538</td><td>Iodine 300 ppm</td></tr><tr><td>Nueva Victoria</td><td>324.7</td><td>5.5%</td><td>445</td><td>Iodine 300 ppm</td></tr></table>

In addition, the estimates of our Probable Reserves of caliche ore at each of our principal mines as of December 31, 2019, are as follows:

<table><tr><td></td><td>Probable Reserves (3) (millions of metric tons)</td><td>Nitrate Average Grade (percentage by weight)</td><td>Iodine Average Grade (parts per million)</td><td>Cutoff Grade Average for Mine (2)</td></tr><tr><td>Mine</td><td></td><td></td><td></td><td></td></tr><tr><td>Pedro de Valdivia</td><td>240.9</td><td>6.2%</td><td>414</td><td>Nitrate 6.0 %</td></tr><tr><td>María Elena</td><td>148.8</td><td>7.2%</td><td>381</td><td>Iodine 300 ppm</td></tr><tr><td>Pampa Blanca</td><td>535.5</td><td>5.3%</td><td>497</td><td>Iodine 300 ppm</td></tr><tr><td>Nueva Victoria</td><td>984.7</td><td>5.2%</td><td>421</td><td>Iodine 300 ppm</td></tr></table>

Notes on reserves:

(1) The Proven Reserves set forth in the table above are shown before losses related to exploitation and mineral treatment. Proven 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 each of 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 60% and 70%.

(2) The cutoff grades for the Proven and Probable Reserves vary according to the objectives of each mine. These amounts correspond to the averages of the different areas.

(3) Probable Reserves can be expressed as Proven Reserves using a conversion factor, only for purposes of obtaining a projection to be used for long-term planning purposes. On average, this conversion factor is higher than 60%, depending on geological conditions and caliche ore continuity, which vary from mine to mine (Pedro de Valdivia 60%, María Elena 50%, Pampa Blanca 70% and Nueva Victoria 60%).

The complete technical supporting documentation for the information set forth in the table above is contained in the report “Methodology, Procedure, and Classification of SQM’s Nitrate and Iodine Resources and Reserves for the Year 2019,” was prepared for each mine by the geologist Vladimir Tejerina and other engineering professionals employed by SQM and validated by Mr. Sergio Alarcón and Mr. Marco Lema.

Mr. Sergio Alarcón is a geologist with more than 35 years of experience in the field. He is currently employed by SQM as a Senior Geologist in the Mining Production area. Mr. Alarcón is a Competent Person (Persona Competente), as that term is defined under Chilean Law No. 20,235, known as the Law that Regulates the Position of Competent Persons and Creates the Qualifying Committee for Competencies in Mining Resources and Reserves (Ley que Regula la Figura de las Personas Competentes



y Crea la Comisión Calificadora de Competencias de Recursos y Reservas Mineras or “Competent Person Law”). He is registered under No. 164 in the Public Registry of Competent Persons in Mining Resources and Reserves in accordance with the Competent Person Law and related regulations. He has worked as a geologist with both metallic and non-metallic deposits, with vast experience in the latter.

Mr. Marco Lema is a civil mining engineer with more than 35 years of experience. He works for SQM as Superintendent of Geology and Engineering in the mining production area. Mr. Lema is a Competent Person (Persona Competente), as that term is defined under Chilean Law No. 20,235, known as the Law that Regulates the Position of Competent Persons and Creates the Qualifying Committee for Competencies in Mining Resources and Reserves (Le y que Regula la Figura de las Personas Competentes y Crea la Comisión Calificadora de Competencias de Recursos y Reservas Mineras or “Competent Person Law”). He has experience working on metallic and non-metallic mine deposits.

Copies of the certificates of qualified competency issued by the Chilean Mining Commission are presented below:



# CERTIFICATE OF QUALIFIED COMPETENCY

The Chilean Comisión Calificadora de Competencias en Recursos y Reservas Mineras \( ^{1} \) , certifies that Mr. Sergio Alarcón Rubilar, National Id. Nr 8.678.370-3, Geologist, is registered in the Public Registry of Competent Persons in Mining Resources and Reserves from March 2012, under Nr. 0164, with specialization in Geology, and that her competencies and experience as a Competent Person allow her to inform and report on mineral resources and reserves.

The Chilean Mining Commission issued this certificate at the request of Mr. Alarcón to present:

UNITED STATES - SECURITIES AND EXCHANGE COMMISSION
FORM 20-F, for the fiscal year ended December 31, 2019



Gladys Hernández
Executive Secretary



Santiago, March 10, 2020
CM - 907 - 03 2020

## Information:

A. The Certificate of Qualified Competency proves the validity of the party's competencies to form or report about a specific matter or subject in the context of mining resources and reserves in accordance with the competencies and experience of a Competent Person.

b. Law No. 28.235, Article 18º For the preparation of the technical and public reports, the Competent Persons must adhere strictly to the rules, regulations, criteria and procedures established in the Code, and likewise to all other rules of technical character that the Mining Commission exists using their legal facilities.

C. Application of CH 28.235 code and use of this certificate is the sole responsibility of the person concerned, according to the technical criteria and ethical standards set forth in Law No. 26.235.

d. For all legal purposes, the Certificate of Good Standing shall be valid only for its intended use.

The Commission of the Competencies in Resources and Resources Minerals is member of the Committee for Mineral Resources International Reporting Standards (CRESSC) and the Competencies in Resources and Resources Minerals (CRESSC) and the Competencies in Resources and Resources Minerals (CRESSC) are the CRESSC (CRESSC) and the CRESSC (CRESSC) and the CRESSC (CRESSC) are the CRESSC (CRESSC) and the CRES









COLEGIO DE INGENIEROS DE CHILE A.C.

Luis Thayer Ojeda 166, oficina 706, Providencia - Santiago de Chile - Teléfonos (56) 222 345 134 - 222 343 016



## CERTIFICATE OF QUALIFIED COMPETENCY

The Chilean Comisión Calificadora de Competencias en Recursos y Reservas Mineras \( ^{1} \) , certifies that Mr. Marco Lema Lema, National Id. Nr 9.026.574-1, Mining Engineer, is registered in the Public Registry of Competent Persons in Mining Resources and Reserves from January 2019, under Nr. 0375, with specialization in Mining, and that her competencies and experience as a Competent Person allow her to inform and report on mineral resources and reserves

The Chilean Mining Commission issued this certificate at the request of Mr. Lema to present:

UNITED STATES - SECURITIES AND EXCHANGE COMMISSION
FORM 20-F, for the fiscal year ended December 31, 2019



Gladys Hernández S.
Executive Secretary



Santiago, March 10, 2020
CM - 999 - 03 2020

## Information:

a. The Certificate of Qualified Competency proves the validity of the party's competencies to inform or report about a specific matter or subject in the context of mining resources and reserves in accordance with the competencies and experience of a Competent Person.

b. Law No. 28.235, Article 18 \( ^{1} \) . For the preparation of the technical and public reports, the Competent Persons must adhere strictly to the rules, regulations, criteria and procedures established in the Code, and license to all other rules of technical character that the Mining Commission exists using their legal facilities.

c. Application of CH 20.235 code and use of this certificate is the sole responsibility of the person concerned, according to the technical criteria and ethical standards set forth in Law No. 20.235.

d. For all legal purposes, the Certificate of Good Standing shall be valid only for the management imposed

The Council of California de Competencias en Recursos y Recursos Mineros is a member of the Committee for Mineral Resources International Reporting Standards (CERISCO) that reports the requirements of the CERISCO (CERISCO), Brazil (CERISCO), Canada (CERISCO) - NI 45-101), Colombia (CERISCO), Chile (CERISCO) (CERISCO), EU (CERISCO), Europe (CERISCO), India (NACRIL), Indonesia (KOMEL), Kazakhstan (KAZIC), Mongolia (MGM), Russia (CERISCO), Saudi Arabia (SAMCODES) and Togo (UMEREX), which respond to a common international rating to inform and report protection projects, mining resources and reserves.







CORREO
DE INGENIEROS
DE CORREO A.G.

Luis Thayer Ojeda 166, oficina 706, Providencia - Santiago de Chile - Teléfonos (56) 222 345 134 - 222 343 016



The proven and probable reserves shown above are the result of the evaluation of approximately 21% of the total caliche-related mining property of our Company. However, we have explored more intensely the areas in which we believe there is a higher potential of finding high-grade caliche ore minerals. The remaining 79% of this area has not been explored or has had limited reconnaissance, which is not sufficient to determine the potential and hypothetical resources. In 2019, we did not carry out basic reconnaissance of new mining properties. With respect to detailed explorations, in 2019, we carried out recategorizations of indicated resources in the Tente en Alre and Hermosa Norte sectors, totaling 4,456 hectares, which is still in process. Our 2020 exploration program includes the exploration of the Tente en el Aire sector, which totals 658 hectares, and the basic study of 4,100 hectares of the Mina Oeste and Tente en el Aire Oeste sectors. The reserves shown in these tables are calculated based on properties that are not involved in any legal disputes between SQM and other parties.

Caliche ore is the key raw material used in the production of iodine, specialty plant nutrients and industrial chemicals. The following gross margins for the business lines specified were calculated on the same basis as cut off grades used to estimate our reserves. We expect costs to remain relatively stable in the near future.

<table><tr><td rowspan="2"></td><td colspan="2">2019</td><td colspan="2">2018</td><td colspan="2">2017</td></tr><tr><td>Gross Margin</td><td>Price</td><td>Gross Margin</td><td>Price</td><td>Gross Margin</td><td>Price</td></tr><tr><td>Iodine and Derivatives.....</td><td>38%</td><td>US$29/kg</td><td>33%</td><td>US$24/kg</td><td>21%</td><td>US$20/kg</td></tr><tr><td>Specialty Plant Nutrition.</td><td>21%</td><td>US$695/ton</td><td>22%</td><td>US$722/ton</td><td>20%</td><td>US$722/ton</td></tr><tr><td>Industrial Chemicals.....</td><td>33%</td><td>US$768/ton</td><td>33%</td><td>US$797/ton</td><td>32%</td><td>US$809/ton</td></tr></table>

We maintain an ongoing program of exploration and resource evaluation on the land surrounding our production mines, and other sites for which we have the appropriate concessions.

## Brines from the Salar de Atacama: Facilities and Reserves

## Salar de Atacama: Facilities

## Salar de Atacama

Our facilities at the Salar de Atacama are located 208 kilometers to the east of the city of Antofagasta and 188 kilometers to the southeast of the city of María Elena. At this site we use brines extracted from the salar to produce potassium chloride, potassium sulfate, boric acid, magnesium chloride salts and lithium solutions, which are subsequently sent to our lithium carbonate plant at the Salar del Carmen for processing. The main production plants at this site include the potassium chloride flotation plants (MOP-H I and II), the potassium carnalite plants (PC I and extension), the potassium sulfate flotation plant (SOP-H), the boric acid plant (ABO), the potassium chloride drying plant (Dual Plant or MOP-S), the potassium chloride compacting plant (MOP-G), the potassium sulfate drying plant (SOP-S) and the potassium sulfate compacting plant (SOP-G). Solar energy is the primary energy source used for the Salar de Atacama operations.

## Salar de Atacama: Reserves

Our in-house staff of hydrogeologists and geologists prepares our estimates of the reserve base of potassium, sulfate, lithium and boron dissolved in brines at the Salar de Atacama. We have exploitation concessions covering an area of 81,920 hectares, in which we have carried out geological exploitation, brine sampling and geostatistical analysis. We estimate that our proven and probable reserves as of December 31, 2019, based on law, geological exploitation, brine sampling and geostatistical analysis up to a depth of 300 meters of our total exploitation concessions, are as follows:

<table><tr><td></td><td>Proven Reserves (1)</td><td>Probable Reserves (1)</td><td>Total Reserves</td></tr></table>



<table><tr><td></td><td>(millions of metric tons)</td><td>(millions of metric tons)</td><td>(millions of metric tons)</td></tr><tr><td>Potassium (K+) (2)</td><td>55.2</td><td>37.3</td><td>92.5</td></tr><tr><td>Sulfate (SO4-2) (3)</td><td>44.3</td><td>36.0</td><td>80.3</td></tr><tr><td>Lithium (Li+) (4)</td><td>5.7</td><td>3.4</td><td>9.2</td></tr><tr><td>Boron (B3+) (5)</td><td>1.6</td><td>1.2</td><td>2.8</td></tr></table>

Notes on reserves:

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

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

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

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

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

The information set forth in the table above was validated in February 2020 by Messrs. Andrés Fock and Orlando Rojas using information that was prepared by SQM’s hydrogeologists, geologists and engineers and external advisors.

Mr. Fock is a geologist with more than 15 years of experience in the field of mining hydrogeology. He is currently employed by SQM as Superintendent of Geology and Exploration, in the Salar Hydrogeology department. He is a Competent Person and is registered under No. 226 in the Public Registry of Competent Persons in Mining Resources and Reserves, in accordance with the Competent Person Law. As a hydrogeologist in Chile and abroad, he has evaluated multiple brine-based projects and has experience evaluating resources and reserves.

Mr. Orlando Rojas is a civil mining engineer and independent consultant. He is Partner and Chief Executive Officer of EMI-Ingenieros y Consultores S.A., whose offices are located at Los Domínicos No 7772, Las Condes, Santiago, Chile. He is a member of the Institute of Mining Engineers and is registered under No. 118 in the Public Registry of Competent Persons in Mining Resources and Reserves in accordance with the Competent Person Law and related regulations. He has worked as a mining engineer for 40 years since graduating from university, including more than 34 years working on estimates for reserves and resources.

A copies of the certificates of qualified competency issued by the Chilean Mining Commission are provided below:



## CERTIFICATE OF QUALIFIED COMPETENCY

The Chilean Comisión Calificadora de Competencias en Recursos y Reservas Mineras \( ^{1} \) , certifies that Mr. Andrés Fock Kunstmann, National Id. Nr 13.670.872-8, Geologist, is registered in the Public Registry of Competent Persons in Mining Resources and Reserves from July 2019, under Nr. 0388, with specialization in Geology, and that her competencies and experience as a Competent Person allow her to inform and report on mineral resources and reserves.

The Chilean Mining Commission issued this certificate at the request of Mr. Fock to present:

UNITED STATES - SECURITIES AND EXCHANGE COMMISSION
FORM 20-F, for the fiscal year ended December 31, 2019



Gladys Hernández
Executive Secretary



Santiago, March 10, 2020
CM - 910 - 03 2020

## Information:

a. The Certificate of Qualified Competency proves the validity of the party's competencies to inform or report about a specific matter or subject in the context of mining resources and reserves in accordance with the competencies and experience of a Competent Person.

b. Law No. 20.225, Article 18 \( ^{th} \) . For the preparation of the technical and public reports, the Competent Person must adhere strictly to the rules, regulations, criteria and procedures established in the Code, and likewise to all other rules of technical character that the Mining Commission cannot using their legal faculties.

C. Application of CH 20.225 code and use of this certificate in the sole responsibility of the person concerned, according to the technical criteria and official standards set forth in Law No. 20.225.

d. For all legal purposes, the Certificate of Greed Standing shall be valid only for the management required

The Comisión Calificadora de Competencias en Recursos y Reservas Mineras is a member of the Comisión de Mineral Recursos Intensional Reporting Standards (CRISCO) that groups the organizations Americas (JORC), Basel (CDR), Canada (CDM / N 43-101), Colombia (CDR), Chile (Comisión Minera CHRISIS), EUU (SME), Europe (PALC), India (NACR), Indonesia (KCM), Ecuador (KAR), Mongolia (MNGM), Russia (CRN), Saudi Arabia (SACOES) and Tepalco (TMBIC), which respond to a common international rating in fields and report exploration projects, mining resources and reserves.









Luis Thayer Odeja 166, oficina 706, Providencia - Santiago de Chile - Teléfonos (56) 222 345 134 - 222 343 016



## CERTIFICATE OF QUALIFIED COMPETENCY

The Chilean Comisión Calificadora de Competencias en Recursos y Reservas Mineras \( ^{1} \) , certifies that Mr. Orlando Rojas Vereelotti, National Id. Nr 6.209.299-8, Mining Engineer, is registered in the Public Registry of Competent Persons in Mining Resources and Reserves from August 2011, under Nr. 0118, with specialization in Mining, and that her competencies and experience as a Competent Person allow her to inform and report on mineral resources and reserves

The Chilean Mining Commission issued this certificate at the request of Mr. Rojas to present:

UNITED STATES - SECURITIES AND EXCHANGE COMMISSION
FORM 20-F, for the fiscal year ended December 31, 2019



Gladys Hernández S.
Executive Secretary



Santiago, March 10, 2020
CM - 98 - 02 2020

## Information:

a. The Certificate of Qualified Competency proves the validity of the party's competence to obtain or report about a specific matter or subject in the context of mining resources and reserves in accordance with the competencies and experience of a Competent Person.

b. Law No. 20.235, Article 10° For the preparation of the technical and public reports, the Competent Person must adhere strictly to the rules, regulations, criteria and procedures established in the Code, and likewise to all other rules of technical character that the Mining Commission cannot bring their legal faculties.

C. Application of CH 20.235 code and use of this certificate in the short periodability of the person concerned, according to the technical criteria and official standards set forth in Law No. 20.235.

d. For all legal purposes, the Certificate of Good Standing shall be valid only for the management reported

The Comisión Calificadora de Competencias en Recursos y Recursos Mineros a Comisión de Comisión de Comisión de Comisión de Comisión de Comisión de Comisión de Com



Luis Thayer Ojeda 166, oficina 706, Providencia - Santiago de Chile - Teléfonos [56] 222 345 134 - 222 343 016



The cutoff grade for lithium extraction is set at 0.05% Li. The cost of the process is competitive in the market despite a small cost increase due to the expansions in the evaporation area (to reach the required Li concentration) and to the use of additives to maintain the quality of the brine that is used to feed the plant.

A cutoff grade of 1.0% K is used in the calculation, considering a low margin scenario using only MOP-S as and using diluted brine with higher levels of contaminants as the raw material and with recovery yields of approximately 47%, which is on the lower end of the range. In this scenario, considering current market conditions and market conditions from recent years, the production cost of MOP production is still competitive.

The proven and probable reserves are based on production experience, drilling, brine sampling and geostatistic reservoir modeling in order to estimate brine volumes and their composition. We calculate the reserve base, which is the volume of brine effectively drainable or exploitable in each evaluation unit, by building a three-dimensional block model. The following variables are used to populate the model:

- Porosity: obtained from measurements of drainable porosity in core rocks, test pumping data, geophysical records and changes in the level of the brine. The volume of brine is estimated on the basis of the interpolation of the drainable porosity data.

- Grades: The brine chemistry is subjected to an exploratory data analysis and a variographic analysis, in order to determine the chemical populations in the Salar. Subsequently, the grades are interpolated using the Kriging method.

Based on the chemical characteristics, and the volume of brine, we determine the number of metric tons for each of the chemical ions being evaluated. Reserve classification is finally achieved by using geostatistical criteria and hydrogeological knowledge of the units that have been explored, as an indicator between proven and probable reserves.

Proven reserves are defined as hydrogeological units with proven historical brine yield production, and a quality and piezometric brine monitoring network to control brine evolution over time.

Probable reserves and inferred resources are being continually explored in order to be able to reclassify them as proven reserves and indicated or measured resources, respectively. This exploration includes systematic packer testing, chemical brine sampling and long-term pilot production pumping tests.

We consider chemical parameters to determine the process to be applied to the brines. These parameters are used to estimate potential restrictions on production yields, and the economic feasibility of producing such commercial products as potassium chloride, potassium sulfate, lithium carbonate and boric acid is determined on the basis of the evaluation.

Complementing the reserves information, SQM has an environmental impact assessment (RCA 226/06) which defines a maximum brine extraction until the end of the Lease Agreement (December 31, 2030). Considering the authorized maximum net brine production rates, we have performed hydrogeological simulations using numeric flow and transport models to estimate changes in the volume and quality of the brine during the life of the project, considering the ponds infrastructure projected and existing on January 1, 2020. According to these simulations, a total of 1.19 million metric tons of lithium and 14.41 million metric tons of potassium will be extracted from the producing wells. On the other hand, the proven and probable base reserve in situ, within the authorized area of environmental extraction (RCA 226/06), corresponds to 4.89 million metric tons of lithium and 34.8 million metric tons of potassium, enough to satisfy the demand of the project until the end of the concession.

Brines from the Salar de Atacama are the key raw material used in the production of potassium chloride and potassium sulfate, and lithium and its derivatives. The following gross margins for the business lines



specified were calculated on the same basis as cut off grades used to estimate our reserves. We expect costs to remain relatively stable in the near future.

<table><tr><td></td><td colspan="2">2019</td><td colspan="2">2018</td><td colspan="2">2017</td></tr><tr><td></td><td>Gross Margin</td><td>Price</td><td>Gross Margin</td><td>Price</td><td>Gross Margin</td><td>Price</td></tr><tr><td>Potassium Chloride and Potassium Sulfate. Lithium and Derivatives</td><td>17%</td><td>US$355/ton</td><td>19%</td><td>US$322/ton</td><td>17%</td><td>US$282/ton</td></tr><tr><td></td><td>39%</td><td>US$11,212/ton</td><td>57%</td><td>US$16,289/ton</td><td>71%</td><td>US$12,970/ton</td></tr></table>

## Other Production Facilities

## Coya Sur

The Coya Sur site is located approximately 15 kilometers south of María Elena, and production activities undertaken there are associated with the production of potassium nitrate and finished products. The main production plants at this site include four potassium nitrate plants with a total capacity of 1,300,000 metric tons per year. There are also five production lines for crystallized nitrates, with a total capacity of 1,200,000 metric tons per year, and a prilling plant with a capacity of 360,000 metric tons per year. The potassium nitrate produced at Coya Sur is an intermediate product that is used as a raw material for the production of finished products (crystallized nitrates and prilled nitrates). Therefore, the production capacities listed above are not independent of one another and cannot be added together to obtain an overall total capacity. Natural gas is the main source of energy for our Coya Sur operation.

## Salar del Carmen

The Salar del Carmen site is located approximately 14 kilometers to the east of Antofagasta. The production plants at this facility include the lithium carbonate plant, with a production capacity of 70,000 metric tons per year, and the lithium hydroxide plant, with a production capacity of 13,500 metric tons per year. Electricity and natural gas are the main sources of energy for our Salar del Carmen operation.



The following table provides a summary of our production facilities:

<table><tr><td>Facility</td><td>Type of Facility</td><td>Approximate Size (hectares) (1)</td><td>Nominal Production Capacity (thousands of metric tons/year)</td><td>Weighted Average Age (years) (2)</td><td>Gross Book Value (millions of US$) (2)</td></tr><tr><td>Coya Sur (3) (4) ........</td><td>Nitrates production</td><td>1.518</td><td>Potassium nitrate: 1,300Crystallized nitrates: 1,200Prilled nitrates: 360Nitrates: n/aIodine: 1.6Prilled nitrates: 300Iodine: 13.0</td><td>10.1</td><td>635.8</td></tr><tr><td>María Elena (5) (6)</td><td>Nitrates and iodine production</td><td>35.830</td><td>16.4</td><td>415.9</td><td></td></tr><tr><td>Nueva Victoria (5) (7)</td><td>Concentrated nitrate salts and iodine production</td><td>47.492</td><td>9.4</td><td>543.4</td><td></td></tr><tr><td>Pampa Blanca (5) (7) (8)</td><td>Concentrated nitrate salts and iodine production</td><td>10.441</td><td>11.9</td><td>8.1</td><td></td></tr><tr><td>Pedro de Valdivia (3) (9) ..............</td><td>Nitrates and iodine production</td><td>253.880</td><td>14.3</td><td>225.0</td><td></td></tr><tr><td>Salar de Atacama (3) (10) ..............</td><td>Potassium chloride, potassium sulfate, lithium chloride, and boric acid production</td><td>35.911</td><td>11.2</td><td>1,915.7</td><td></td></tr><tr><td>Salar del Carmen, Antofagasta (3) ........</td><td>Lithium carbonate and lithium hydroxide production</td><td>126</td><td>9.3</td><td>317.8</td><td></td></tr><tr><td>Tocopilla (11) ........</td><td>Port facilities</td><td>22</td><td>-</td><td>168.2</td><td></td></tr></table>

(1) Approximate size considers both the production facilities and the mine for María Elena, Nueva Victoria, Pampa Blanca, Pedro de Valdivia and the Salar de Atacama. Mining areas are those authorized for exploitation by the environmental authority and/or Sernageomin.

(2) Weighted average age and gross book value correspond to production facilities, excluding the mine, for María Elena, Nueva Victoria, Pampa Blanca, Pedro de Valdivia and the Salar de Atacama.

(3) Includes production facilities and solar evaporation ponds. During 2019, we began to work on the expansion of discard deposit area of the new lithium hydroxide plant and accumulation ponds.

(4) The potassium nitrate produced at Coya Sur is an intermediate product that is used as a raw material for the production of finished products (crystallized nitrates and prilled nitrates). Therefore, the production capacities listed above are not independent of one another and cannot be added together to obtain an overall total capacity.

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

(6) Operations at the El Toco mine at María Elena were suspended in November 2013.

(7) The nominal production capacity for iodine considers the capacity of our plants. The effective capacity is 14,800 metric tons per year.

(8) Operations at Pampa Blanca were suspended in March 2010.

(9) In November 2015, the mining and nitrate operations at Pedro de Valdivia were suspended, and iodine production was reduced at the Pedro de Valdivia site, in order to take advantage of the highly efficient production facilities at Nueva Victoria.

(10) Potassium chloride and potassium sulfate are produced in a dual plant, and the production capacity for each of these products depends on the production mix. Therefore, the production capacities for these two products are not independent of one another and cannot be added together to obtain an overall total capacity.

(11) The Tocopilla port facilities were originally constructed in 1961 and have been refurbished and expanded since that time.

We directly or indirectly through subsidiaries own, lease or hold concessions over the facilities at which we carry out our operations. Such facilities are free of any material liens, pledges or encumbrances, and we believe they are suitable and adequate for the business we conduct in them.



## Extraction Yields

The following table shows certain operating data relating to each of our mines for 2018, 2017 and 2016:

<table><tr><td>(in thousands, unless otherwise stated)</td><td>2019</td><td>2018</td><td>2017</td></tr><tr><td>Pedro de Valdivia(1)</td><td></td><td></td><td></td></tr><tr><td>Metric tons of ore mined</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Average grade nitrate (% by weight)</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Iodine (parts per million (ppm))</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Metric tons of crystallized nitrate produced</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Metric tons of iodine produced</td><td>1.4</td><td>1.0</td><td>0.9</td></tr><tr><td>Maria Elena(2)</td><td></td><td></td><td></td></tr><tr><td>Metric tons of ore mined</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Average grade nitrate (% by weight)</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Iodine (ppm)</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Metric tons of crystallized nitrate produced</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Metric tons of iodine produced</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Coya Sur(3)</td><td></td><td></td><td></td></tr><tr><td>Metric tons of crystallized nitrate produced</td><td>763</td><td>699</td><td>613</td></tr><tr><td>Pampa Blanca(2)</td><td></td><td></td><td></td></tr><tr><td>Metric tons of ore mined</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Iodine (ppm)</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Metric tons of iodine produced</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Nueva Victoria</td><td></td><td></td><td></td></tr><tr><td>Metric tons of ore mined</td><td>42,196</td><td>42,753</td><td>36,383</td></tr><tr><td>Iodine (ppm)</td><td>465</td><td>461</td><td>458</td></tr><tr><td>Metric tons of iodine produced</td><td>10.7</td><td>10.2</td><td>8.8</td></tr><tr><td>Salar de Atacama (4)</td><td></td><td></td><td></td></tr><tr><td>Metric tons of lithium carbonate produced</td><td>62.3</td><td>50.4</td><td>45</td></tr><tr><td>Metric tons of potassium chloride and potassium sulfate and potassium salts produced</td><td>1,049</td><td>1,505</td><td>1,881</td></tr></table>

(1) In November 2015, mining and nitrate operations at Pedro de Valdivia were suspended, and iodine production was reduced at the Pedro de Valdivia site, in order to take advantage of the highly efficient production facilities at Nueva Victoria.

(2) Operations at the Pampa Blanca mine and Maria Elena were suspended in March 2010 and November 2013, respectively. In María Elena, production of nitrate and iodine solutions continued in subsequent years from caliche ore exploited in prior years.

(3) Includes production at Coya Sur from treatment of nitrates solutions from María Elena and Pedro de Valdivia, nitrate salts from pile treatment at Nueva Victoria, and net production from NPT, or technical grade potassium nitrate, plants.

(4) Lithium carbonate is extracted at the Salar de Atacama and processed at our facilities at the Salar del Carmen. Potassium salts include synthetic sylvinite produced in the plant and other harvested potassium salts (natural sylvinite, carnalites and harvests from plant ponds) that are sent to Coya Sur for the production of crystallized nitrates.



## Transportation and Storage Facilities

The transportation of our products is carried out by trucks that are operated by dedicated third parties through long-term contracts. Furthermore, we own port and storage facilities for the transportation and management of finished products and consumable materials.

Our main centers for the production and storage of raw materials are the Nueva Victoria, Coya Sur and Salar de Atacama facilities. Other facilities include chemical plants for the finished products of lithium carbonate and lithium hydroxide at the Salar del Carmen plant. The Port of Tocopilla terminal, which we own, has a surface area of approximately 22 hectares and is the principal facility for the storage and shipment of our bulk products and packaged potassium chloride (MOP) and nitrates.

The nitrate finished products are produced at our Coya Sur facilities and then transported via trucks to the Port of Tocopilla terminal where they are stored and shipped, either packaged (polypropylene bags, polyethylene or polypropylene FIBC big bags) or in bulk. The potassium chloride is produced at our Salar de Atacama facilities and we transport it by truck, either to the Port of Tocopilla terminal or the Coya Sur facility. The product transported to Coya Sur is an intermediate product that is used as a raw material for the production of potassium nitrate. On the other hand, the product transported to the Port of Tocopilla is a final product that will be shipped or transported to the client or affiliate. The raw material of nitrate for the production of potassium nitrate in Coya Sur is currently produced at Nueva Victoria and the remaining raw material is provided from historical stock stored in Coya Sur that was produced at the Pedro de Valdivia facility when it was operating. This raw material is obtained from the processing of caliche that is extracted from our mines.

The lithium chloride solution, which contains a high concentration of boron, produced at our Salar de Atacama facilities, is transported to the lithium carbon plant in the Salar del Carmen area where the finished lithium carbonate is produced. Part of the lithium carbonate is provided to the adjacent lithium hydroxide plant where the finished lithium hydroxide is produced. These two products are packed in packaging of distinct characteristics (polyethylene bags, multi-layer or polypropylene FIBC big bags), stored within the same facilities and secured in storerooms. Thereafter, they are consolidated into containers that are transported by trucks to a transit warehouse or directly to port terminals for their subsequent shipment. The port terminals used are currently suited to receive container ships and are situated in Antofagasta, Mejillones and Iquique.

Iodine obtained from the same caliche used for the production of nitrates, is processed, packaged and stored exclusively in the Pedro de Valdivia and Nueva Victoria facilities. The packaging used for iodine are drums and polypropylene FIBC big bags with an internal polyethylene bag and oxygen barrier, which at the time of transportation are consolidated into containers and sent by truck to port terminals suited for their management, principally located in Antofagasta, Mejillones and Iquique. Thereafter, they are sent to distinct markets by container ship or by truck to Santiago where iodine derivatives are produced in the Ajay-SQM Chile plants.

The Port of Tocopilla terminal facilities are located approximately 186 kilometers north of Antofagasta, approximately 124 kilometers west of María Elena and Coya Sur and 372 kilometers to the west of Salar de Atacama. Our affiliate, Servicios Integrales de Tránsitos y Transferencias S.A. (SIT), operates facilities for the shipment of products and the delivery of certain raw materials based on renewable concessions granted by Chilean regulatory authorities, provided that the facilities are used in accordance with the authorization granted and we pay an annual concession fee. The Port of Tocopilla terminal facilities include a truck weighing machine that confirms product entry into the port and transfers the product to distinct storage zones, a piezometer within the shipping system to carry out bulk product loaded onto ships, a crane with a 40 ton capacity for the loading of sealed product onto ships and a nitrate mixing facility.



The storage facilities consist of a system of six silos, with a total storage capacity of 55,000 metric tons, and a mixed storage area of open storehouses with a total storage capacity of approximately 250,000 metric tons. In addition, to fulfill future storage needs, we will continue to make investments in accordance with the investment plan outlined by management. The products are also put into bags at the Port of Tocopilla terminal facilities where the bagging capacity is established by two bag packaging machines, one for sacks and polypropylene FIBC big bags and one for FFS polyethylene. The products that are packaged in Tocopilla may be subsequently shipped at the same port or may also be consolidated into trucks or containers for its subsequent dispatch to clients by land or sea through containers from other ports, principally located in Antofagasta, Mejillones and Iquique.

For the transportation of bulk product, the transportation belt system extends across the coastline to deliver products directly to the hatches of bulk cargo ships. The nominal load capacity of this shipping system is 1,200 tons per hour. The transportation of packaged product is carried out utilizing the same bulk cargo ships using trailers without motors located in the dock and loaded by a crane with a 40 ton capacity from the Port of Tocopilla terminal. Thereafter, they are towed and unloaded using ship cranes to the respective warehouses.

We normally contract bulk cargo ships to transfer the product from the Port of Tocopilla terminal to our hubs around the world or to clients directly, who, in certain instances, use their own contracted vessels for delivery.

Tocopilla processes related to the reception, handling, storage and shipment of bulk/packaged nitrates produced at Coya Sur are certified by the third-party organization TÜV-Rheiland under the quality standard ISO 9001:2015.

## Computer System

In addition to the above-listed facilities, we operate various computer and information systems linking our principal subsidiaries to our operating and administrative facilities throughout Chile, and other parts of the world. The computer and information system is used mainly for accounting, monitoring of supplies and inventories, billing, quality control, research activities and production process and maintenance control. The mainframe computing system is located at our offices in Santiago and our Chilean and international subsidiaries are interconnected with each other, through data links.

In addition, we have cloud technologies, which allow us to support new business processes and respond quickly and at low cost to changing conditions of our business and of the market.

A cyber security review is being carried out to highlight possible risks and mitigate them, including raising awareness among our users related to best process and computational use practices.

## 3) E) DESCRIPTION OF BUSINESS ENVIRONMENT: RISK FACTORS

## Risk Factors

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

## Risks Relating to our Business



We could be subject to numerous risks in the U.S. and Chile as a result of ongoing investigations by the Chilean Internal Revenue Service and the Chilean Public Prosecutor in relation to certain payments made by SQM between the tax years 2009 and 2015

In 2015, the Chilean Internal Revenue Service (Servicio de Impuestos Internos or “SII”) and the Chilean Public Prosecutor brought a number of criminal and administrative proceedings following investigations related to the payment of invoices by SQM and its subsidiaries SQM Salar S.A. (“SQM Salar”) and SQM Industrial S.A., for services that may not have been properly supported or that may not have been necessary to generate corporate income, against (i) Patricio Contesse G., the Company’s former CEO whose employment was terminated in May 2015, (ii) Mr. Contesse and the Company’s then-current CEO, Patricio de Solminihac, and CFO (now CEO), Ricardo Ramos, in their capacities as the Company’s tax representatives and (iii) five then-current and former members of the Company’s Board of Directors. All the claims against Messrs. de Solminihac and Ramos were subsequently dismissed. The lawsuits against Mr. Contesse continue and the five Board members are appealing the fines of approximately US$36,000 imposed on each of them.

On October 14, 2015, two class action complaints then pending against the Company, our former CEO and then-current CEO and CFO, alleging violations of the U.S. securities laws in connection with the subject matter of the investigations described above, were consolidated into a single action in the United States District Court for the Southern District of New York. On November 13, 2015, our former CEO and then-current CEO and CFO were voluntarily dismissed from the case without prejudice. On January 15, 2016, the lead plaintiff filed a consolidated class action complaint exclusively against the Company. On January 10, 2018, the lead plaintiff filed a motion to certify a class consisting of all persons who purchased SQM American Depositary Shares (“ADS”) between June 30, 2010 and March 18, 2015, and such motion remains pending before the court.

During 2015, the ad-hoc committee of the Board of Directors (the “ad-hoc Committee”) established in February 2015 to conduct an internal investigation into the matters that were the subject of the SII and Chilean Public Prosecutor investigation also conducted an investigation into whether the Company faced possible liability under the Foreign Corrupt Practices Act (“FCPA”). The ad-hoc Committee engaged its own separate counsel, Shearman & Sterling LLP, which presented a report to the Board of Directors on December 15, 2015.

Following the presentation by the ad-hoc Committee of its findings to the Board of Directors, the Company voluntarily shared the findings of the ad-hoc Committee investigation with authorities in Chile and the U.S. (including the U.S. Securities and Exchange Commission (“SEC”) and the U.S. Department of Justice (“DOJ”)).

On January 13, 2017, the Company and the DOJ reached agreement on the terms of a Deferred Prosecution Agreement (“DPA”) that would resolve the DOJ’s inquiry, based on alleged violations of the books and records and internal controls provisions of the Foreign Corrupt Practices Act. Among other terms, the DPA called for the Company to pay a monetary penalty of US$15,487,500, and engage a compliance monitor for a term of two (2) years. Upon successful completion of the three (3) year term of the DPA, all charges against the Company will be dismissed. On the same date, the SEC agreed to resolve its inquiry through an administrative cease and desist order, arising out of the alleged violations of the same accounting provisions of the FCPA. Among other terms, the SEC order called for the Company to pay an additional monetary penalty of US$15 million.

In the event that the applicable regulatory authorities believe that the terms of the DPA or the deferred prosecution agreement with the Chilean Public Prosecutor are not complied with, it is possible that such regulatory authorities may reinstate the suspended proceedings against us and may bring further action against us, including in the form of additional inquiries or legal proceedings. Responding to our regulators’ inquiries and any future civil, criminal or regulatory inquiries or proceedings diverts our



management’s attention from day-to-day operations. Additionally, expenses that may arise from responding to such inquiries or proceedings, our review of responsive materials, any related litigation or other associated activities may continue to be significant. Current and former employees, officers and directors may seek indemnification, advancement or reimbursement of expenses from us, including attorneys’ fees, with respect to the current inquiry or future proceedings related to this matter. The occurrence of any of the foregoing or adverse determination in litigation or other proceedings or similar actions could materially and adversely affect our business, financial condition, cash flows, results of operations and the prices of our securities.

Our mineral exploitation rights under the Lease Agreement and the Project Agreement relating to the Salar de Atacama concession, upon which our business is substantially dependent, will expire in December 2030. If we are not able to extend or renew these rights beyond 2030, it could have a material adverse effect on our business, financial condition and results of operations

Our subsidiary SQM Salar S.A. (“SQM Salar”), as leaseholder, holds exclusive and temporary rights to exploit mineral resources in the Salar de Atacama in northern Chile. These rights are owned by Corfo, a Chilean government entity, and leased to SQM Salar pursuant to (i) a 1993 lease agreement over mining exploitation concessions between SQM Salar and Corfo (the “Lease Agreement”), and (ii) the Salar de Atacama project agreement between Corfo and SQM Salar (the “Project Agreement”). The Lease Agreement provides for SQM Salar to (i) make quarterly lease payments to Corfo based on product sales from leased mining properties and annual contributions to research and development, to local communities, to the Antofagasta Regional Government and to the municipalities of San Pedro de Atacama, María Elena and Antofagasta, (ii) maintain Corfo’s rights over the mining exploitation concessions and (iii) make annual payments to the Chilean government for such concession rights. The Lease Agreement expires on December 31, 2030.

Our business is substantially dependent on the exploitation rights under the Lease Agreement and the Project Agreement, since all of our products originating from the Salar de Atacama are derived from our extraction operations under the Lease Agreement. For the year ended December 31, 2019, revenues related to products originating from the Salar de Atacama represented 37%, of our consolidated revenues, consisting of revenues from our potassium business line and our lithium and derivatives business line for the period. As of December 31, 2019, only 11 years remain on the term of the Lease Agreement and we had extracted approximately 25% of the total permitted accumulated extraction and sales limit of lithium under the lithium extraction and sales limits.

Although we expect to begin the process of discussing the extension or renewal of the mineral exploitation rights in the Salar de Atacama under the Lease Agreement and Project Agreement with Corfo well in advance of the December 2030 expiration date, we cannot assure you that we will successfully reach an agreement with Corfo to extend or renew our mineral exploitation rights beyond 2030. Any negotiation with Corfo for an extension or renewal could involve renegotiation of any or all of the terms and conditions of the Lease Agreement and Project Agreement, including, among other things, the lithium and potassium extraction and sales limits, the lease payment rates and calculations, or other payments to Corfo.

In the event that we are not able to extend or renew the Lease Agreement beyond the current expiration date of the Lease Agreement in 2030, we would be unable to continue extraction of lithium and potassium under the Lease Agreement, which could have a material adverse effect on our business, financial condition and results of operations.

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



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

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

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

We sell our products in approximately 110 countries around the world. In 2019, approximately 39% of our sales were made in emerging market countries: 8% in Latin America (excluding Chile); 6% in Africa and the Middle East (excluding Israel); 10% in Chile and 15% in Asia and Oceania (excluding Australia, Japan, New Zealand, South Korea and Singapore). In Note 26.1 to our consolidated financial statements, we reported revenues from Chile, Latin America and the Caribbean and Asia and others of US$1.1 billion. We expect to expand our sales in these and other emerging markets in the future. In addition, we may carry out acquisitions or joint ventures in jurisdictions in which we currently do not operate, relating to any of our businesses or to new businesses in which we believe we may have sustainable competitive advantages. The results of our operations and our prospects in other countries in which we establish operations will depend, in part, on the general level of political stability and economic activity and policies in those countries. Future developments in the political systems or economies of these countries or the implementation of future governmental policies in those countries, including the imposition of withholding and other taxes, restrictions on the payment of dividends or repatriation of capital, the imposition of import duties or other restrictions, the imposition of new environmental regulations or price controls or changes in relevant laws or regulations, could have a material adverse effect on our business, financial condition and results of operations in those countries.

## Our inventory levels may increase for economic or operational reasons

In general, economic conditions or operational factors can affect our inventory levels. Higher inventories carry a financial risk due to increased need for cash to fund working capital and could imply an increased risk of loss of product. At the same time, lower levels of inventory can hinder the distribution network and process, thus impacting sales volumes. There can be no assurance that inventory levels will remain stable. These factors could have a material adverse effect on our business, financial condition and results of operations.

Our measures to minimize our exposure to bad debt may not be effective and a significant increase in our accounts receivable coupled with the financial condition of customers may result in losses that could have a material adverse effect on our business, financial condition and results of operations

Potentially negative effects of global economic conditions on the financial condition of our customers may include the extension of the payment terms of our accounts receivable and may increase our exposure to bad debt. While we have implemented certain safeguards, such as using credit insurance, letters of credit and prepayment for a portion of sales, to minimize the risk, we cannot assure you that such



safeguards will be effective and a significant increase in our accounts receivable coupled with the financial condition of customers may result in losses that could have a material adverse effect on our business, financial condition and results of operations.

New production of iodine, potassium nitrate or lithium from current or new competitors in the markets in which we operate could adversely affect prices

In recent years, new and existing competitors have increased the supply of iodine, potassium nitrate and lithium, which has affected prices for those products. Further production increases could negatively impact prices. There is limited information on the status of new iodine, potassium nitrate or lithium production capacity expansion projects being developed by current and potential competitors and, as such, we cannot make accurate projections regarding the capacities of possible new entrants into the market and the dates on which they could become operational. If these potential projects are completed in the short term, they could adversely affect market prices and our market share, which, in turn, could have a material adverse effect on our business, financial condition and results of operations.

## We have a capital expenditure program that is subject to significant risks and uncertainties

Our business is capital intensive. Specifically, the exploration and exploitation of reserves, mining and processing costs, the maintenance of machinery and equipment and compliance with applicable laws and regulations require substantial capital expenditures. We must continue to invest capital to maintain or to increase our exploitation levels and the amount of finished products we produce.

Mining industry development projects typically require a number of years and significant expenditures before production can begin. Such projects could experience unexpected problems and delays during development, construction and start-up.

Our decision to develop a project typically is based on the results of feasibility studies, which estimate the anticipated economic returns of a project. The actual project profitability or economic feasibility may differ from such estimates as a result of any of the following factors, among others: changes in tonnage, grades and metallurgical characteristics of ore or other raw materials to be mined and processed; estimated future prices of the relevant products; changes in customer demand; higher construction and infrastructure costs; the quality of the data on which engineering assumptions were made; higher production costs; adverse geotechnical conditions; availability of adequate labor force; availability and cost of water and energy; availability and cost of transportation; fluctuations in inflation and currency exchange rates; availability and terms of financing; and potential delays relating to social and community issues.

In addition, we require environmental permits for our new projects. Obtaining permits in certain cases may cause significant delays in the execution and implementation of new projects and, consequently, may require us to reassess the related risks and economic incentives. We cannot assure you that we will be able to maintain our production levels or generate sufficient cash flow, or that we will have access to sufficient investments, loans or other financing alternatives, to continue our activities at or above present levels, or that we will be able to implement our projects or receive the necessary permits required for them in time. Any or all of these factors may have a material adverse effect on our business, financial condition and results of operations.

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

We rely on certain raw materials and various energy sources (diesel, electricity, liquefied natural gas, fuel oil and others) to manufacture our products. Purchases of energy and raw materials we do not produce constitute an important part of our cost of sales, approximately 16% in 2019. In addition, we may not be able to obtain energy at any price if supplies are curtailed or otherwise become unavailable. To the extent



we are unable to pass on increases in the prices of energy and raw materials to our customers or we are unable to obtain energy, our business, financial condition and results of operations could be materially adversely affected.

Our reserves estimates are internally prepared and not subject to review by external geologists or an external auditing firm and could be subject to significant changes, which may have a material adverse effect on our business, financial condition and results of operations

Our caliche ore mining reserves estimates and our Salar de Atacama brine mining reserve estimates are prepared by our own geologists and hydrogeologists and are not subject to review by external geologists or an external auditing firm. Estimation methods involve numerous uncertainties as to the quantity and quality of the reserves, and reserve estimates could change upwards or downwards. A downward change in the quantity and/or quality of our reserves could affect future volumes and costs of production and therefore have a material adverse effect on our business, financial condition and results of operations.

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

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

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

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

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

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

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

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

Our products, particularly iodine, lithium and their derivatives, are preferred raw materials for certain industrial applications, such as rechargeable batteries and liquid-crystal displays (LCDs). Changes in technology, the development of substitute products or other developments could adversely affect demand for these and other products which we produce. In addition, other alternatives to our products may become



more economically attractive as global commodity prices shift. Any of these events could have a material adverse effect on our business, financial condition and results of operations.

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

Over 91% of our employees are employed in Chile, of which approximately 66% were represented by 21 labor unions as of December 31, 2019. As in past years, we renegotiated four collective bargaining agreements with four unions by December 31, 2019, one year before the expiration of the agreements other than the collective bargaining agreement with Soquimich Comercial S.A., which was completed one month before its expiration date. The new collective bargaining agreements were renegotiated for a three-year period from the date they were signed. We are exposed to labor strikes and illegal work stoppages that could impact our production levels. If a strike or illegal work stoppage occurs and continues for a sustained period of time, we could be faced with increased costs and even disruption in our product flow that could have a material adverse effect on our business, financial condition and results of operations.

Chilean Law No. 20,123, known as the Subcontracting Law, provides that when a serious workplace accident occurs, the company in charge of the workplace must halt work at the site where the accident took place until authorities from either the National Geology and Mining Service (Servicio Nacional de Geología y Minería or “Sernageomin”), the Labor Board (Dirección del Trabajo or “Labor Board”), or the National Health Service (Servicio Nacional de Salud), inspect the site and prescribe the measures such company must take to minimize the risk of similar accidents taking place in the future. Work may not be resumed until the applicable company has taken the prescribed measures, and the period of time before work may be resumed may last for a number of hours, days, or longer. The effects of this law could have a material adverse effect on our business, financial condition and results of operations.

On September 8, 2016, Chilean Law No. 20,940 was published and modified the Labor Code by introducing, among other things, changes to the formation of trade unions, the election of inter-company union delegates, the presence of women on union boards, anti-union practices and related sanctions, and collective negotiations. Due to these changes to the labor regulations, we may face an increase in our expenses that may have a significant adverse effect on our business, financial condition, and results of operations.

## Lawsuits and arbitrations could adversely impact us

We are party to a range of lawsuits and arbitrations involving different matters as described in Note 22.1 to our consolidated financial statements. Although we intend to defend our positions vigorously, our defense of these actions may not be successful and responding to such lawsuits and arbitrations diverts our management’s attention from day-to-day operations. Adverse judgments or settlements in these lawsuits may have a material adverse effect on our business, financial condition and results of operations. In addition, our strategy of being a world leader includes entering into commercial and production alliances, joint ventures and acquisitions to improve our global competitive position. As these operations increase in complexity and are carried out in different jurisdictions, we may be subject to legal proceedings that, if settled against us, could have a material adverse effect on our business, financial condition and results of operations.

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

We operate in multiple jurisdictions with complex regulatory environments that are subject to different interpretations by companies and respective governmental authorities. These jurisdictions may have different tax codes, environmental regulations, labor codes and legal framework, which adds complexity to our compliance with these regulations. Any failure to comply with such regulations could have a material adverse effect on our business, financial condition and results of operations.



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

Our operations in Chile are subject to national and local regulations relating to environmental protection. In accordance with such regulations, we are required to conduct environmental impact studies or statements before we conduct any new projects or activities or significant modifications of existing projects that could impact the environment or the health of people in the surrounding areas. We are also required to obtain an environmental license for certain projects and activities. The Environmental Evaluation Service (Servicio de Evaluación Ambiental) evaluates environmental impact studies submitted for its approval. The public, government agencies or local authorities may review and challenge projects that may adversely affect the environment, either before these projects are executed or once they are operating, if they fail to comply with applicable regulations. In order to ensure compliance with environmental regulations, Chilean authorities may impose fines up to approximately US$9 million per infraction, revoke environmental permits or temporarily or permanently close facilities, among other enforcement measures.

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

We regularly monitor the impact of our operations on the environment and on the health of people in the surrounding areas and have, from time to time, made modifications to our facilities to minimize any adverse impact. Future developments in the creation or implementation of environmental requirements or their interpretation could result in substantially increased capital, operation or compliance costs or otherwise adversely affect our business, financial condition and results of operations.

The success of our current investments at the Salar de Atacama and Nueva Victoria is dependent on the behavior of the ecosystem variables being monitored over time. If the behavior of these variables in future years does not meet environmental requirements, our operation may be subject to important restrictions by the authorities on the maximum allowable amounts of brine and water extraction. For example, on December 13, 2017, the First Environmental Court of Antofagasta ordered the temporary and partial closure of certain water extraction wells located in the Salar de Llamara. These wells allow us to extract approximately 124 liters per second of water, almost 15% of the water used in our operations in the First Region of Chile for iodine and nitrate production. In October 2018, the First Environmental Court of Antofagasta accepted our claim, and dismissed the restrictions without prejudice. It is possible that third parties could seek to reinstate these restrictions in the future. In addition, on December 26, 2019, the First Environmental Court of Antofagasta ruled that the environmental compliance plan presented by SQM Salar S.A. with respect to the Salar de Atacama and approved by Chilean Environmental Authority (Superintendencia del Medio Ambiente) or SMA, in January 2019 did not comply with certain proposed measures of the completeness and efficiency requirements of the Chilean environmental legislation. In January 2020, the SMA announced that it would appeal the environmental court’s ruling. We believe that the environmental compliance plan, which was evaluated by the relevant regulatory authorities, safeguards the protection of the environment and are evaluating all courses of action available under applicable law with respect to this ruling.

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



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

## Our water supply could be affected by geological changes or climate change

Our access to water may be impacted by changes in geology, climate change or other natural factors, such as wells drying up or reductions in the amount of water available in the wells or rivers from which we obtain water, that we cannot control. The use of seawater for future or current operations could increase our operating costs. Any such change may have a material adverse effect on our business, financial condition and results of operations.

## Any loss of key personnel may materially and adversely affect our business

Our success depends in large part on the skills, experience and efforts of our senior management team and other key personnel. The loss of the services of key members of our senior management or employees with critical skills could have a negative effect on our business, financial condition and results of operations. If we are not able to attract or retain highly skilled, talented and qualified senior managers or other key personnel, our ability to fully implement our business objectives may be materially and adversely affected.

A significant percentage of our shares are held by two principal shareholder groups who may have interests that are different from that of other shareholders and of each other. Any change in such principal shareholder groups may result in a change of control of the Company or of its Board of Directors or its management, which may have a material adverse effect on our business, financial condition and results of operations

As of December 31, 2019, two principal shareholder groups held in the aggregate 57.86% of our total outstanding shares, including a majority of our Series A common shares, and have the power to elect six of our eight directors. The interests of the two principal shareholder groups may in some cases differ from those of other shareholders and of each other.

One principal shareholder group is Sociedad de Inversiones Pampa Calichera S.A. and its related companies, Inversiones Global Mining Chile Limitada and Potasios de Chile S.A. (together, the “Pampa Group”), which currently owns 32% of the total outstanding shares of SQM. As reported to the CMF by Inversiones TLC SpA, a subsidiary of Tianqi Lithium Corporation (“Tianqi”), on December 5, 2018, Inversiones TLC SpA currently owns 25.86% of the total shares of SQM.

Until November 30, 2018, the CMF considered the Pampa Group the controller of SQM. On this date, the CMF determined that in accordance with the distribution of the shares of SQM, “the Pampa Group does not exert decisive power over the management of the Company, and is therefore not considered a controlling shareholder”. The CMF could change its decision in the future if circumstances change.

The divestiture by the Pampa Group or Tianqi, or potential changes in the circumstances that have led to the determination of the CMF related to the controller status of the shareholders of the Company, or a combination thereof, may have a material adverse effect on our business, financial condition and results of operations.

Tianqi is a significant shareholder and a competitor of the Company, which could result in risks to free competition



Tianqi is a competitor in the lithium business, and as a result of the number of SQM shares that it owns, it has the right to choose up to three Board members. Under Chilean law, we are restricted in our ability to decline to provide information about us, which may include competitively sensitive information, to a director of our company. On August 27, 2018, Tianqi and the Chilean antitrust regulator, the Chilean National Economic Prosecutor's Office (Fiscalía Nacional Económica), or FNE, entered into an extrajudicial agreement, under which certain restrictive measures were implemented in order to (i) maintain the competitive conditions of the lithium market, (ii) mitigate the risks described in the agreement and (iii) limit Tianqi's access to certain information of the Company and its subsidiaries, which is defined as "sensitive information" under the agreement.

During the approval process of the extrajudicial agreement before the FNE, we expressed our concerns regarding the measures contained in the extrajudicial agreement since, in the Company’s opinion, the measures (i) could not effectively resolve the risks that Tianqi and the FNE have sought to mitigate, (ii) are not sufficient to avoid access to our “sensitive information” that, in the possession of a competitor, could harm us and the proper functioning of the market and (iii) could contradict the Chilean Corporations Act.

The presence of a shareholder which is at the same time a competitor of ours and the right of this competitor to choose Board members could generate risks to free competition and/or increase the risks of an investigation of free competition against us, whether in Chile or in other countries, all of which could have a material adverse effect on our business, financial condition and results of operations.

Our information technology systems may be vulnerable to disruption which could place our systems at risk from data loss, operational failure, or compromise of confidential information

We rely on various computer and information technology systems, and on third party developers and contractors, in connection with our operations, including two networks that link our principal subsidiaries to our operating and administrative facilities in Chile and other parts of the world and ERP software systems, which are used mainly for accounting, monitoring of supplies and inventories, billing, quality control, research activities, and production process and maintenance control. In addition, we use cloud technologies, which allows us to support new business processes and respond quickly and at low cost to changing conditions in our business and of the markets. Our information technology systems are susceptible to disruption, damage or failure from a variety of sources, including errors by employees or contractors, computer viruses, cyber-attacks, misappropriation of data by outside parties, and various other threats. We have taken certain measures to identify and mitigate these risks, including conducting a cybersecurity review and initiating process automation and digitalization projects at various sites with the object of reducing operational risk and improving security and operational efficiency, which also includes modernization of existing information technology infrastructure and communications systems. However, we cannot guarantee that due to the increasing sophistication of cyber-attacks our systems will not be compromised and because we do not maintain specialized cybersecurity insurance, our insurance coverage for protection against cybersecurity risk may not be sufficient. Cybersecurity breaches could result in losses of assets or production, operational delays, equipment failure, inaccurate recordkeeping, or disclosure of confidential information, any of which could result in business interruption, reputational damage, lost revenue, litigation, penalties or additional expenses and could have a material adverse effect on our business, financial condition and results of operations.

## Recent international trade tensions could have a negative effect on our financial performance

Economic conditions in China, an important market for the Company, are sensitive to global economic conditions. The global financial markets have experienced significant disruptions in the past, including the recent international trade disputes and tariff actions announced by the United States, China and certain other countries. The U.S. government has imposed significant tariffs on Chinese goods, and Chinese government has, in turn, imposed tariffs on certain goods manufactured in the United States. There is no



assurance that the list of goods impacted by additional tariffs will not be expanded or the tariffs will not be increased materially. We are unable to predict how China or U.S. government policy, in particular, the outbreak of a trade war between China and the United States and additional tariffs on bilateral imports, may continue to impact global economic conditions. If the list of goods is further expanded or the tariff is further increased, global economic conditions of both countries could be impacted, and growth in demand for lithium or other commodities could decrease, which may have a material adverse effect on our business, financial condition and results of operations.

Outbreaks of communicable infections or diseases, or other public health pandemics, such as the recent outbreak of the novel “coronavirus” (COVID-19) currently being experienced around the world, have impacted and may further impact the markets in which we, our customers and our suppliers operate or market and sell products and could have a material adverse effect on our business, financial condition and results of operations.

Disease outbreaks and other public health conditions, such as the global outbreak of the coronavirus currently being experienced, in markets in which we, our customers and our suppliers operate, could have a significant negative impact on our revenues, profitability and business. Due to the coronavirus outbreak, there has been a substantial curtailment and disruption of business activities around the world. These curtailments and disruptions include: manufacturing and other work stoppages, factory and other business closings, slowdowns or delays; restrictions and limitations placed on workers and factories, including quarantines and other limitations on the ability to travel and return to work; shortages and delays in production or shipment of products or raw materials; and border closures. We have seen some impacts related to the shipment of products in and out of various countries and regions, which could further negatively impact our ability to ship products to customers and receive supplies from suppliers. We have already seen decreased demand in our businesses, especially our lithium business. Furthermore, it could disrupt the supply chain for materials we need to implement the planned expansions of our production capacity.

While the coronavirus outbreak is still developing globally, international financial markets have begun to reflect the uncertainty associated with the slowdown of the global economy and the potential impact if businesses, workers, customers and others are prevented or restricted from conducting business activities due to quarantines, business closures or other restrictions imposed by businesses or governmental authorities in response to the coronavirus outbreak. This could result in an economic downturn that could affect demand for the products of our customers by their end-users and, in turn, demand from our customers for our products.

## Risks Relating to Financial Markets

## Currency fluctuations may have a negative effect on our financial performance

We transact a significant portion of our business in U.S. dollars, and the U.S. dollar is the currency of the primary economic environment in which we operate. In addition, the U.S. dollar is our functional currency for financial statement reporting purposes. A significant portion of our costs, however, is related to the Chilean peso. Therefore, an increase or decrease in the exchange rate between the Chilean peso and the U.S. dollar would affect our costs of production. The Chilean peso has been subject to large devaluations and revaluations in the past and may be subject to significant fluctuations in the future. Due to the riots and political unrest that affected Chile in October and November 2019, the Chilean peso exchange rate reached a historic level of Ch$828.25 per U.S. dollar on November 28, 2019. As of December 31, 2019, the Chilean peso exchange rate was Ch$748.74 per U.S. dollar, while as of December 31, 2018 the Chilean peso exchange rate was Ch$694.77 per U.S. dollar. The Chilean peso therefore depreciated against the U.S. dollar by 7.8% in 2019.



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

We may be subject to risks associated with the discontinuation, reform or replacement of benchmark indices.

Interest rate, foreign exchange rate and other types of indices which are deemed to be “benchmarks” are the subject of increased regulatory scrutiny and may be discontinued, reformed or replaced. For example, in 2017, the U.K. Financial Conduct Authority announced that it will no longer persuade or compel banks to submit rates for the calculation of the London interbank offered rate (“LIBOR”) benchmark after 2021. This announcement indicates that the continuation of LIBOR on the current basis cannot and will not be guaranteed after 2021, and it appears likely that LIBOR will be discontinued or modified by 2021. This and other reforms may cause benchmarks to be different than they have been in the past, or to disappear entirely, or have other consequences which cannot be fully anticipated which introduces a number of risks for our business. These risks include (i) legal risks arising from potential changes required to document new and existing transactions; (ii) financial risks arising from any changes in the valuation of financial instruments linked to benchmark rates; (iii) pricing risks arising from how changes to benchmark indices could impact pricing mechanisms on some instruments; (iv) operational risks arising from the potential requirement to adapt IT systems, trade reporting infrastructure and operational processes; and (v) conduct risks arising from the potential impact of communication with customers and engagement during the transition period. The replacement benchmarks, and the timing of and mechanisms for implementation have not yet been confirmed by central banks. Although as of December 31, 2019 we had approximately US$70 million short- and long-term debt that use a LIBOR benchmark, it is not currently possible to determine whether, or to what extent, any such changes would affect us. However, the discontinuation or reformation of existing benchmark rates or the implementation of alternative benchmark rates may have a material adverse effect on our business, financial condition and results of operations.

## Risks Relating to Chile

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

Our business, financial condition and results of operations could be affected by changes in policies of the Chilean government, other political developments in or affecting Chile, legal changes in the standards or administrative practices of Chilean authorities or the interpretation of such standards and practices, over which we have no control. The Chilean government has modified, and has the ability to modify, monetary, fiscal, tax, social and other policies in order to influence the Chilean economy or social conditions. We have no control over government policies and cannot predict how those policies or government intervention will affect the Chilean economy or social conditions, or, directly and indirectly, our business, financial condition and results of operations. Changes in policies involving exploitation of natural resources, taxation and other matters related to our industry may adversely affect our business, financial condition and results of operations.

We are exposed to economic and political volatility and civil unrest in Chile. Changes in social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in Chile, as well as crises and political uncertainties in Chile, could adversely affect economic growth in Chile. In October and November 2019, Chile experienced riots and widespread mass demonstrations in Santiago and other major cities in Chile, triggered by an increase in public transportation fares in the city of Santiago, which involved violence and significant property damage and caused commercial disruptions throughout the country. As a result, on October 18, 2019 the Chilean government declared a 15-day period state of emergency and imposed a nighttime curfew in the greater



Santiago region and other cities. The state of emergency has since been lifted and the Chilean government has introduced several social reforms, including (i) an immediate 20% increase in government-subsidized pensions; (ii) new insurance programs to cover catastrophic illnesses and medication; (iii) a guaranteed minimum monthly income for wage earners of Ch$350,000 (approximately US$460.95), with the difference between such guaranteed minimum monthly income and the minimum monthly wage (Ch$301,000) to be borne by the Chilean government; (iv) the reversal of a previously announced 9.2% price increase in energy tariffs; and (v) a 40% income tax bracket for individuals earning over Ch$15.0 million (approximately US$19,755.04) a month, increased from 35%. In addition, President Piñera announced a pay cut for members of the Chilean Congress and the highest-paid civil servants and replaced eight ministers of his government. On November 15, 2019, representatives of Chile’s leading political parties agreed to hold a referendum in April 2020, allowing Chileans to vote on whether to replace the Chilean Constitution. This referendum was delayed from April 2020 to October 2020 in an effort to reduce the spread of the coronavirus. Demonstrations continue in Chile with respect to a number of social and economic concerns, including the cost of healthcare and education, pensions and income inequality. We cannot give any assurance that these reforms and proposals will resolve the protests or whether the protests will continue or worsen. Although our operations have not been materially affected to date, the continuation of mass protests or civil unrest in Chile and government responses to them may have an adverse effect on general economic conditions in Chile, our business, financial condition and results of operations.

Changes to the Chilean Constitution could impact a wide range of rights, including mining rights, water rights and property rights generally, and could affect our business, financial condition and results of operations

In response to the riots and mass demonstrations that occurred during October and November 2019, the Chilean government has approved calling a national referendum in April 2020 to decide whether to create a new Chilean Constitution, and if so, whether members of the Chilean Congress along with citizens elected for that task (“Elected Citizens”) or a special constituent assembly comprised entirely of Elected Citizens would draft the new Chilean Constitution. The timetable contemplates that if it is decided to create a new Chilean Constitution, all Elected Citizens will be elected in October 2020 and that the draft Chilean Constitution will be delivered by the drafters in September or December 2021 (depending on whether an extension is requested) for approval by the Chilean citizens in November 2021 or March 2022 (depending on whether an extension is requested). It is expected that the final draft of the new Chilean Constitution will be submitted to a public referendum for approval. Since then, the referendum timetable has been delayed from April 2020 to October 2020, in an effort to reduce the spread of the coronavirus. The existing Chilean Constitution has been in place since 1980 and any new Chilean Constitution could change the political situation of Chile, potentially changing a wide range of rights, including mining rights, water rights and property rights generally, which could affect the Chilean economy and the business outlook for the country generally and our business, financial condition and results of operations in particular.

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

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

Changes in mining or port concessions could affect our business, financial condition and results of operations

We conduct our mining operations, including brine extraction, under exploitation and exploration concessions granted in accordance with provisions of the Chilean Constitution and related laws and



statutes. Our exploitation concessions essentially grant a perpetual right (with the exception of the rights granted to SQM Salar with respect to the Salar de Atacama concessions under the Lease Agreement described above, which expires in 2030) to conduct mining operations in the areas covered by the concessions, provided that we pay annual concession fees. Our exploration concessions permit us to explore for mineral resources on the land covered thereby for a specified period of time and to subsequently request a corresponding exploitation concession. Any changes to the Chilean Constitution with respect to the exploitation and exploration of natural resources and concessions granted as a result of the proposed Constitutional referendum could materially adversely affect our existing exploitation and exploration concessions or our ability to obtain future concessions and could have a material adverse effect on our business, financial condition and results of operations.

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

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

Changes in water rights laws and other regulations could affect our business, financial condition and results of operations

We hold water use rights that are key to our operations. These rights were obtained from the Chilean Water Authority (Dirección General de Aguas) for supply of water from rivers and wells near our production facilities, which we believe are sufficient to meet current operating requirements. However, the Chilean Water Rights Code (Código de Aguas or the “Water Code”) is subject to changes, which could have a material adverse impact on our business, financial condition and results of operations. For example, a series of bills are currently being discussed by the Chilean National Congress that seek to desalinate seawater for use in mining production processes, amend the Mining Code for water use in mining operations, amend the Chilean Constitution on water and introduce changes to the regulatory framework governing the terms of inspection and sanction of water. As a result, the amount of water that we can actually use under our existing rights may be reduced or the cost of such use could increase. In addition, any changes to the Chilean Constitution with respect to water rights as a result of the proposed Constitutional referendum could restrict our access to water required for our production operations and materially adversely affect our existing operations or our ability to expand our operations in the future. These and potential future changes to the Water Code, the Chilean Constitution or other relevant regulations could have a material adverse effect on our business, financial condition and results of operations.

The Chilean National Congress is considering a draft bill that declares lithium mining to be in the national interest, which if passed in its current form, could enable the expropriation of our lithium assets

The Chilean National Congress is currently processing a bill, bulletin 10,638-08, which “Declares the exploitation and commercialization of lithium and Sociedad Química y Minera de Chile S.A. to be of national interest.” The purpose of this bill is to enable the potential expropriation of our assets, or our lithium operations in general. The bill is subject to further discussion in the Chilean National Congress, which includes several possible changes to its current wording. We cannot guarantee that the bill will not eventually be approved by the Chilean National Congress, nor that its final wording will not refer to us or our lithium operations. If the bill is approved as currently drafted, it could have a material adverse effect on our business, financial condition and results of operations.

The Chilean government could levy additional taxes on mining companies operating in Chile



In Chile, there is a royalty tax that is applied to mining activities developed in the country. The Chilean National Congress is currently processing a bill, bulletin 12,093-08, which proposes to institute a royalty fee of 3% on the value of extracted minerals. The bill is subject to further discussion in the Chilean National Congress, which includes several possible changes to its current wording. We cannot guarantee that the bill will not eventually be approved by the Chilean National Congress. If the bill is approved as currently drafted, it could have a material adverse effect on our business, financial condition and results of operations.

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

Chile, a member of the International Labor Organization (“ILO”), has ratified the ILO’s Convention 169 (the “Indigenous Rights Convention”) concerning indigenous and tribal people. The Indigenous Rights Convention established several rights for indigenous people and communities. Among other rights, the Indigenous Rights Convention states that (i) indigenous groups should be notified and consulted prior to the development of any project on land deemed indigenous, although veto rights are not mentioned, and (ii) indigenous groups have, to the extent possible, a stake in benefits resulting from the exploitation of natural resources in indigenous land. The extent of these benefits has not been defined by the Chilean government. The Chilean government has addressed item (i) above through Supreme Decree No. 66, issued by the Social Development Ministry. This decree requires government entities to consult indigenous groups that may be directly affected by the adoption of legislative or administrative measures, and it also defines criteria for the projects or activities that must be reviewed through the environmental evaluation system that also require such consultation. To the extent that the new rights outlined in the Indigenous Rights Convention become laws or regulations in Chile, judicial interpretations of the convention of those laws or regulations could affect the development of our investment projects in lands that have been defined as indigenous, which could have a material adverse effect on our business, financial condition and results of operations. The Chilean Supreme Court has consistently held that consultation processes must be carried out in the manner prescribed by Indigenous Rights Convention.

The consultation process may cause delays in obtaining regulatory approvals, including environmental permits, as well as public opposition by local and/or international political, environmental and ethnic groups, particularly in environmentally sensitive areas or in areas inhabited by indigenous populations. Furthermore, the omission of the consultation process when required by law may result in the revocation or annulment of regulatory approvals, including environmental permits already granted.

Consequently, operating projects may be affected since the omission of the consultation process, when required by law, could lead to public law annulment actions pursuing the annulment of the environmental permits granted.

However, this risk frequently arises during the environmental assessment phase when the environmental permits are to be obtained. In such scenario, affected parties may take several legal actions to declare null or void the environmental permits that omitted the consultation process, and in some cases courts have overturned environmental approvals in which consultation was not made as prescribed in the Indigenous Rights Convention.

If the Indigenous Rights Convention affects our development plans, it could have a material adverse effect on our business, financial condition and results of operations.

We are subject to Chilean and international anti-corruption, anti-bribery, anti-money laundering and international trade laws. Failure to comply with these laws could adversely impact our business, financial condition and results of operations



We are required to be in compliance with all applicable laws and regulations in Chile and internationally with respect to anti-corruption, anti-money laundering, receipt of stolen property, sanctions and other regulatory matters, including the FCPA. Although we and our subsidiaries maintain policies and processes intended to comply with these laws, we cannot ensure that these compliance policies and processes will prevent intentional, reckless or negligent acts committed by our officers or employees.

If we or our subsidiaries fail to comply with any applicable anti-corruption, anti-bribery, receipt of stolen property or anti-money laundering laws, we and our officers and employees may be subject to criminal, administrative or civil penalties and other remedial measures, which could have material adverse effects on our and our subsidiaries' business, financial condition and results of operations. Any investigation of potential violations of anti-corruption, anti-bribery or anti-money laundering laws by governmental authorities in Chile or other jurisdictions could result in an inability to prepare our consolidated financial statements in a timely manner. This could adversely impact our reputation, ability to access the financial markets and ability to obtain contracts, assignments, permits and other government authorizations necessary to participate in our and our subsidiaries' industry, which, in turn, could have adverse effects on our and our subsidiaries' business, financial condition and results of operations.

Chile has different corporate disclosure and accounting standards than those you may be familiar with in the United States

Accounting, financial reporting and securities disclosure requirements in Chile differ in certain significant respects from those required in the United States. Accordingly, the information about us available to you will not be the same as the information available to holders of securities issued by a U.S. company. In addition, although Chilean law imposes restrictions on insider trading and price manipulation, applicable Chilean laws are different from those in the United States, and the Chilean securities markets are not as highly regulated and supervised as the U.S. securities markets.

## Chile is located in a seismically active region

Chile is prone to earthquakes because it is located along major fault lines. The most recent major earthquakes in Chile, which occurred in January 2019 and April 2017 in the Coquimbo and Valparaíso regions, had a magnitude of 6.7 and 6.9, respectively, on the Richter scale. There were also earthquakes in 2016, 2015, 2014 and 2010 that caused substantial damage to some areas of the country. Chile has also experienced volcanic activity. A major earthquake or a volcanic eruption could have significant negative consequences for our operations and for the general infrastructure, such as roads, rail, and access to goods, in Chile. Although we maintain industry standard insurance policies that include earthquake coverage, we cannot assure you that a future seismic or volcanic event will not have a material adverse effect on our business, financial condition and results of operations.

## Risks Relating 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

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

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



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

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

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

## Our share or ADS price may react negatively to future acquisitions and investments

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

## ADS holders may be unable to enforce rights under U.S. Securities Laws

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

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

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

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



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

If we issue preemptive rights, United States holders of ADSs would not be able to exercise their rights unless a registration statement under the Securities Act were effective with respect to such rights and the shares issuable upon exercise of such rights or an exemption from registration were available. We cannot assure holders of ADSs that we will file a registration statement or that an exemption from registration will be available. We may, in our absolute discretion, decide not to prepare and file such a registration statement. If our holders were unable to exercise their preemptive rights because we did not file a registration statement, the ADS depositary would attempt to sell their rights and distribute the net proceeds from the sale to them, after deducting the depositary’s fees and expenses. If the depositary could not sell the rights, they would expire and have no further value and holders of ADSs would not realize any value from them. In either case, ADS holders’ equity interests in us would be diluted in proportion to the increase in our capital stock.

If we were classified as a Passive Foreign Investment Company by the U.S. Internal Revenue Service, there could be adverse consequences for U.S. investors

We believe that we were not classified as a Passive Foreign Investment Company (“PFIC”) for 2019. Characterization as a PFIC could result in adverse U.S. tax consequences to a U.S. investor in our shares or ADSs. For example, if we (or any of our subsidiaries) are a PFIC, our U.S. investors may become subject to increased tax liabilities under U.S. tax laws and regulations and will become subject to burdensome reporting requirements. The determination of whether or not we (or any of our subsidiaries or portfolio companies) are a PFIC is made on an annual basis and will depend on the composition of our (or their) income and assets from time to time.

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

Cash dividends paid by the Company with respect to the shares, including shares represented by ADS, will be subject to a 35% Chilean withholding tax, which is withheld and paid by the Company (the “Withholding Tax”). The effective rate of Withholding Tax imposed on dividends attributed to 2019 earnings of the Company and distributed during the same period was 21.58037%.

Under the shareholder taxation regime, shareholders bear the tax on dividends upon payment, but they will only be permitted to credit against such shareholder taxes a portion of the Chilean corporate tax paid by us on our earnings. Foreign shareholders resident in a jurisdiction with a tax treaty in force with Chile will be credited with 100% of the Chilean corporate tax paid by us against the final taxes at the shareholder level.

Foreign shareholders resident in a non-treaty jurisdiction will be subject to a higher effective tax rate on dividends because only a portion of the Chilean corporate tax paid by us will be credited against the final taxes at the shareholder level. There is a temporary rule in effect since January 1, 2017 which has been extended to December 31, 2026 that provides that treaty jurisdictions for this purpose will include jurisdictions with tax treaties signed with Chile prior to January 1, 2020, even if such treaties are not in force. This is currently the status of the treaty signed between the United States and Chile.

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

## 3) F) DESCRIPTION OF BUSINESS ENVIRONMENT: CAPITAL EXPENDITURE PROGRAM



We regularly review different opportunities to improve our production methods, reduce costs, increase production capacity of existing products and develop new products and markets. Additionally, significant capital expenditures are required every year in order to sustain our production capacity. We are focused on developing new products in response to identified customer demand, as well as new products that can be derived as part of our existing production or other products that could fit our long-term development strategy. Our capital expenditures in Chile have been mainly related to the organic growth and sustainability of our business, including the construction of new facilities and the renovation of plants and equipment. In 2019, we continued the development of the Mt. Holland project and completed the definitive feasibility study. Following the completion of the definitive feasibility study, we decided, together with Wesfarmers, to defer the final investment decision until the first quarter 2021. In 2019, we also expanded our lithium carbonate capacity in Chile, reaching capacity 70,000 metric tons per year.

Our capital expenditures for the years ended December 31, 2019, 2018 and 2016 were as follows:

<table><tr><td>(in millions of U.S. dollars)</td><td>2019</td><td>2018</td><td>2017</td></tr><tr><td>Capital Expenditures</td><td>321.3</td><td>244.7</td><td>142.1</td></tr></table>

During 2019, we had total capital expenditures of US$321.3 million, primarily related to:

- Capacity expansion projects related to the completion of the increase of our lithium carbonate production to 70,000 metric tons per year and the commencement of our lithium carbonate expansion project to reach 120,000 metric tons per year.

- Capacity expansion of lithium hydroxide production from 13,500 metric tons per year to 21,500 metric tons per year in Chile;

- Investments to increase iodine capacity to 14,800 metric tons per year in the Nueva Victoria mine; and

- Capacity expansion and optimization projects related to potassium nitrate production plants II, III and IV in Coya Sur.

During 2018, we had total capital expenditure of US$244.7 million, primarily related to:

- Capacity expansion projects related to increasing lithium carbonate production to 70,000 metric tons per year and lithium hydroxide production to 13,500 metric tons per year in Chile;

• Investments to increase iodine capacity to 14,000 in the Nueva Victoria mine;

- Capacity expansion project related to potassium nitrate production plants III and IV in Coya Sur; and

- General maintenance of all production units and the Port of Tocopilla in order to ensure the fulfillment of production and sales targets.

During 2017, we had total capital expenditures of US$142.1 million, primarily related to:

- Capacity expansion projects related to lithium carbonate and lithium hydroxide production in Chile;

- Investments in mining workshop and operations centers to relocate operations from Nueva Victoria mine to mining sector Tente en el Aire;

- Capacity expansion project related to potassium nitrate production;

- General maintenance of all production units and Tocopilla port in order to ensure the fulfillment of production and sales targets.

The Board of Directors has approved a capital expenditure framework for 2020 of approximately US$450 million focused on the maintenance of our production facilities in order to strengthen our ability to meet our production goals and to increase our production capacity, primarily related to lithium carbonate and



lithium hydroxide capacity expansions and nitrates and iodine capacity in Chile and development of our lithium project in Australia. We expect our installed capacity of lithium carbonate in Chile to reach approximately 120,000 metric tons by the second half of 2021, an increase of 50,000 metric tons compared to our current capacity of 70,000 metric tons. We have decided to complete our previously announced lithium hydroxide expansion of 16,000 metric tons in Chile, with two modules of 8,000 metric tons each, and believe the first stage should be completed in the first half of 2021. We will continue to do studies related to the Mt. Holland lithium project in Australia and expect to make a final investment decision in the beginning of 2021.

We do not expect that our 2020 capital investment program will require external financing. However, we always have the option to access capital markets in order to optimize our financial position.



## 4) OWNERSHIP AND SHARES

## 4) A) OWNERSHIP AND SHARES: OWNERSHIP

## i) OWNERSHIP CONTROL SITUATION

At December 31, 2019, SQM does not have a “controlling group” as such term is defined in Title XV of Chilean Law No. 18,045.

## ii) IDENTIFICATION OF NON-CONTROLLING MAJORITY SHAREHOLDERS

SQM has been informed that, as of December 31, 2019, Mr. Julio Ponce Lerou (ID No. 4.250.719-9) and related persons control 100% of Inversiones SQYA Ltda. (“SQYA”) and 100% of Inversiones SQ Ltda. These two companies control indirectly 32.00% of all shares of SQM (consisting of 71,871,838 Series A shares and 12,341,049 Series B shares), as follows: (i) Inversiones SQ Ltda. controls 0.0258% of Norte Grande S.A. (“Norte Grande”) and SQYA controls 67.59% of Norte Grande, which controls 76.82% of Sociedad de Inversiones Oro Blanco S.A., which controls 88.64% of Sociedad de Inversiones Pampa Calichera S.A. (“Pampa Calichera”), which controls 21.75% of SQM, as of December 31, 2019; (ii) Pampa Calichera controls 99.99% of Inversiones Global Mining Chile Limitada, which controls 3.34% of SQM and (iii) Norte Grande controls 76.34% of Nitratos de Chile S.A., which controls 98.89% of Potasios de Chile S.A., which controls 10.07% of Pampa Calichera and 6.91% of SQM. Thus, Pampa Calichera and its related companies, Inversiones Global Mining Chile Limitada and Potasios de Chile S.A. (together, “Pampa Group”), control 32.00% of SQM.

As reported by Depósito Central de Valores S.A. (“DCV”), which keeps formal records of the shareholders of the Company, as of December 31, 2019, Inversiones TLC SpA, a subsidiary of Tianqi Lithium Corporation (“Tianqi”), is a direct owner of 62,556,568 of SQM’s shares, equivalent to 23.77% of SQM’s total shares. \( ^{1} \) 

As of December 31, 2019, Kowa Company Ltd., Inversiones La Esperanza (Chile) Limitada, Kochi S.A., and Kowa Holding America Inc. (together, “Kowa Group”) are owners of 2.33% of all shares in SQM.

For the breakdown by series of share of the Pampa Group, Tianqi and Kowa Group ownership of shares in SQM, see Section 4) A) iii) Identification of 12 Largest Shareholders.

## iii) IDENTIFICATION OF 12 LARGEST SHAREHOLDERS

As of December 31, 2019, the 12 largest shareholders including both Series A and Series B shares were:

<table><tr><td>Series A + Series B</td><td>Taxpayer ID</td><td>Number of Shares</td><td>% Ownership</td></tr><tr><td>INVERSIONES TLC SPA</td><td>76,902,021-7</td><td>62,556,568</td><td>23.77%</td></tr><tr><td>SOCIEDAD DE INVERSIONES PAMPA CALICHERA SA</td><td>96,511,530-7</td><td>48,687,306</td><td>18.50%</td></tr><tr><td>THE BANK OF NEW YORK MELLON ADRS</td><td>59,030,820-K</td><td>38,311,788</td><td>14.56%</td></tr><tr><td>POTASIOS DE CHILE SA</td><td>76,165,311-3</td><td>18,179,147</td><td>6.91%</td></tr><tr><td>INV GLOBAL MINING CHILE LTDA</td><td>96,863,960-9</td><td>8,798,539</td><td>3.34%</td></tr></table>



<table><tr><td>BANCO ITAU CORP BANCA POR CTA DE INVERSIONISTAS EXTRANJEROS</td><td>97,023,000-9</td><td>7,373,216</td><td>2.80%</td></tr><tr><td>BANCO DE CHILE POR CUENTA DE TERCEROS NO RESIDENTES</td><td>97,004,000-5</td><td>6,842,855</td><td>2.60%</td></tr><tr><td>BANCO SANTANDER POR CUENTA DE INV EXTRANJEROS</td><td>97,036,000-K</td><td>6,618,416</td><td>2.51%</td></tr><tr><td>AFP HABITAT S A</td><td>98,000,100-8</td><td>5,337,680</td><td>2.03%</td></tr><tr><td>EUROAMERICA C DE B S.A.</td><td>89,899,230-9</td><td>4,866,523</td><td>1.85%</td></tr><tr><td>BANCHILE C DE B S A</td><td>96,571,220-8</td><td>4,777,425</td><td>1.82%</td></tr><tr><td>INVERSIONES LA ESPERANZA CHILE LIMITADA</td><td>79,798,650-K</td><td>4,193,763</td><td>1.59%</td></tr><tr><td>Subtotal 12 Largest Shareholders, Series A and B</td><td></td><td>216,543,226</td><td>82.27%</td></tr><tr><td>Total Shares, Series A and B</td><td></td><td>263,196,524</td><td>100%</td></tr></table>

(1) The Bank of New York Mellon is the depositary bank for the Company’s ADSs traded on the New York Stock Exchange. Information about ADS holders is provided at the end of this section.

(2) Total Sociedad de Inversiones Pampa Calichera S.A. 57,235,201 Series A and B shares; 8,547,895 Series B shares are in the custody of various brokers.

As of December 31, 2019, the 12 largest shareholders of Series A shares were:

<table><tr><td>Series A</td><td>Taxpayer ID</td><td>Number of Shares</td><td>% Ownership</td></tr><tr><td>INVERSIONES TLC SPA</td><td>76,902,021-7</td><td>62,556,568</td><td>43.80%</td></tr><tr><td>SOCIEDAD DE INVERSIONES PAMPA CALICHERA SA</td><td>96,511,530-7</td><td>44,894,152</td><td>31.43%</td></tr><tr><td>POTASIOS DE CHILE SA</td><td>76,165,311-3</td><td>18,179,147</td><td>12.73%</td></tr><tr><td>INV GLOBAL MINING CHILE LTDA</td><td>96,863,960-9</td><td>8,798,539</td><td>6.16%</td></tr><tr><td>INVERSIONES LA ESPERANZA CHILE LIMITADA</td><td>79,798,650-K</td><td>4,147,263</td><td>2.90%</td></tr><tr><td>KOCHI SA</td><td>96,518,570-4</td><td>874,192</td><td>0.61%</td></tr><tr><td>KOWA CO LTD</td><td>59,046,730-8</td><td>781,429</td><td>0.55%</td></tr><tr><td>BANCHILE C DE B S A</td><td>96,571,220-8</td><td>491,729</td><td>0.34%</td></tr><tr><td>TANNER C DE B S A</td><td>80,862,600-8</td><td>384,689</td><td>0.27%</td></tr><tr><td>KOWA HOLDINGS AMERICA INC</td><td>59,023,690-K</td><td>227,550</td><td>0.16%</td></tr><tr><td>SOC ADM DE FDOS DE CESANTIA DE CHILE II SA FDO SOLIDARIO</td><td>76,237,243-6</td><td>194,959</td><td>0.14%</td></tr><tr><td>BANCO DE CHILE POR CUENTA DE CITI NA NEW YORK CLIE</td><td>97,004,000-5</td><td>177,463</td><td>0.12%</td></tr><tr><td>Subtotal 12 Largest Shareholders, Series A</td><td></td><td>141,707,680</td><td>99.22%</td></tr><tr><td>Total Shares, Series A</td><td></td><td>142,819,552</td><td>100%</td></tr></table>



As of December 31, 2019, the 12 largest shareholders of Series B shares were:

<table><tr><td>Series B</td><td>Taxpayer ID</td><td>Number of Shares</td><td>% Ownership</td></tr><tr><td>THE BANK OF NEW YORK MELLON ADRS</td><td>59,030,820-K</td><td>38,311,788</td><td>31.83%</td></tr><tr><td>BANCO ITAU CORP BANCA POR CTA DE INVERSIONISTAS EXTRANJEROS</td><td>97,023,000-9</td><td>7,373,216</td><td>6.13%</td></tr><tr><td>BANCO DE CHILE POR CUENTA DE TERCEROS NO RESIDENTES</td><td>97,004,000-5</td><td>6,842,746</td><td>5.68%</td></tr><tr><td>BANCO SANTANDER POR CUENTA DE INV EXTRANJEROS</td><td>97,036,000-K</td><td>6,618,416</td><td>5.50%</td></tr><tr><td>AFP HABITAT S A</td><td>98,000,100-8</td><td>5,337,680</td><td>4.43%</td></tr><tr><td>EUROAMERICA C DE B S.A.</td><td>96,899,230-9</td><td>4,863,467</td><td>4.04%</td></tr><tr><td>BANCHILE C DE B S A</td><td>96,571,220-8</td><td>4,285,696</td><td>3.56%</td></tr><tr><td>AFP PROVIDA S.A.</td><td>76,265,736-8</td><td>4,002,653</td><td>3.33%</td></tr><tr><td>SOCIEDAD DE INVERSIONES PAMPA CALICHERA SA</td><td>96,511,530-7</td><td>3,793,154</td><td>3.15%</td></tr><tr><td>AFP CUPRUM S A</td><td>76,240,079-0</td><td>3,594,402</td><td>2.99%</td></tr><tr><td>AFP CAPITAL S A</td><td>98,000,000-1</td><td>3,221,037</td><td>2.68%</td></tr><tr><td>BOLSA DE COMERCIO DE SANTIAGO BOLSA DE VALORES</td><td>90,249,000-0</td><td>3,077,930</td><td>2.56%</td></tr><tr><td>Subtotal 12 Largest Shareholders, Series B</td><td></td><td>91,322,185</td><td>75.86%</td></tr><tr><td>Total Shares, Series B</td><td></td><td>120,376,972</td><td>100%</td></tr></table>

(1) The Bank of New York Mellon is the depositary bank for the Company’s ADSs traded on the New York Stock Exchange. Information about ADS holders is provided at the end of this section.

(2) Total Sociedad de Inversiones Pampa Calichera S.A. 12,341,049 Series B shares; 8,247,895 Series B shares are in the custody of various brokers.



The Bank of New York Mellon is the depositary bank for the Company’s ADSs traded on the New York Stock Exchange. According to public 13F filings with the U.S. Securities and Exchange Commission, the 12 largest ADS holders as of December 31, 2019 were:

<table><tr><td>ADSs (Series B)</td><td>Taxpayer ID</td><td>Number of ADSs</td><td>% Ownership Series B</td><td>% Ownership Total Shares</td></tr><tr><td>EARNEST PARTNERS, LLC</td><td>N/A</td><td>2,154,961</td><td>1.79%</td><td>0.82%</td></tr><tr><td>ABERDEEN STANDARD INVESTMENTS (U.K.)</td><td>N/A</td><td>1,968,200</td><td>1.64%</td><td>0.75%</td></tr><tr><td>CLEARBRIDGE INVESTMENTS, LLC</td><td>N/A</td><td>1,567,932</td><td>1.30%</td><td>0.60%</td></tr><tr><td>GLOBAL X MANAGEMENT CO. LLC</td><td>N/A</td><td>1,567,725</td><td>1.30%</td><td>0.60%</td></tr><tr><td>EVOLUTION WEALTH ADVISORS, LLC</td><td>N/A</td><td>1,432,355</td><td>1.19%</td><td>0.54%</td></tr><tr><td>MACQUARIE INVESTMENT MANAGEMENT</td><td>N/A</td><td>1,282,352</td><td>1.07%</td><td>0.49%</td></tr><tr><td>THE VANGUARD GROUP, INC.</td><td>N/A</td><td>1,196,108</td><td>0.99%</td><td>0.45%</td></tr><tr><td>MORGAN STANLEY &amp; CO. INTERNATIONAL, PLC</td><td>N/A</td><td>1,190,964</td><td>0.99%</td><td>0.45%</td></tr><tr><td>GRANTHAM MAYO VAN OTTERLOO &amp; CO., LLC</td><td>N/A</td><td>973,112</td><td>0.81%</td><td>0.37%</td></tr><tr><td>STATE STREET GLOBAL ADVISORS</td><td>N/A</td><td>881,509</td><td>0.73%</td><td>0.33%</td></tr><tr><td>SEI INVESTMENTS MANAGEMENT CORPORATION</td><td>N/A</td><td>679,693</td><td>0.56%</td><td>0.26%</td></tr><tr><td>BOSTON COMMON ASSET MANAGEMENT, LLC</td><td>N/A</td><td>634,082</td><td>0.53%</td><td>0.24%</td></tr><tr><td colspan="2">Subtotal 12 Largest ADS Holders</td><td>15,528,993</td><td>12.90%</td><td>5.90%</td></tr><tr><td colspan="2">Total ADSs as of December 31, 2016</td><td>38,311,788</td><td>31.83%</td><td>14.56%</td></tr></table>

## iv) TOTAL NUMBER OF SHAREHOLDERS

The following table shows the total number of SQM’s shareholders as of December 31, 2019:

<table><tr><td></td><td>Shareholders Registry</td><td>ADS Holders Registry</td><td>Total Holders</td></tr><tr><td>Total Number of Shareholders, Series A and B</td><td>1,385</td><td>74</td><td>1,459</td></tr><tr><td>Total Number of Shareholders, Series A</td><td>358</td><td>-</td><td>358</td></tr><tr><td>Total Number of Shareholders, Series B</td><td>1,302</td><td>74</td><td>1,376</td></tr></table>

## v) SIGNIFICANT CHANGES IN SHARE OWNERSHIP

There has not been any significant change in share ownership of the Company during 2019. The last important change in share ownership of the Company happened during 2018 when Nutrien Ltd., which was one of the main shareholder groups with 32% of SQM's total shares as of December 31, 2017, divested all its ownership in SQM. This was through the sale of its Series B shares on the Chilean securities market in May 2018, and a sale of its Series A shares on the Chilean securities market to Inversiones TLC SpA, a subsidiary of Tianqi Lithium Corporation, in December 2018. As of December 31, 2018, Nutrien Ltd. had 0% of the total shares of SQM, and Inversiones TLC SpA had 25.86% of the total shares issued by SQM.



Until November 30, 2018, the Pampa Group was considered by the CMF as the Company's controller. However, starting from that date, the CMF determined that in accordance with the distribution of the shares of SQM, “the Pampa Group does not exert decisive power over the management of the Company, and is therefore not considered a controlling shareholder”. The CMF could change its decision in the future if circumstances change.

## Tianqi Extrajudicial Agreement with the FNE

In August 2018, after an investigation by the FNE in connection with the proposed acquisition by Tianqi of 23.77% of the Company’s Series A shares, Tianqi and the FNE entered into an extrajudicial agreement (the “Extrajudicial Agreement”) which implemented certain restrictive measures in order to (i) maintain the competitive conditions of the lithium market, (ii) mitigate the risks described in the Extrajudicial Agreement and (iii) limit Tianqi’s access to certain information of the Company and its subsidiaries, which are defined as sensitive under the Extrajudicial Agreement (“Sensitive Information”) (collectively, the “Purpose”). Pursuant to the Extrajudicial Agreement, Tianqi agreed that, among other things:

- Tianqi will not nominate any of its directors, executives or employees to the SQM Board of Directors;

- Tianqi and the directors nominated by it will not influence or intervene for the benefit of Tianqi and prejudice the interests of SQM;

- The directors nominated by Tianqi will not participate nor will they be part of any committees, the management or other decision-making bodies related to lithium of SQM or of any companies controlled by SQM, unless nominated by independent directors;

- Tianqi will inform the FNE of any agreement in the lithium market, with Albemarle and/or SQM, prior to its execution;

- Tianqi will notify the FNE of any event from which it acquires control or decisive influence in SQM;

- Tianqi will disassociate any of its directors, executives or employees appointed by third parties, who assumes a position described above in SQM;

• Tianqi will not request access to Sensitive Information from SQM;

- The directors nominated by Tianqi will not disclose Sensitive Information of SQM;

- The directors nominated by Tianqi will personally bind themselves to the obligations assumed by Tianqi with the FNE; and

- Tianqi will report to the FNE the appointments and periodic compliance with its obligations.

The restrictions will remain in place for a period of four years and be automatically renewed for two more years according to the terms of the Extrajudicial Agreement.

During the approval process for the Extrajudicial Agreement before the FNE, the Company expressed its concerns to the Chilean Antitrust Court regarding the measures contained in the Extrajudicial Agreement of since (i) it could not effectively resolve the risks that Tianqi and the FNE sought to mitigate, (ii) the restrictions are not correctly oriented to avoid the access to Sensitive Information that, in the possession of a competitor, could damage the Company and the proper functioning of the market and (iii) it could contradict the Chilean Corporations Act (Law No. 18,046 on Corporations). The Extrajudicial Agreement was approved in October 2018 by the Chilean Antitrust Court. A copy of the Extrajudicial Agreement, in Spanish, has been made publicly available on the Company’s website at http://ir.sqm.com/English/investor-relation/press-releases/press-release-details/2018/Agreement-between-FNE-and-Tianqi-LIthium/default.aspx and is also available on the FNE’s website at http://www.fne.gob.cl/wp-content/uploads/2018/09/Acuerdo-Extrajudicial-FNE-Tianqi-con-firma-27.08.18.pdf.



## Pampa Group and Tianqi Shareholders’ Agreement

On April 10, 2019, the Pampa Group and Inversiones TLC SpA, a subsidiary of Tianqi, entered into a shareholders' agreement, with respect to certain corporate governance matters. The matters addressed by the shareholders' agreement include: (i) the management of the business and affairs of the Company by the Board of Directors, (ii) the election of replacement directors in the event of resignation of any of the directors elected by each party to the Board of Directors as director elected by Series A, (iii) election of certain directors elected by Tianqi to the Company's Directors' Committee, Corporate Governance Committee and Safety, Health and Environmental Committee, (iv) access for Tianqi's internal or external auditors to SQM's management and internal and external auditors for purposes of fulfilling Tianqi's accounting and disclosure obligations with respect to its investment in SQM, (v) support for having a bilingual (Spanish/English) translator attend all SQM Board and Committee meetings to assist directors who are not bilingual and (vi) support of the Company's dividend policy for 2019, as proposed by the Board of Directors in March 2019 for approval at the 2019 annual ordinary shareholders' meeting. The agreement has a term of one year. An English language copy of the agreement is included in an essential fact (hecho esencial) filing made by Sociedad de Inversiones Pampa Calichera S.A. with the CMF on April 11, 2019 available on the CMF's website at www.cmfchile.cl.

## Board Protocol for Presentation and Use of Sensitive Information

Following the acquisition by Tianqi of SQM’s shares from Nutrien Ltd. and Tianqi entering into the Extrajudicial Agreement with the FNE, the Company’s Board of Directors deemed it necessary to adopt measures aimed at achieving the purpose of the Extrajudicial Agreement, avoiding greater points of contact between Sensitive Information and Tianqi, to complement the Extrajudicial Agreement. On January 23, 2019, the Board of Directors approved a protocol for the presentation and use of Sensitive Information, which amendment was subsequently approved by the Board on September 30, 2019. The complete version of the protocol is presented in the Note 34.2 to our consolidated financial statements and is available on the Company’s website at http://s1.q4cdn.com/793210788/files/doc_news/2019/September/PR_Information-Protocol-September_30sep2019_eng.pdf.

## 4) B) OWNERSHIP STRUCTURE AND SHARES: SHARES AND THEIR CHARACTERISTICS AND RIGHTS

## i) DESCRIPTION OF SERIES OF SHARES

Dividends are annually distributed to the Series A and Series B shareholders of record on the fifth business day prior to the date for payment of the dividends. The By-laws do not specify a time limit after which dividend entitlement elapses but Chilean regulations establish that after 5 years, unclaimed dividends are to be donated to the Chilean Fire Department.

Article 5 of the Company’s By-laws establishes that Series B shares may in no case exceed fifty percent of the issued, outstanding and paid shares of SQM. Series B shares have a restricted right to vote as they can only elect one Director of the Company, regardless of their capital stock’s share. Series B shares have the right to call for an Ordinary or Extraordinary Shareholders’ Meeting when the shareholders of at least 5% of the Series B shares request so and to call for an Extraordinary Board of Directors Meeting without the Chairman’s authorization when it is requested by the Director elected by the shareholders of the Series B shares. Series A shares have the option to exclude the Director elected by Series B shareholders from the voting process in which the Chairman of the Board is to be elected, if there is a tie in the first voting process. The second transitory article and articles 31 and 31 bis of the Company’s By-laws establish that in General Shareholders’ Meetings each shareholder will have a right to one vote for each share he owns or represents and (a) that no shareholder will have the right to vote for himself or on behalf of other shareholders of the same Series A or Series B shares representing more than 37.5% of the total outstanding shares with right to vote of each Series and (b) that no shareholder will have the right to vote for himself



or on behalf of other shareholders representing more than 32% of the total outstanding shares with a right to vote. In calculating a single shareholder’s ownership of Series A or B shares, the shareholder’s stock and those pertaining to third parties related to them are to be added.

The second transitory article provides as follows:

“Throughout the period running from the date of the extraordinary shareholders’ meeting at which this transitory article is incorporated, and December 31, 2030, the restriction against voting on behalf of more than 37.5% of any series of shares in the Company, established in Article 31 hereof, shall be subject to the following exception, applicable only to the election of board members by means of Series A shares in the Company: If two or more persons, regardless of whether or not they are related parties to each other (the incoming shareholders), act prior to December 31, 2030 such as to acquire a sufficient number of Series A shares to allow them to hold voting powers for the selection of directors of the Company amounting to more than 37.5% of that series, then any registered shareholder or group of shareholders holding more than 37.5% of all Series A shares in the Company shall be entitled to vote for the selection of directors of the Company amounting to whichever is less, between a number of the Series A shares that are held (i) by existing shareholders as of that date, and (ii) by the incoming shareholders with voting rights. Similarly, if for any reason a registered shareholder in the Company as of the date hereof who holds more than 37.5% of Series A shares in the company between the date hereof and December 31, 2030, comes to hold more voting shares for the selection of directors of the Company than the votes allocated for holding 37.5% of said Series A shares, either through a joint action agreement with other shareholders, including existing shareholders, or by any other means, then any other shareholder or group of shareholders in the Company that is not a related party to the same and holds more than 37.5% of all voting Series A shares in the Company, including both existing and incoming shareholders, shall be entitled to vote for the selection of directors of the Company in accordance with whichever number of Series A shares in the Company is the lesser, between (i) the number held by this shareholder or group of shareholders, and (ii) the existing shareholder may have the capacity to vote in excess of the restriction amounting to 37.5% of said shares.”

Article 5 bis of the Company’s By-laws establishes that no person may directly or by means of related third persons concentrate more than 32% of the Company’s total shares with right to vote.

Each Series A share and Series B share is entitled to share equally in the Company’s profits, i.e., they have the same rights on any dividends declared on the outstanding shares of SQM.

The Company By-laws do not contain any provision relating to (a) redemption provisions (b) sinking funds or (c) liability to capital calls by the Company.

As established in article 103 of Law No. 18,046, a company subject to the supervision of the SVS may be liquidated in the following cases:

• Expiration of the duration term, if any, as established in its By-laws;

- All the shares end up in the possession of one individual for more than ten continuous days;

• By agreement of an Extraordinary Shareholders Meeting;

• By abolition, pursuant to applicable laws, of the decree that authorized its existence;

• Any other reason contemplated in its By-laws.

Article 40 of the Company’s By-laws states that in the event of liquidation, the Shareholders’ Meeting will appoint a three-member receiver committee that will have the authority to carry out the liquidation process. Any surplus will be distributed equally among the shareholders.

The only way to change the rights of the holders of the SQM shares, including holders of our ADSs, is by modifying its By-laws, which can only be carried out by an Extraordinary Shareholders’ Meeting, as established in article 28 of the Company By-laws.



Total number of shares:

• Series A: 142,819,552

• Series B: 120,376,972

## ii) DIVIDEND POLICY

SQM’s dividend policy for 2019, which was announced at the General Ordinary Shareholders’ Meeting on April 25, 2019, was to distribute to the SQM’s shareholders as a final dividend a percentage of our net income that is determined as per following financial parameters:

100% of the 2019 net income, when the following financial parameters are met: (a) that the total current assets, divided by the total current financial liabilities is equal to or greater than 2.5 times, and (b) the sum of the total current liabilities and total non-current liabilities, excluding both cash and cash equivalents and other current financial assets, divided by the total equity is equal to or less than 0.8 times.

80% of the 2019 net income, when the following financial parameters are met: (a) that the total current assets, divided by the total sum of the total current financial liabilities is equal to or greater than 2.0 times, and (b) the total sum of the current liabilities and total non-current liabilities, excluding both cash and cash equivalents and other current financial assets divided by the total equity is equal to or less than 0.9 times.

60% of the 2019 net income, when the following financial parameters are met: (a) that the total current assets, divided by the total sum of the total current financial liabilities is equal to or greater than 1.5 times, and (b) the total sum of the current liabilities and total non-current liabilities, excluding both cash and cash equivalents and other current financial assets divided by the total equity is equal to or less than 1.0 times.

If none of the foregoing financial parameters are met, the Company shall distribute and pay, as a final dividend, and in favor of the respective shareholders, 50% of the 2019 net income.

According to the dividend policy for 2019, the dividends are distributed and paid during 2019, in the form of three interim dividends (dividendos provisorios) that will be charged against the final dividend. At the ordinary shareholders meeting that will be held in 2020, the Board of Directors shall propose a final dividend pursuant to the financial parameters expressed above, discounting the total amount of the interim dividends previously distributed during 2019.

On May 22, 2019, the Board of Directors agreed to pay and distribute on June 12, 2019 a provisional dividend of US$81 million, equivalent to US$0.30598 per share, to be charged against the 2019 net income.

On August 21, 2019, the Board of Directors agreed to pay and distribute on September 12, 2019 a provisional dividend of US$70 million, equivalent to US$0.26669 per share, to be charged against the 2019 net income.

On November 20, 2019, the Board of Directors agreed to pay and distribute on December 12, 2019 a provisional dividend of US$61 million, equivalent to US$0.22987 per share, to be charged against the 2019 net income.

## iii) (1) STATISTICAL INFORMATION: DIVIDENDS



All series A and series B shares carry equal rights to share in any dividend declared on SQM’s shareholder capital in circulation. During the past three years, the Company has paid out the following dividends:

<table><tr><td>Payout Year</td><td>US$ Total (in millions)</td><td>US$/Share</td></tr><tr><td>2017</td><td>53.3</td><td>0.20248</td></tr><tr><td>2017 (Interim)</td><td>103.2</td><td>0.39222</td></tr><tr><td>2017 (Interim)</td><td>101.2</td><td>0.38432</td></tr><tr><td>2017 (Interim)</td><td>112.9</td><td>0.42879</td></tr><tr><td>2018</td><td>110.5</td><td>0.41968</td></tr><tr><td>2018 (Special)</td><td>100.0</td><td>0.37994</td></tr><tr><td>2018 (Interim)</td><td>113.8</td><td>0.43247</td></tr><tr><td>2018 (Interim)</td><td>133.9</td><td>0.50864</td></tr><tr><td>2018 (Interim)</td><td>83.5</td><td>0.31726</td></tr><tr><td>2019</td><td>108.6</td><td>0.41274</td></tr><tr><td>2019 (Interim)</td><td>80.5</td><td>0.30598</td></tr><tr><td>2019 (Interim)</td><td>70.2</td><td>0.26669</td></tr><tr><td>2019 (Interim)</td><td>60.5</td><td>0.22987</td></tr></table>

## iii) (2) STATISTICAL INFORMATION: SHARE TRANSACTIONS

SQM’s Series A and Series B shares are traded on the Santiago Stock Exchange and the Santiago Electronic Stock Exchange, and also had been traded on the Valparaíso Stock Exchange until it ceased operations on October 8, 2018. The Company’s Series B shares have been traded as ADSs on the New York Stock Exchange since September 20, 1993.

Information on SQM’s shares on Chilean stock exchanges:

<table><tr><td rowspan="2"></td><td colspan="2">Average Price (Ch$/Share)</td><td colspan="2">Number of Shares Traded</td><td colspan="2">Amount Traded (Millions of Ch$)</td></tr><tr><td>SQM-A</td><td>SQM-B</td><td>SQM-A</td><td>SQM-B</td><td>SQM-A</td><td>SQM-B</td></tr><tr><td>2019</td><td>22,210.71</td><td>22,457.56</td><td>1,113,090</td><td>90,152,285</td><td>24,317</td><td>2,031,897</td></tr><tr><td>I Quarter</td><td>27,167.11</td><td>27,317.70</td><td>251,390</td><td>25,474,477</td><td>6,978</td><td>692,485</td></tr><tr><td>II Quarter</td><td>22,872.03</td><td>23,202.03</td><td>51,802</td><td>21,774,687</td><td>1,180</td><td>500,379</td></tr><tr><td>III Quarter</td><td>19,375.08</td><td>19,437.57</td><td>157,359</td><td>19,579,815</td><td>2,962</td><td>379,225</td></tr><tr><td>IV Quarter</td><td>19,302.92</td><td>19,745.86</td><td>652,539</td><td>23,323,306</td><td>13,197</td><td>459,809</td></tr></table>

Source: Bloomberg, Composite Exchange

Information on SQM’s shares on the New York Stock Exchange:

<table><tr><td rowspan="2"></td><td>Average Price (US$/ADS)</td><td>Number of Shares Traded</td><td>Amount Traded (Millions of US$)</td></tr><tr><td>SQM-B</td><td>SQM-B</td><td>SQM-B</td></tr><tr><td>2019</td><td>32.14</td><td>195,792,998</td><td>6,245</td></tr><tr><td>I Quarter</td><td>40.87</td><td>48,837,462</td><td>1,988</td></tr><tr><td>II Quarter</td><td>34.11</td><td>44,751,788</td><td>1,519</td></tr><tr><td>III Quarter</td><td>27.59</td><td>49,896,658</td><td>1,371</td></tr><tr><td>IV Quarter</td><td>26.34</td><td>52,307,090</td><td>1,368</td></tr></table>



## 5) SOCIAL RESPONSIBILITY AND SUSTAINABLE DEVELOPMENT

## 5) A) SOCIAL RESPONSIBILITY AND SUSTAINABLE DEVELOPMENT: DIVERSITY WITHIN THE BOARD OF DIRECTORS AS OF DECEMBER 31, 2019

## i) NUMBER OF PERSONS BY GENDER

<table><tr><td>Number of female directors</td><td>0</td></tr><tr><td>Number of male directors:</td><td>8</td></tr></table>

## ii) NUMBER OF PERSONS BY NATIONALITY

<table><tr><td>Number of Chilean directors:</td><td>6</td></tr><tr><td>Number of foreign directors:</td><td>2</td></tr></table>

## iii) NUMBER OF PERSONS BY AGE

Number of directors whose age is:

<table><tr><td>Under 30 years:</td><td>0</td></tr><tr><td>30 to 40 years:</td><td>1</td></tr><tr><td>41 to 50 years:</td><td>2</td></tr><tr><td>51 to 60 years:</td><td>2</td></tr><tr><td>61 to 70 years:</td><td>3</td></tr><tr><td>Over 70 years:</td><td>0</td></tr></table>

## iv) NUMBER OF PERSONS BY YEARS OF SERVICE

Number of directors who, as of December 31, 2019, have held the position of director of SQM for:

<table><tr><td>Less than 3 years:</td><td>6</td></tr><tr><td>Between 3 and 6 years:</td><td>2</td></tr><tr><td>More than 6 and less than 9 years:</td><td>0</td></tr><tr><td>Between 9 and 12 years:</td><td>0</td></tr><tr><td>More than 12 years:</td><td>0</td></tr></table>

## 5) B) SOCIAL RESPONSIBILITY AND SUSTAINABLE DEVELOPMENT: DIVERSITY WITHIN EXECUTIVE MANAGEMENT AS OF DECEMBER 31, 2019

## i) NUMBER OF PERSONS BY GENDER

<table><tr><td>Number of female executive officers:</td><td>2</td></tr><tr><td>Number of male executive officers:</td><td>9</td></tr></table>

## ii) NUMBER OF PERSONS BY NATIONALITY

<table><tr><td>Number of Chilean executive officers:</td><td>10</td></tr><tr><td>Number of foreign executive officers:</td><td>1</td></tr></table>



## iii) NUMBER OF PERSONS BY AGE

Number of executive officers whose age is:

<table><tr><td>Under 30 years:</td><td>0</td></tr><tr><td>30 to 40 years:</td><td>5</td></tr><tr><td>41 to 50 years:</td><td>4</td></tr><tr><td>51 to 60 years:</td><td>1</td></tr><tr><td>61 to 70 years:</td><td>1</td></tr><tr><td>Over 70 years:</td><td>0</td></tr></table>

## iv) NUMBER OF PERSONS BY YEARS OF SERVICE

Number of executive officers who, as of December 31, 2019, have worked at SQM for:

<table><tr><td>Less than 3 years:</td><td>2</td></tr><tr><td>Between 3 and 6 years:</td><td>2</td></tr><tr><td>More than 6 and less than 9 years:</td><td>1</td></tr><tr><td>Between 9 and 12 years:</td><td>0</td></tr><tr><td>More than 12 years:</td><td>6</td></tr></table>

## 5) C) SOCIAL RESPONSIBILITY AND SUSTAINABLE DEVELOPMENT: DIVERSITY WITHIN THE ORGANIZATION AT DECEMBER 31, 2019

## i) NUMBER OF PERSONS BY GENDER

<table><tr><td>Total number of female employees:</td><td>937</td></tr><tr><td>Total number of male employees:</td><td>4,804</td></tr></table>

## ii) NUMBER OF PERSONS BY NATIONALITY

<table><tr><td>Total number of Chilean employees:</td><td>5,167</td></tr><tr><td>Total number of foreign employees:</td><td>574</td></tr></table>

## iii) NUMBER OF PERSONS BY AGE

Total number of employees whose age is:

<table><tr><td>Under 30 years:</td><td>924</td></tr><tr><td>30 to 40 years:</td><td>2.226</td></tr><tr><td>41 to 50 years:</td><td>1.486</td></tr><tr><td>51 to 60 years:</td><td>844</td></tr><tr><td>61 to 70 years:</td><td>250</td></tr><tr><td>Over 70 years:</td><td>11</td></tr></table>

## iv) NUMBER OF PERSONS BY YEARS OF SERVICE

Total number of employees who, as of December 31, 2019, have worked at SQM for:

<table><tr><td>Less than 3 years:</td><td>1.944</td></tr><tr><td>Between 3 and 6 years:</td><td>1.788</td></tr><tr><td>More than 6 and less than 9 years:</td><td>591</td></tr></table>



<table><tr><td>Between 9 and 12 years:</td><td>604</td></tr><tr><td>More than 12 years:</td><td>814</td></tr></table>

## 5) D) SOCIAL RESPONSIBILITY AND SUSTAINABLE DEVELOPMENT: SALARY GAP BY GENDER

Proportion of the average gross base salary represented by female employees compared to male employees, disclosed according to the type of position:



<table><tr><td>Position Type</td><td>Hay Methodology Group Level (1)</td><td>Female Employees (%)</td></tr><tr><td>Chief Executive Officer</td><td>26 (3)</td><td></td></tr><tr><td>Vice President</td><td>20</td><td>84%</td></tr><tr><td></td><td>21 (3)</td><td></td></tr><tr><td></td><td>22 (3)</td><td></td></tr><tr><td></td><td>23 (3)</td><td></td></tr><tr><td>Manager</td><td>19 (3)</td><td></td></tr><tr><td>Sales Manager</td><td>20 (3)</td><td></td></tr><tr><td>Operations Manager</td><td>19 (3)</td><td></td></tr><tr><td></td><td>20 (3)</td><td></td></tr><tr><td>Deputy Manager</td><td>16</td><td>100%</td></tr><tr><td></td><td>17</td><td>82%</td></tr><tr><td></td><td>18</td><td>108%</td></tr><tr><td></td><td>19 (3)</td><td></td></tr><tr><td>Head of Department</td><td>15</td><td>108%</td></tr><tr><td></td><td>16</td><td>100%</td></tr><tr><td>Manager</td><td>13</td><td>96%</td></tr><tr><td></td><td>14</td><td>107%</td></tr><tr><td></td><td>15</td><td>103%</td></tr><tr><td></td><td>16</td><td>101%</td></tr><tr><td>Senior professional</td><td>14</td><td>91%</td></tr><tr><td></td><td>15</td><td>72%</td></tr><tr><td></td><td>16</td><td>76%</td></tr><tr><td>Professional</td><td>12 (2)</td><td></td></tr><tr><td></td><td>13</td><td>93%</td></tr><tr><td></td><td>14</td><td>95%</td></tr><tr><td></td><td>15</td><td>114%</td></tr><tr><td>Supervisor</td><td>13</td><td>82%</td></tr><tr><td>Sales representative</td><td>13</td><td>59%</td></tr><tr><td>Technical operator</td><td>12</td><td>112%</td></tr><tr><td></td><td>13</td><td>104%</td></tr><tr><td>Administrator</td><td>12</td><td>109%</td></tr><tr><td></td><td>13 (2)</td><td></td></tr><tr><td>Operator</td><td>11</td><td>91%</td></tr><tr><td></td><td>12</td><td>88%</td></tr><tr><td></td><td>13</td><td>100%</td></tr></table>

(1) The Hay Methodology is a system that is used at companies around the world in order to evaluate positions in such a way that they can be compared among companies of different sizes and industries. Group levels are determined on the basis of multiple variables, including company size and the level of responsibility assigned to the position (defined primarily as a function of knowledge, autonomy and responsibility for results).

(2) All employees at this position/group level are women.

(3) All employees at this position/group level are men.



## 6) MANAGEMENT AND PERSONNEL

## 6) A) MANAGEMENT AND PERSONNEL: ORGANIZATIONAL CHART

Organizational Chart



(1) On January 8, 2019, Ricardo Ramos became CEO of SQM S.A.

(2) On October 14, 2019, Ignacia López joined SQM as Public Affairs Manager.

(3) On April 1, 2019, Francisco Sanchez V. became Risk and Compliance Officer.

(4) On March 22, 2019, Jose Miguel Berguño became Vice President of Operations Nitrates – Iodine.

(5) On March 22, 2019, Carlos Díaz became Vice President of Operations Potassium – Lithium.

(6) On April 29, 2019, Natalia Pizarro became Vice President of People and Performance.

## 6) B) MANAGEMENT AND PERSONNEL: INFORMATION ABOUT THE BOARD OF DIRECTORS

## i) GENERAL INFORMATION ABOUT THE BOARD OF DIRECTORS

SQM’s Board of Directors comprises 8 members, none of which are alternate directors. The entire Board of Directors is regularly elected every three years at our ordinary shareholders’ meeting. The Board of Directors may appoint replacements to fill any vacancies that occur during periods between elections. If a vacancy occurs, the entire Board must be elected or re-elected at the next regularly scheduled meeting of shareholders. The last election of the Board of Directors took place at the ordinary shareholders’ meeting held on April 25, 2019.

## ii) IDENTIFICATION OF THE BOARD MEMBERS

Directors as of December 31, 2019:

<table><tr><td>Name</td><td>Title</td><td>Profession</td><td>Chilean Taxpayer ID</td><td>Date of Original Election</td><td>Date of Last Re-election</td></tr><tr><td>Alberto Salas Muñoz</td><td>Chairman</td><td>Civil Engineer</td><td>6.616.233-0</td><td>Apr. 2018</td><td>Apr. 2019</td></tr><tr><td>Patricio Contesse Fica</td><td>Vice Chairman</td><td>Lawyer</td><td>15.315.085-0</td><td>Apr. 2018</td><td>Apr. 2019</td></tr></table>



<table><tr><td>Georges de Bourguignon Arndt</td><td>Director</td><td>Economist</td><td>7.269.147-4</td><td>Apr. 2019</td><td>N/A</td></tr><tr><td>Hernán Büchi Buc</td><td>Director</td><td>Civil Engineer</td><td>5.718.666-6</td><td>Apr. 2017</td><td>Apr. 2019</td></tr><tr><td>Laurence Golborne Riveros</td><td>Director</td><td>Industrial Civil Engineer</td><td>8.170.562-3</td><td>Apr. 2018</td><td>Apr. 2018</td></tr><tr><td>Gonzalo Guerrero Yamamoto</td><td>Director</td><td>Lawyer</td><td>10.581.580-8</td><td>Apr. 2016</td><td>Apr. 2017</td></tr><tr><td>Francisco Ugarte Larrain</td><td>Director</td><td>Lawyer</td><td>10.325.736-0</td><td>Apr. 2019</td><td>N/A</td></tr><tr><td>Robert J. Zatta</td><td>Director</td><td>Business Administration</td><td>N/A</td><td>Apr. 2019</td><td>N/A</td></tr></table>

Directors not on the Board as of December 31, 2019 but who were on the Board within the last two years:

<table><tr><td>Name</td><td>Title</td><td>Profession</td><td>Chilean Taxpayer ID</td><td>Date of Original Election</td><td>Date of Last Reelection</td><td>Date Left Board</td></tr><tr><td>Joanne L. Boyes</td><td>Director</td><td>Chartered Professional Accountant</td><td>48.188.014-9</td><td>Apr. 2015</td><td>Apr. 2017</td><td>Jan. 2018</td></tr><tr><td>Mark F. Fracchia</td><td>Director</td><td>Chemical Engineer</td><td>N/A</td><td>Feb. 2018</td><td>Apr. 2018</td><td>Dec. 2018</td></tr><tr><td>Gerardo Jofré Miranda</td><td>Vice Chairman</td><td>Business Administrator</td><td>5.672.444-3</td><td>Apr. 2017</td><td>N/A</td><td>Apr. 2018</td></tr><tr><td>Robert A. Kirkpatrick</td><td>Director</td><td>Lawyer</td><td>48.187.982-5</td><td>Apr. 2015</td><td>Apr. 2017</td><td>Jan. 2018</td></tr><tr><td>Fernando Massu Tare</td><td>Director</td><td>Business Administrator</td><td>6.783.826-2</td><td>Apr. 2017</td><td>N/A</td><td>Apr. 2018</td></tr><tr><td>Eugenio Ponce Lerou</td><td>Chairman</td><td>Mechanical Engineer</td><td>5.370.715-7</td><td>Apr. 2016</td><td>Apr. 2017</td><td>Apr. 2018</td></tr><tr><td>Arnfinn F. Prugger</td><td>Director</td><td>Geoscientist</td><td>48.187.981-7</td><td>Apr. 2015</td><td>Apr. 2018</td><td>Apr. 2019</td></tr><tr><td>Darryl Stann</td><td>Director</td><td>Chartered Professional Accountant</td><td>N/A</td><td>Jan. 2018</td><td>Apr. 2018</td><td>Dec. 2018</td></tr></table>



## iii) REMUNERATIONS OF THE DIRECTORS

Summary of remunerations paid to members of the Board of Directors between January and December 2019 (in Ch$):

<table><tr><td></td><td colspan="2">Board of Directors SQM S.A.</td><td colspan="2">Directors&#x27; Committee SQM S.A.</td><td>Corporate Governance Committee SQM S.A.</td><td>Safety, Health and Environment Committee SQM S.A.</td><td>Total</td></tr><tr><td>Directors</td><td>Fixed</td><td>Variable</td><td>Fixed</td><td>Variable</td><td>Fixed</td><td>Fixed</td><td></td></tr><tr><td>Alberto Salas Muñoz</td><td>211,917,584</td><td>355,116,983</td><td>54,772,055</td><td>59,186,164</td><td></td><td></td><td>680,992,786</td></tr><tr><td>Patricio Contesse Fica</td><td>185,427,887</td><td>355,116,983</td><td></td><td></td><td>19,594,856</td><td>26,489,699</td><td>586,629,425</td></tr><tr><td>Georges de Bourguignon Arndt</td><td>134,555,100</td><td></td><td>44,851,700</td><td></td><td></td><td></td><td>179,406,800</td></tr><tr><td>Hernán Büchi Buc</td><td>165,833,031</td><td>177,558,483</td><td>15,582,343</td><td>59,186,161</td><td>26,489,699</td><td></td><td>444,649,717</td></tr><tr><td>Mark Fracchia</td><td>9,648,027</td><td>92,911,790</td><td></td><td></td><td>1,378,290</td><td></td><td>103,938,107</td></tr><tr><td>Laurence Golborne Riveros</td><td>165,833,031</td><td>177,558,491</td><td>54,772,054</td><td>59,186,164</td><td></td><td></td><td>457,349,740</td></tr><tr><td>Gonzalo Guerrero Yamamoto</td><td>182,818,995</td><td>177,558,491</td><td></td><td></td><td></td><td>29,320,693</td><td>389,698,179</td></tr><tr><td>Arnfinn F. Prugger</td><td>48,263,895</td><td>177,558,483</td><td></td><td></td><td></td><td>6,894,843</td><td>232,717,221</td></tr><tr><td>Darryl Stann</td><td>9,648,027</td><td>92,911,790</td><td></td><td></td><td>1,378,290</td><td></td><td>103,938,107</td></tr><tr><td>Francisco Ugarte Larrain</td><td>134,555,100</td><td></td><td></td><td></td><td>22,425,850</td><td></td><td>156,980,950</td></tr><tr><td>Robert J. Zatta</td><td>117,569,136</td><td></td><td></td><td></td><td></td><td>19,594,856</td><td>137,163,992</td></tr><tr><td>TOTAL</td><td>1,366,069,813</td><td>1,606,291,494</td><td>169,978,152</td><td>177,558,489</td><td>71,266,985</td><td>82,300,091</td><td>3,473,465,024</td></tr></table>



Summary of remunerations paid to members of the Board of Directors between January and December 2018 (in Ch$):

<table><tr><td rowspan="2"></td><td colspan="2">Board of Directors SQM S.A.</td><td colspan="2">Directors&#x27; Committee SQM S.A.</td><td rowspan="2">Corporate Governance Committee SQM S.A.</td><td rowspan="2">Safety, Health and Environment Committee SQM S.A.</td><td rowspan="2">Total</td><td rowspan="2">Board of Directors SQM C S.A.</td><td rowspan="2">Total</td></tr><tr><td>Fixed</td><td>Variable</td><td>Fixed</td><td>Variable</td></tr><tr><td>Directors</td><td>Fixed</td><td>Variable</td><td>Fixed</td><td>Variable</td><td>Fixed</td><td>Fixed</td><td>Fixed</td><td>Fixed</td><td>Fixed</td></tr><tr><td>Alberto Salas Muñoz</td><td>76,419,796</td><td></td><td>21,588,591</td><td></td><td></td><td></td><td>98,008,387</td><td></td><td>98,008,387</td></tr><tr><td>Patricio Contesse Fica</td><td>66,867,323</td><td></td><td></td><td></td><td></td><td>9,552,476</td><td>76,419,799</td><td></td><td>76,419,799</td></tr><tr><td>Joanne L. Boyes</td><td>10,724,616</td><td>116,115,257</td><td>4,021,732</td><td>38,705,088</td><td></td><td></td><td>169,566,693</td><td></td><td>169,566,693</td></tr><tr><td>Hernán Büchi Buc</td><td>93,770,985</td><td>154,820,339</td><td>21,588,590</td><td></td><td>16,278,392</td><td>6,725,916</td><td>293,184,222</td><td></td><td>293,184,222</td></tr><tr><td>Mark Fracchia</td><td>83,046,367</td><td>38,705,088</td><td></td><td></td><td>9,552,476</td><td></td><td>131,303,931</td><td></td><td>131,303,931</td></tr><tr><td>Laurence Golborne Riveros</td><td>66,867,323</td><td></td><td>21,588,591</td><td></td><td></td><td></td><td>88,455,914</td><td></td><td>88,455,914</td></tr><tr><td>Gonzalo Guerrero Yamamoto</td><td>88,411,355</td><td>154,820,206</td><td></td><td></td><td></td><td>14,938,485</td><td>258,170,046</td><td></td><td>258,170,046</td></tr><tr><td>Gerardo Jofre Miranda</td><td>26,903,660</td><td>154,820,206</td><td>10,088,874</td><td>51,606,534</td><td>6,725,916</td><td></td><td>250,145,190</td><td></td><td>250,145,190</td></tr><tr><td>Robert A. Kirkpatrick</td><td>10,724,616</td><td>116,115,257</td><td></td><td></td><td>2,681,154</td><td></td><td>129,521,027</td><td></td><td>129,521,027</td></tr><tr><td>Fernando Massu Taré</td><td>21,518,920</td><td>154,820,206</td><td>8,069,596</td><td>51,606,534</td><td></td><td></td><td>236,015,256</td><td></td><td>236,015,256</td></tr><tr><td>Luis Eugenio Ponce Lerou</td><td>43,088,064</td><td>387,051,117</td><td></td><td></td><td></td><td></td><td>430,139,181</td><td>9,790,063</td><td>439,929,244</td></tr><tr><td>Arnfinn F. Prugger</td><td>93,770,983</td><td>154,820,338</td><td></td><td></td><td></td><td>16,278,392</td><td>264,869,713</td><td></td><td>264,869,713</td></tr><tr><td>Darryl Stann</td><td>83,046,367</td><td>38,705,088</td><td>6,067,142</td><td>12,901,694</td><td>13,597,238</td><td></td><td>154,317,529</td><td></td><td>154,317,529</td></tr><tr><td>TOTAL</td><td>765,160,375</td><td>1,470,793,102</td><td>93,013,116</td><td>154,819,850</td><td>48,835,176</td><td>47,495,269</td><td>2,580,116,888</td><td>9,790,063</td><td>2,589,906,951</td></tr></table>



## iv) ADVISORY SERVICES CONTRACTED BY THE BOARD OF DIRECTORS

During 2019, the Board of Directors contracted the following advisory services:

<table><tr><td>Entity</td><td>Type of Service</td><td>Amount (US$)</td></tr><tr><td>PriceWaterhouseCoopers</td><td>Financial statement audit</td><td>US$1.44 million</td></tr><tr><td>Others</td><td>Legal and other</td><td>US$0.04 million</td></tr><tr><td colspan="2">TOTAL</td><td>US$1.48 million</td></tr></table>

## v) BOARD OF DIRECTORS TRAINING

During 2019, the Board of Directors received training in the following areas:

(1) Orientation for new Board members

(2) Foreign Corrupt Practices Act

## 6) C) MANAGEMENT AND PERSONNEL: INFORMATION ABOUT THE DIRECTORS' COMMITTEE

## i) DIRECTORS' COMMITTEE FORMED IN ACCORDANCE WITH ARTICLE 50 PART TWO OF LAW NO, 18,046

As of December 31, 2019, the Company had a Directors’ Committee to carry out the functions established under Article 50, part two, of Law No, 18,046.

## ii) IDENTIFICATION OF MEMBERS OF THE DIRECTORS' COMMITTEE

As of December 31, 2019, the Company’s Directors’ Committee was comprised of three Directors: Georges de Bourguignon A., Laurence Golborne R. and Alberto Salas M. Under the regulations in force as of December 31, 2019, Messrs. Golborne and Salas held and continue to hold the position of Independent Director. Mr. Salas held and continues to hold the position of Chairman of the Directors’ Committee.

The members of this Directors’ Committee were elected on April 25, 2019. On that date, the elected director Georges de Bourguignon A. became a new member of the Directors’ Committee, replacing Hernan Büchi B. The Directors’ Committee had previously remained unchanged since April 27, 2018.

## iii) REMUNERATIONS OF THE DIRECTORS' COMMITTEE

On April 25, 2019, it was agreed at the SQM Ordinary Shareholders’ Meeting that each Director sitting on the Directors’ Committee would receive monthly remunerations of 200 UF, and annual remunerations equivalent to 0,02% of the Company’s liquid net earnings for the 2019 financial year. This compensation package is fixed regardless of the number of sessions held by the Committee during the period, and separate to the remunerations received by the members in their capacity as members of the Company’s Board of Directors.

For further information about remunerations paid to the members of the Directors’ Committee during 2019 and 2018, see section 5) B) iii) Remunerations of the Directors.

## iv) ACTIVITIES OF THE DIRECTORS' COMMITTEE

During 2019, the Directors’ Committee of SQM (the “Committee”) analyzed (i) the Company’s Unaudited Financial Statements and Reports; (ii) the Company’s Audited Financial Statements and Reports; (iii) the



Reports and proposals of external auditors, accounts inspectors and independent risk rating agencies for the Company; (iv) the proposal to SQM’s Board of Directors about the external auditors and independent rating agencies that the Board could recommend to the respective shareholders’ meeting for their subsequent appointment; (v) the tax and other services, other than audit services, provided by the Company’s external auditors and its subsidiaries in Chile and abroad; (vi) the remuneration and compensation plans for the Company’s main executives; (vii) the Company’s risk matrix; (viii) the activity related to the Company’s compliance program; (ix) the report on internal control of the Company and (x) the various matters referred to in the Chapter titled “Directors’ Committee” included in SQM’s Financial Statements at December 31, 2019.

Regarding the above, the Committee:

(a) Examined the information regarding the financial statements of SQM for the 2019 fiscal year and the Report issued thereon by the External Auditors of SQM, Similarly, it also examined the Company’s Interim Consolidated Financial Statements for the 2019 fiscal year.

(b) Proposed to the Company’s Board of Directors the names of the External Auditors and the Independent Credit Rating Agencies for SQM and the Company’s Board of Directors, in turn, suggested their appointment to the respective Annual Ordinary Shareholders Meeting of SQM. The Company’s Board of Directors approved said suggestions and the Shareholders’ Meeting also ratified them.

(c) Examined and approved the remuneration system and the compensation plans for the Company’s employees and senior executives.

The Committee also (i) authorized the contracting by the Company of various consulting services with PwC, (ii) reviewed the expenses of the Company's CEO, and (iii) reviewed the reports from the Company's internal audit and risk and compliance areas.

Finally, the Committee issued the Annual Management Report referred to in Law No. 18,046.

During 2019, there were no transactions with related parties that required the Committee’s review in accordance with the requirements and procedures established in Title XVI of the Chilean Corporations Act.

On April 25, 2019, the Annual General Shareholders’ Meeting of SQM approved an operational budget for the Committee; the operational budget is equivalent to the sum of the annual remunerations of the members of the Committee and US$825,000. The activities carried out by the Committee, as well as the expenses incurred by it, are disclosed at the General Shareholders Meeting.

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

## v) ADVISORY SERVICES CONTRACTED BY THE DIRECTORS' COMMITTEE

During 2019, the Committee incurred expenses of approximately US$660,000 related to the advisory services of Internal Audit and SOX Audit.



## 6) D) MANAGEMENT AND PERSONNEL: MAIN EXECUTIVES

## i) IDENTIFICATION OF EXECUTIVE OFFICERS

As of December 31, 2019, the following executives served on the Company’s executive management team:

<table><tr><td>Name</td><td>Position</td><td>Profession</td><td>Chilean Taxpayer ID</td><td>In Position Since</td></tr><tr><td>Ricardo Ramos R.</td><td>Chief Executive Officer</td><td>Industrial Civil Engineer</td><td>8.037.690-1</td><td>Jan. 2019</td></tr><tr><td>Gerardo Illanes G.</td><td>Vice President of Corporate Finance and Chief Financial Officer</td><td>Industrial Civil Engineer</td><td>13.904.120-8</td><td>Oct. 2018</td></tr><tr><td>Gonzalo Aguirre T.</td><td>General Counsel</td><td>Lawyer</td><td>13.441.419-7</td><td>Sep. 2016</td></tr><tr><td>Pablo Altimiras C.</td><td>Vice President of Lithium and Iodine Business</td><td>Industrial Civil Engineer</td><td>13.657.862-6</td><td>Oct. 2018</td></tr><tr><td>Jose Miguel Berguño C.</td><td>Vice President of Operations, Nitrates and Iodine</td><td>Industrial Civil Engineer</td><td>10.903.992-6</td><td>Mar. 2019</td></tr><tr><td>Frank Biot</td><td>Vice President of Nitrates and Potassium Business</td><td>Economist</td><td>N/A</td><td>Oct. 2018</td></tr><tr><td>Carlos Díaz O.</td><td>Vice President of Operations, Potassium and Lithium</td><td>Industrial Civil Engineer</td><td>10.476.287-5</td><td>Mar. 2019</td></tr><tr><td>Ignacia López B.</td><td>Public Affairs Manager</td><td>Journalist</td><td>10.777.962-0</td><td>Oct. 2019</td></tr><tr><td>Natalia Pizarro G.</td><td>Vice President of People and Performance</td><td>Civil Engineer</td><td>14.167.897-3</td><td>Abr. 2019</td></tr><tr><td>Raúl Puerto M.</td><td>Internal Audit Manager</td><td>Industrial Engineer</td><td>14.757.436-K</td><td>Jan. 2016</td></tr><tr><td>Francisco Sanchez V.</td><td>Risk Management and Compliance Officer</td><td>Industrial Civil Engineer</td><td>15.381.281-0</td><td>Apr. 2019</td></tr></table>

## ii) REMUNERATIONS OF MAIN EXECUTIVES

Remunerations for the main executives for 2019 and 2018 were as follows:

<table><tr><td>Year</td><td>Number of Executives (1)</td><td>Fixed Salary (Millions of Ch$)</td><td>Variable Salary (Millions of Ch$)</td><td>Total Salary (Millions of Ch$)</td></tr><tr><td>2019</td><td>124</td><td>13,421</td><td>3,916</td><td>17,337</td></tr><tr><td>2018</td><td>123</td><td>13,635</td><td>5,431</td><td>19,066</td></tr></table>

(1) Considers the average number of executives during the period.

## iii) COMPENSATION PLANS

Executive incentive plans: the organization’s goal is to create value for its interest groups, and to this end SQM S.A. has developed a variable incentives system that recognizes people’s commitment to the organization and its operating results.

Directors: the only remunerations assigned to the Board of Directors are disclosed in section 5) B) iii) Remunerations of the Directors. The Company has not implemented any incentive plans for its Directors.

SQM Executive Officers: the Company provides executives with an annual and a long-term bonus plan. Their incentives are based on target achievement, individual contribution to the Company’s operating results, and the Company’s performance. These incentives are structured in a minimum and maximum gross remuneration and are paid once a year. SQM also operates a compensation plan designed to retain its



executives by providing bonuses linked to the Company’s share price, which is payable in cash during the first quarter of 2021.

## 6) E) MANAGEMENT AND PERSONNEL: NUMBER OF EMPLOYEES

As of December 31, 2019, SQM and its subsidiaries had 5,741 employees, detailed as follows:

<table><tr><td>Employee Type</td><td>Parent</td><td>Subsidiaries</td><td>Total</td></tr><tr><td>Executives</td><td>30</td><td>91</td><td>121</td></tr><tr><td>Professionals</td><td>110</td><td>1,170</td><td>1,280</td></tr><tr><td>Technicians and operators</td><td>282</td><td>3,481</td><td>3,763</td></tr><tr><td>Foreigners</td><td>17</td><td>560</td><td>577</td></tr><tr><td>Total</td><td>439</td><td>5,302</td><td>5,741</td></tr></table>



## 6) F) MANAGEMENT AND PERSONNEL: SHARE OWNERSHIP OF EXECUTIVE OFFICERS AND BOARD MEMBERS

We have been informed that the following Directors own shares of SQM as of December 31, 2019:

<table><tr><td>Name</td><td>Position</td><td>Percentage of Shares in SQM</td></tr><tr><td>Alberto Salas Muñoz</td><td>Chairman</td><td>0%</td></tr><tr><td>Patricio Contesse Fica</td><td>Vice Chairman</td><td>0%</td></tr><tr><td>Georges de Bourguignon Arndt</td><td>Director</td><td>&lt;1%</td></tr><tr><td>Hernán Büchi Buc</td><td>Director</td><td>0%</td></tr><tr><td>Laurence Golborne Riveros</td><td>Director</td><td>0%</td></tr><tr><td>Gonzalo Guerrero Yamamoto</td><td>Director</td><td>&lt;1%</td></tr><tr><td>Francisco Ugarte Larrain</td><td>Director</td><td>0%</td></tr><tr><td>Robert J. Zatta</td><td>Director</td><td>0%</td></tr></table>

We have been informed that the following executive officers own shares of SQM as of December 31, 2019:

<table><tr><td>Name</td><td>Position</td><td>Percentage of Shares in SQM</td></tr><tr><td>Ricardo Ramos R.</td><td>Chief Executive Officer</td><td>0%</td></tr><tr><td>Gerardo Illanes G.</td><td>Vice President of Corporate Finance and Chief Financial Officer</td><td>&lt;1%</td></tr><tr><td>Gonzalo Aguirre T.</td><td>General Counsel</td><td>0%</td></tr><tr><td>Pablo Altimiras C.</td><td>Vice President of Lithium and Iodine Business</td><td>0%</td></tr><tr><td>Jose Miguel Berguño C.</td><td>Vice President of Operations, Nitrates and Iodine</td><td>&lt;1%</td></tr><tr><td>Frank Biot</td><td>Vice President of Nitrates and Potassium Business</td><td>0%</td></tr><tr><td>Carlos Díaz O.</td><td>Vice President of Operations, Potassium and Lithium</td><td>0%</td></tr><tr><td>Ignacia Lopez B.</td><td>Public Affairs Manager</td><td>0%</td></tr><tr><td>Natalia Pizarro G.</td><td>Vice President of Human Resources and Performance</td><td>0%</td></tr><tr><td>Raúl Puerto M.</td><td>Internal Audit Manager</td><td>0%</td></tr><tr><td>Francisco Sanchez V.</td><td>Risk Management and Compliance Officer</td><td>0%</td></tr></table>



## 7) INFORMATION ABOUT SUBSIDIARIES AND ASSOCIATES

## 7) A) INFORMATION ABOUT SUBSIDIARIES AND ASSOCIATES: SUBSIDIARIES AND ASSOCIATES

## Subsidiaries in Chile

## AGRORAMA S.A.:

Type of company:

Corporation

Capital:

US$133,600

Ownership:

99.999% SQMC S.A.

0.001% minority interest

Investment as % of SQM S.A.'s

individual assets:

0.00996%

Corporate purpose:

Sales and distribution of fertilizers, pesticides and agricultural inputs

Board of Directors:

Rodrigo Millán Riffo

Rodrigo Real Ibaceta

Enrique Olivares Carlini

CEO:

Rodrigo Real Ibaceta

Relationship with parent company: Distribution

Contracts with parent company: Not applicable

Address:

El Trovador 4285, 3^{rd} Floor, Las Condes, Santiago, Chile

Telephone:

(56) 2 2425 3883

Fax:

(56) 2 2425 2068

## AJAY-SQM CHILE S.A.:

Type of company:

Corporation

Capital:

US$5,313,794

Ownership:

51% SQMS.A.

49% Non-related parties

Investment as % of SQM S.A.'s

individual assets:

0.23860%

Corporate purpose:

Iodine derivatives production, sales and marketing

Board of Directors:

Carlos Díaz O.*

Felipe Smith de A.

Alec Poitevint

Matt Webb

CEO:

Marco Orellana L.

Relationship with parent company:

Production and distribution

Contracts with parent company:

Commercial agreement

Address:

Avda Pdte. Eduardo Frei N° 4900, Renca, Santiago, Chile

Telephone:

(56) 2 2443 7110

Fax:

(56) 2 2443 7114

## ALMACENES Y DEPOSITOS LTDA.:

Type of company:

Limited liability corporation

Capital:

US$1,037,878

Ownership:

99% SQMS. Potasio S.A.

1% SQMS.A.

Investment as % of SQM S.A.'s

individual assets:

0.00707%

Corporate purpose:

General deposit activities



Board of Directors: None
CEO: Ricardo Ramos R. *
Address: El Trovador 4285, Las Condes, Santiago, Chile
Relationship with parent company: Support
Contracts with parent company: Not applicable
Telephone: (56) 2 2425 2000
Fax: (56) 2 2425 2268

## COMERCIAL AGRORAMA LTDA

Type of company: Limited liability corporation
Capital: US$1,068,800
Ownership: 70% SQMC S.A.
30% Non-related parties

Investment as % of SQM S.A.'s individual assets: 0.02268%
Corporate purpose: Sales and distribution of fertilizers, pesticides and agricultural inputs
Board of Directors: Rodrigo Real Ibaceta
Rodrigo Millán R.
Enrique Olivares C.
Tullio Callegari P.
Alejandro Bitrán M.

CEO: Rodrigo Real Ibaceta
Relationship with parent company: Distribution
Contracts with parent company: Not applicable
Address: El Trovador 4285, office 1106, Las Condes, Santiago, Chile
Telephone: (56) 2 2425 2000
Fax: (56) 2 2425 2068

## COMERCIAL HYDRO S.A.:

Type of company: Corporation
Capital: US$4,818,186
Ownership: 99.9999% SQMC S.A.
0.0001% Agrorama S.A.

Investment as % of SQM S.A.'s individual assets: 0.07171%
Corporate purpose: Import and marketing of fertilizers
Board of Directors: Carlos Ríos M.
Roberto Campusano B.
Rodrigo Real Ibaceta

CEO: Rodrigo Real Ibaceta
Relationship with parent company: Support
Contracts with parent company: None
Address: El Trovador 4285, 3^{rd} Floor, Las Condes, Santiago, Chile
Telephone: (56) 2 2425 2525
Fax: (56) 2 2425 2268

## EXPLORACIONES MINERAS S.A.:

Type of company: Corporation
Capital: US$30,100,000
Ownership: 0.269103% SQM S.A.



99.730897% SQM Potasio S.A.

Investment as % of SQM S.A.'s individual assets:

0.83987%

Corporate purpose:

Operation of other mines and quarries

Board of Directors:

José Miguel Berguño C.*

Ricardo Ramos R.*
Gerardo Illanes G.*

CEO:
Ricardo Ramos R.*

Relationship with parent company: Support

Contracts with parent company: Not applicable

Address:

El Trovador 4285, Las Condes, Santiago, Chile

Telephone:

(56) 2 2425 2000

Fax:

(56) 2 2425 2434

## INSTITUCION DE SALUD PREVISIONAL NORTE GRANDE LTDA.:

Type of company:

Limited liability corporation

Capital:

US$66,880

Ownership:

99% SQM Industrial S.A.

1% SQM S.A.

Investment as % of SQM S.A.'s individual assets:

0.03472%

Corporate purpose:

Administration of health matters for SQM S.A.

Board of Directors:

Not applicable

CEO:

Humberto Riquelme

Relationship with parent company: Support

Contracts with parent company: Support

Address:

Aníbal Pinto N° 3228, Antofagasta, Chile

Telephone:

(56) 5 5241 2621

Fax:

(56) 5 5241 2632

## ORCOMA ESTUDIOS SPA:

Type of company:

Joint stock company

Capital:

US$4,631,507

Ownership:

51% SQM S.A.

49% Non-related parties

Investment as % of SQM S.A.'s individual assets:

0.05862%

Corporate purpose:

Exploration, measurement, prospection and research of

mineral deposits for extraction, production and mineral

processing

Legal representative:

Ricardo Ramos R.*

José Miguel Berguño C.*

Relationship with parent company: Not applicable

Contracts with parent company: None

Address:

Apoquindo 3721, office 131, Las Condes, Santiago, Chile

Telephone:

(56) 2 367 3000

## ORCOMA SPA:

Type of company:

Joint stock company

Capital:

US$2,357,731

Ownership:

100% SQM S.A.

Investment as % of SQM S.A.'s



individual assets: 0.05800%
Corporate purpose: Exploration, measurement, prospection, research, development and operation of mineral deposits for extraction, production and processing
Legal representative: Ricardo Ramos R.*
José Miguel Berguño C.*
Relationship with parent company: Not applicable
Contracts with parent company: None
Address: Apoquindo 3721, office 131, Las Condes, Santiago, Chile
Telephone: (56) 2 367 3000

## SERVICIOS INTEGRALES DE TRANSITOS Y TRANSFERENCIAS S.A.:

Type of company: Corporation
Capital: US$9,873,573
Ownership: 99.99966% SQM Industrial S.A.
0.00034% SQM S.A.
Investment as % of SQM S.A.'s
individual assets: 1.35988%
Corporate purpose: Transport and storage of merchandise
Board of Directors: José Miguel Berguño B.*
Ricardo Ramos R.*
Pablo Altimiras C.*
Gerardo Illanes G.*
Carlos Diaz O.*
CEO: Ricardo Ramos R.*
Relationship with parent company: Distribution
Contracts with parent company: Not applicable
Address: Arturo Prat N° 1060, Tocopilla, Chile
Telephone: (56) 5 5241 4452
Fax: (56) 5 5241 4488

## SOCIEDAD PRESTADORA DE SERVICIOS DE SALUD CRUZ DEL NORTE S.A.:

Type of company: Corporation
Capital: US$66,800
Ownership: 99% SQM Industrial S.A.
1% SQM Potasio S.A.
Investment as % of SQM S.A.'s
individual assets: 0.01852%

Corporate purpose: Provision of health-related services
Board of Directors: Mauricio Guerra Oliveros

Sergio Figueroa Rodriguez
David Zapata Figueroa

CEO: David Zapata Figueroa
Relationship with parent company: Support

Contracts with parent company: Support
Address: El Trovador 4285, Las Condes, Santiago, Chile

Telephone: (56) 2 2425 2000

Fax: (56) 2 2425 2068

## SOQUIMICH COMERCIAL S.A.:

Type of company: Open stock corporation

Capital: US$61,745,898

Ownership: 60.6383212% SQM Industrial S.A.



0.0000004% SQM S.A.
39.3616784% Non-related parties

Investment as % of SQM S.A.'s individual assets:
Corporate purpose:
Board of Directors:

2.23882%
Production and marketing of fertilizers
Bogdan Borkowski S.
Carlos Diaz O.*
Alfredo Doberti D.
Francisco Javier Fontaine S.
Gerardo Ilanes G.*
Christian Liüders M.
Eugenio Ponce L.
Rodrigo Real Ibaceta
Distribution
Supply
El Trovador 4285, 3 \( ^{rd} \)  Floor, Las Condes, Santiago, Chile
(56) 2 2425 2525
(56) 2 2425 2268

SQM INDUSTRIAL S.A.:

Type of company:

Capital:

Ownership:

Investment as % of SQM S.A.'s

individual assets:

Corporate purpose:

CEO:

Board of Directors:

Relationship with parent company:

Contracts with parent company:

Address:

Telephone:

Fax:

SQM MAG SPA:

Type of company:

Capital:

Ownership:

Investment as % of SQM S.A.'s

individual assets:

Corporate purpose:

Board of Directors:

CEO:

Relationship with parent company:

Contracts with parent company:

Address:

Telephone:

SQM NITRATOS S.A.:

Corporation
US$715,066,287
99.047043% SQM S.A.
0.952957% SQM Potasio S.A.

39.30018%

Operation of extraction plants, holdings and transfer of

mineral substances and raw materials

Ricardo Ramos R.*

José Miguel Berguño C.*

Ricardo Ramos R.*

Carlos Diaz O.*

Production

Not applicable

El Trovador 4285, Las Condes, Santiago, Chile

(56) 2 2425 2525

(56) 2 2425 2268

Joint stock company

US$10,000

100% SQM Potasio S.A.

0.06313%

Mining exploration and exploitation

None

None

Production

Not applicable

Los Militares 4290, 1st floor, Las Condes, Santiago, Chile

(56) 2 2425 2467



Type of company:
Capital:
Ownership:

Investment as % of SQM S.A.'s individual assets:
Corporate purpose:
Board of Directors:

CEO:
Relationship with parent company:
Contracts with parent company:
Address:
Telephone:
Fax:

SQM POTASIO S.A.:
Type of company:
Capital:
Ownership:

Investment as % of SQM S.A.'s individual assets:
Corporate purpose:
Board of Directors:

CEO:
Relationship with parent company:
Contracts with parent company:
Address:
Telephone:
Fax:

SQM SALAR S.A.:
Type of company:
Capital:
Ownership:

Investment as % of SQM S.A.'s individual assets:
Corporate purpose:

Board of Directors:

Corporation
US$30,349,981
99.99999782% SQM S.A.
0.00000218% SQM Potasio S.A.

10.07855%
Production and sale of fertilizers
José Miguel Berguño C.*
Ricardo Ramos R.*
Pablo Altimiras C.*
Carlos Díaz O.*
Gerardo Illanes G.*
Ricardo Ramos R.*
Production
Not applicable
El Trovador 4285, Las Condes, Santiago, Chile
(56) 2 2425 2000
(56) 2 2425 2268

Corporation
US$257,010,492
99.999999% SQM S.A.
0.000001% Non-related parties

24.41261%
Extraction of minerals for fertilizer and chemical production
José Miguel Berguño C.*
Ricardo Ramos R.*
Carlos Díaz O.*
Pablo Altimiras C.*
Carlos Díaz O.*
Ricardo Ramos R.*
Production
Not applicable
El Trovador 4285, Las Condes, Santiago, Chile
(56) 2 2425 2000
(56) 2 2425 2268

Corporation
US$38,000,000
81.82% SQM Potasio S.A.
18.18% SQM S.A.

39.82988%
Exploitation and marketing of potassium, lithium and other products
Alberto Salas M.*
Patricio Contesse F.*
Gonzalo Guerrero Y.*
Ricardo Ramos R.*
Laurence Golborne R.*



CEO: Ricardo Ramos R.*
Relationship with parent company: Production
Contracts with parent company: Not applicable
Address: El Trovador 4285, Las Condes, Santiago, Chile
Telephone: (56) 2 2425 2000
Fax: (56) 2 2425 2268

## International Subsidiaries

## ADMINISTRACION Y SERVICIOS SANTIAGO S.A. DE C.V.:

Type of company: Variable capital corporation
Capital: US$6,612
Ownership: 99.998% SQM Industrial S.A.
0.002% SQM North America Corporation
Investment as % of SQM S.A.'s
individual assets:

Corporate purpose: Corporate purpose:

Board of Directors:

0.00752%
Services
Christian Lüders M.
Ricardo Ramos R.*
Frank Biot*
Gerardo Illanes G.*
Gonzalo Aguirre T.*
Alvaro Fernandez G.
Patricio de Solminihac T.*
Domingo Aguirre F.

CEO:
Relationship with parent company:
CEO:
Relationship with parent company:
Address:
Christian Lüders M.

Support
Not applicable

Av. Moctezuma 144-4, Ciudad del Sol, CP 45050, Zapopan,

Jalisco, Mexico

Telephone:
(52 33) 35401100

Fax:

(52 33) 35401100

## COMERCIAL CAIMÁN INTERNACIONAL S.A.:

Type of company: Corporation
Capital: US$1,000
Ownership: 100% SQM Investment Corporation N.V.
Investment as % of SQM S.A.'s
individual assets: 0.00628%
Corporate purpose: Marketing, importing and exporting
Board of Directors: Christian Lüders M.
Andrés Yaksic B.*

Matías Murillo G.

CEO:
Relationship with parent company:
Christian Lüders M.

Contracts with parent company: Support

Address:
Not applicable

Edificio Plaza Bancomer, Calle 50, Panama, Republic of

Telephone:
Fax:
Panama

(52 33) 35101100

Fax:

(52 33) 35101100

## NITRATOS NATURAIS DO CHILE SERVICIOS LTDA.:

Type of company:

Limited liability corporation



Capital: US$774,294
Ownership: 29.18% SQM Industrial S.A.
70.82% SQM Brasil Ltda.

Investment as % of SQM S.A.'s individual assets: 0.00337%
Corporate purpose: Marketing advisory services, representation of other foreign and local companies, administrative support in general
Board of Directors: None
Legal representative: Martim de Almeida Sampaio
Relationship with parent company: Support
Contracts with parent company: Not applicable
Address: Calçada das Margaridas, nº 163, sala 02, Centro Comercial de Alphaville, Alphaville, Barueri, CEP 06453-038, Sao Paulo, Brazil
Telephone: (55 11) 4195 6315

## NORTH AMERICAN TRADING COMPANY:

Type of company: Corporation
Capital: US$338,124
Ownership: 100% SQM North America Corporation
Investment as % of SQM S.A.'s individual assets: 0.00741%
Corporate purpose: Investment company
Board of Directors: Gerardo Illanes G.*
Pablo Altimiras C.*
President: Pablo Hernandez
Relationship with parent company: Support
Contracts with parent company: Not applicable
Address: 2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta, GA 30339
Telephone: (1 770) 916 9400
Fax: (1 770) 916 9401

## ROYAL SEED TRADING A.V.V.:

Type of company: Limited liability corporation
Capital: US$6,000
Ownership: 1.67% SQM S.A.
98.33% SQM Potasio S.A.

Investment as % of SQM S.A.'s individual assets: 0.00108%
Corporate purpose: Investment and marketing of moveable property and real estate
Board of Directors: IMC International Management & Trust Company N.V.
CEO: IMC International Management & Trust Company N.V.
Relationship with parent company: Support
Contracts with parent company: Not applicable
Address: Caya Dr. J.E.M. Arends 18-A, Oranjestad, Aruba
Telephone: 297 582 3301
Fax: 297 583 6454

## RS AGRO CHEMICAL TRADING CORP. A.V.V.:

Type of company: Limited liability corporation
Capital: US$6,000



Ownership: 98.3333% SQM S.A.
1.6667% SQM Potasio S.A.
Investment as % of SQM S.A.'s
individual assets: 0,12667%
Corporate purpose: Investment and marketing of moveable property and real estate
Board of Directors: IMC International Management & Trust Company N.V.
CEO: IMC International Management & Trust Company N.V.
Relationship with parent company: Support
Contracts with parent company: Not applicable
Address: Caya Dr. J.E.M. Arends 18-A, Oranjestad, Aruba
Telephone: 297 582 3301
Fax: 297 583 6454

## SOQUIMICH EUROPEAN HOLDINGS B.V.:

Type of company: Limited liability corporation
Capital: US$15,815,547
Ownership: 100% SQM Corporation N.V.
Investment as % of SQM S.A.'s

individual assets: 4.44311%
Corporate purpose: Investment company
Board of Directors: Kris Van den Bruel
Patrick Vanbeneden
Paul van Duuren
Dennis Beets
CEO: None
Relationship with parent company: Distribution
Contracts with parent company: Not applicable
Address: Luna Arena, Herikerbergweg 238, 1101 CM Amsterdam Zuid-Oost, Netherlands
Telephone: (31 20) 5755600
Fax: (31 20) 6730016

## SOQUIMICH S.L.R. ARGENTINA:

Type of company: Limited liability corporation
Capital: US$1,656,500
Ownership: 99.99906% SQM Investment Corporation
0.00094% SQM Industrial S.A.
Investment as % of SQM S.A.'s
individual assets: 0.00139%
Corporate purpose: Import, export, sales and marketing of fertilizers, sodium nitrate, iodine, iodine salts, sodium sulfate, potassium nitrate and all classes of agricultural and industrial inputs
Board of Directors: None
CEO: Dr. Carlos Mario Balter
Relationship with parent company: Support
Contracts with parent company: Not applicable
Legal address: Cecilia Grierson 255 – Floor 6 - Ciudad Autónoma de Buenos Aires – C1107CPE.Bs.As
Tax address: Espejo 65 – Oficina 6 – 5500 Mendoza, Argentina
Telephone: (54 261) 429 9237
Fax: (54 261) 429 9237



## SQI CORPORATION N.V.:

Type of company: Capital:

Corporation

US$62,000

Ownership:

99.98413% SQM Potasio S.A.

0.01587% SQM S.A.

Investment as % of SQM S.A.'s individual assets:

0.00219%

Corporate purpose:

Investment in moveable goods and real estate

Board of Directors: CEO:

TMF Group
TMF Group

Relationship with parent company: Support

Contracts with parent company: Not applicable

Address:

Schout bij Doormanweg 40, Damacor Office Building 2nd

Floor, Curaçao

Telephone:

(59) (99) 4612544

Fax:

(59) (99) 4612647

## SQM AFRICA:

Type of company:

Limited liability corporation

Capital:

US$70,699

Ownership:

100% Soquimich European Holdings B.V.

Investment as % of SQM S.A.'s individual assets:

1.45875%

Corporate purpose:

Marketing of specialty plant nutrients and industrial products

Board of Directors:

Frank Biot \( ^{*} \) 

Patrick Vanbeneden

Emmanuel de Marez

Public Officer:

Ettienne Strydom

Relationship with parent company: Distribution

Contracts with parent company: Not applicable

Address:

Building 33 Waterford Office Park, Waterford Drive,

2055 Fourways, Johannesburg, South Africa

Telephone:

(27 11) 6580018

Fax:

(27 11) 6581101

## SQM AUSTRALIA PTY LTD:

Type of company:

Limited liability corporation

Capital:

US$119,955,000

Ownership:

100% SQM Potasio S.A.

Investment as % of SQM S.A.'s individual assets:

2.95310%

Corporate purpose:

Mining – Specifically lithium

Board of Directors:

Jay Leary

Pablo Altimiras C.*
Gonzalo Aguirre T.*

Gerardo Illanes G.*

CEO:

Jay Leary

Relationship with parent company: Distribution

Contracts with parent company: Not applicable

Address:

Level 16 201 Elizabeth street, Sydney NSW 2000

Telephone:

(61 412) 558911

Fax:

(61 293) 479221



## SQM (BEIJING) COMMERCIAL CO. LTDA.:

Type of company: Limited liability corporation
Capital: US$1,600,000
Ownership: 100% SQM Industrial S.A.
Investment as % of SQM S.A.'s
individual assets: 0,28856%
Corporate purpose: Commission agent and marketing of chemical products
Board of Directors: Patricio de Solminihac T.*

Telephone:

Fax:

Frank Biot \( ^{*} \) 
Ricardo Ramos R. \( ^{*} \) 

Victor Larrondo G.
Distribution

Commercial agency agreement
Room 1502, CBD International Mansion No. 16 Yong An Dong Li, Jian Wai Ave Beijing, 100022, P.R. China,
(86 10) 6461 8950
(86 10) 8454 0885

## SQM BRASIL SERVICIOS LTDA.:

Type of company:

Capital:
Ownership:

Limited liability corporation

US$2,620,000
99.16% SQM Industrial

0.84% SQM S.A.

Investment as % of SQM S.A.'s individual assets:

0.00476%

Corporate purpose:

Marketing advisory services, representation of other foreign

and domestic companies, administrative support in general

Board of Directors:
Legal representative:

None

Relationship with parent company: Martin de Almeida Sampaio

Contracts with parent company: Support

Address:
Not applicable

Calçada das Margaridas, n° 163, sala 02, Centro Comercial de

Alphaville, Alphaville, Barueri, CEP 06453-038, Sao Paulo, Brazil

Telephone:

(55 11) 4195 6315

## SQM COLOMBIA LTDA.:

Type of company:

Capital:
Ownership:
Investment as % of SQM S.A.'s individual assets:
Corporate purpose:
Board of Directors:

Join stock company
US$1,291,915
100% SQM Industrial

0,23729%

Manufacturing, import, sales and export of fertilizers

Legal representative:

Christian Luders M.
Matias Murillo G.
Patricio de Solminihac T.*
Gonzalo Aguirre T.*
Gerardo Illanes G.*
Frank Biot*
Sebastian Sanchez
Christian Luders M.
Matias Murillo G.



Relationship with parent company: Support
Contracts with parent company: Not applicable
Address: Calle 72 No. 10-07 oficina 401
Telephone: (+57) 1 746 1000
Fax: (+57) 1 746 1000

## SQM COMERCIAL DE MEXICO S.A. de C.V.:

Type of company: Variable capital corporation
Capital: US$22,044,533
Ownership: 99.94% SQM Industrial S.A.
0.05% SQM Potasio S.A.
0.01% SQM S.A.
Investment as % of SQM S.A.'s
individual assets:

Corporate purpose: Board of Directors:

2.69472%
Import, export and marketing of fertilizers
Christian Liuders M.
Ricardo Ramos R.*
Frank Biot*
Gerardo Illanes G.*
Gonzalo Aguirre T.*
Alvaro Fernandez G.
Patricio de Solminihac T.*
Matías Murillo G.
Christian Liuders M.
Distribution
Not applicable

Av. Moctezuma 144-4, Ciudad del Sol, CP 45050, Zapopan, Jalisco, Mexico

Telephone: Fax:

(52 33) 35401100

(52 33) 35401100

## SQM CORPORATION N.V.:

Type of company:
Capital:
Ownership:

Corporation
US$12,939,718
99.9794% SQM Industrial S.A.
0.0204% SQI Corporation N.V.
0.0002% SQM S.A.

Investment as % of SQM S.A.'s
individual assets:
Corporate purpose:
Board of Directors:
CEO:
Relationship with parent company:
Contracts with parent company:
Address:

4.13001%
Investment in moveable goods and real estate
TMF Group
TMF Group
Support
Not applicable
Schout bij Doormanweg 40, Damacor Office Building 2nd Floor, Curaçao
(59) (99) 4335119
(59) (99) 4335119

Telephone: Fax:

## SQM ECUADOR S.A.:

Type of company:
Capital:
Ownership:

Corporation
US$416,900
99.996% SQM Industrial S.A.



0.004% SQM S.A.

Investment as % of SQM S.A.'s
individual assets:
Corporate purpose:
Board of Directors:
CEO:
Relationship with parent company:
Contracts with parent company:
Address:
0.79403%
Wholesale fertilizer sales
None
Christian Luders M.
Distribution
Not applicable
Av. Constitución y Av. Juan Tanca Marengo, Edificio
Executive Center, Piso 3 Oficina 304-305, Guayaquil,
Ecuador
Telephone:
(593 4) 2158639
Fax:
(593 4) 2158639 ext 11

Telephone:
Fax:

## SQM EUROPE N.V.:

Type of company:
Capital:
Ownership:

Investment as % of SQM S.A.'s individual assets:
Corporate purpose:

Board of Directors:

CEO:
Relationship with parent company:
Contracts with parent company:
Address:
Telephone:
Fax:

## SQM FRANCE S.A.

Type of company:
Capital:
Ownership:
Investment as % of SQM S.A.'s
individual assets:
Corporate purpose:
Board of Directors:
Legal representative:
Relationship with parent company:
Contracts with parent company:
Address:
Telephone:

## SQM IBERIAN S.A.

Type of company:
Capital:
Ownership:

Corporation
US$18,656,745
99.42% Soquimich European Holdings B.V.
0.58% SQM S.A.

10.67744%
Distribution and marketing of specialty plant nutrients and industrial products in Europe, Northern Africa and the Middle and Far East
Ricardo Ramos R.*
Gonzalo Aguirre T.*
Pablo Altimiras C.*
Gerardo Illanes G.*
Frank Biot*
Support and Distribution
Not applicable
Houtdok-Noordkaai 25a, 2030, Antwerp, Belgium
(32 3) 2039700
(32 3) 2312782

Corporation
US$204,061
100% Soquimich European Holdings NV

0.00863%
Distribution

Oliver Lecaplain
Support
Not applicable
Zac Des Pommiers, 27930 Fauville, France
None

Corporation
US$133,127
100% Soquimich European Holdings B.V.



Investment as % of SQM S.A.'s individual assets:
Corporate purpose:

Board of Directors:

CEO:

Relationship with parent company:
Contracts with parent company:
Address:
Telephone:
Fax:

## SQM INDONESIA S.A.:

Type of company:
Capital:
Ownership:

Investment as % of SQM S.A.'s individual assets:
Corporate purpose:
Board of Directors:

CEO:
Relationship with parent company:
Contracts with parent company:
Address:

Telephone:
Fax:

## SQM INTERNATIONAL N.V.:

Type of company:
Capital:
Ownership:

Investment as % of SQM S.A.'s individual assets:
Corporate purpose:

Board of Directors:

CEO:
Relationship with parent company:
Contracts with parent company:
Address:
Telephone:

1.35395%
Distribution and marketing of specialty plant nutrients and technical products in Spain
Frank Bio \( ^{*} \) 
Erik Borglys
Gerardo Illanes G.*
José Andrés Cayuela
Enrique Torras
Erik Lütken R.
Distribution
Not applicable
Provenza 251 Principal 1a CP 08008 Barcelona, Spain
(34 93) 4877806
(34 93) 4872344

Corporation
US$30,905
80% Soquimich European Holding B.V.
20% Non-related parties

0.00006%
Import trading and distribution services
Frank Bio \( ^{*} \)  (President)
Patrick Vanbeneden
Rudy Ismanto
Not applicable
Not applicable
Not applicable
Perumahambumi Dirgantara Permai, Jl. Suryadarma Blok Aw
No. 15, Rt. 01/09, 17436 Jatisari Pondok Gede, Indonesia
(62 21) 86607760
(62 21) 86607761

Corporation
US$3,079,827
99.42% Soquimich European Holdings B.V.
0.52% SQM S.A.

1,01930%
Distribution and sales of specialty plant nutrients and industrial products in Europe, North Africa and the Middle and Far East
Ricardo Ramos R.*
Gonzalo Aguirre T.*
Pablo Altimiras C.*
Gerardo Illanes G.*
Frank Bio*
Support and distribution
Not applicable
Houtdok-Noordkaai 25a, 2030, Antwerp, Bélgica
(32 3) 2039700



## Fax:

## (32 3) 2312782

## SQM INVESTMENT CORPORATION N.V.:

Type of company: Corporation
Capital: US$50,000
Ownership: 99.00% SQM Potasio S.A.
1.00% SQM S.A.

Investment as % of SQM S.A.'s
individual assets: 1.09835%
Corporate purpose: Investment and marketing of moveable goods and real estate
Board of Directors: TMF Group
CEO: TMF Group
Relationship with parent company: Support
Contracts with parent company: Not applicable
Address: Schout bij Doormanweg 40, Damacor Office Building 2nd
Floor, Curaçao
Telephone: (59) (99) 4335119
Fax: (59) (99) 4335119

## SQM ITALIA SRL:

Type of company: Limited liability corporation
Capital: US$285,939
Ownership: 100% Soquimich European Holdings NV
Investment as % of SQM S.A.'s
individual assets: 0.02844%
Corporate purpose: Distribution
Board of Directors: None
CEO: Silvio Maria Parri
Frank Biot*

Relationship with parent company: Support
Contracts with parent company: Not applicable
Address: Via A. Meucci, N°5, 50012 – Bagno A Ripoli – Firenze, Italy
Telephone: +39 055 644 418
Fax: None

## SQM JAPAN CO. LTD.:

Type of company: Limited liability corporation
Capital: US$87,413
Ownership: 15.8147% SQM Potasio S.A.
84.0256% Soquimich European Holdings B.V.
0.1597% SQM S.A.

Investment as % of SQM S.A.'s
individual assets: 1.69630%
Corporate purpose: Marketing of products in Asia/Oceania and marketing assistance
Board of Directors: Pablo Altimiras C.*
Alvaro Fernandez
Andrés Stocker
CEO: Andrés Stocker
Relationship with parent company: Distribution and marketing
Contracts with parent company: Commercial agency agreement
Address: From 1st Bldg 207, 5-3-10 Minami- Aoyama, Minatoku, Tokyo, Japan 107-0062



Telephone: ___ (81 3) 5778 3311

Fax: ___ (81 3) 5778 3312

## SQM LITHIUM SPECIALTIES LIMITED PARTNERSHIP, L.L.P:

Type of company: Limited liability partnership

Capital: US$33,712,430

Ownership: 99% SQM Virginia LLC

1% North American Trading Co.

Investment as % of SQM S.A.'s

individual assets: 0,38713%

Corporate purpose: Production and marketing of lithium derivatives

Board of Directors: None

President: Pablo Hernandez

Relationship with parent company: Support

Contracts with parent company: Not applicable

Address: 2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta,

GA 30339

Telephone: 1 (770) 916 9400

Fax: 1 (770) 916 9401

## SQM NITRATOS MEXICO S.A. de C.V.:

Type of company: Variable capital corporation

Capital: US$5,636

Ownership: 99.998% SQM Industrial S.A.

0.002% SQM North America Corporation

Investment as % of SQM S.A.'s

individual assets: 0,00390%

Corporate purpose: Services

Board of Directors: Christian Lüders M.

Ricardo Ramos R.*

Frank Biot \( ^{*} \) 

Gerardo Illanes G.*

Gonzalo Aguirre T.*

Alvaro Fernandez G.

Patricio de Solminihac T.*

Domingo Aguirre F.

CEO: Christian Lüders M.

Relationship with parent company: Support

Contracts with parent company: Not applicable

Address: Av. Moctezuma 144-4, Ciudad del Sol, CP 45050, Zapopan,

Jalisco, Mexico

Telephone: (52 33) 35401100

Fax: ___ (52 33) 35401100

## SQM NORTH AMERICA CORPORATION:

Type of company: Corporation

Capital: US$79,576,550

Ownership: 51% SQM Industrial S.A.

40% SQM S.A.

9% Soquimich European Holdings B.V.

Investment as % of SQM S.A.'s

individual assets: 3.33149%



Corporate purpose: Marketing of nitrates, fertilizers, iodine and lithium in North America
Board of Directors: Gonzalo Aguirre T.*
Pablo Altimiras C.*
Frank Biot*
Gerardo Illanes G.*
Ricardo Ramos R.*
President: Pablo Hernandez
Relationship with parent company: Distribution
Contracts with parent company: Not applicable
Address: 2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta, GA 30339
Telephone: (1 770) 916 9400
Fax: (1 770) 916 9401

## SQM OCEANIA PTY LIMITED:

Type of company: Limited liability corporation
Capital: US$1
Ownership: 100% SQM Soquimich European Holdings B.V.

Investment as % of SQM S.A.'s individual assets: 0.13367%
Corporate purpose: Import, export and distribution of fertilizers and industrial products

Board of Directors:
Frank Biot*
Patrick Vanbeneden
Gerardo Illanes G.*
Carlos Díaz O.*
Geoffrey Walker
Stefan Debruyne
CEO:
None
Relationship with parent company:
Distribution
Contracts with parent company:
Not applicable
Address:
Level 16 201 Elizabeth street, Sydney NSW 2000
Telephone:
(61 412) 558911
Fax:
(61 293) 479221

## SQM PERÚ S.A.:

Type of company: Corporation
Capital: US$1,110,627
Ownership: 99.99093% SQM Industrial S.A.
0.00907% SQM S.A.

Investment as % of SQM S.A.'s individual assets: 0.00072%
Corporate purpose: Marketing of agricultural and industrial inputs
Board of Directors: None
CEO: None
Legal representative: Abdon Jesus Rojas Lagos
Relationship with parent company: Support
Contracts with parent company: Not applicable
Address: Avenida Camino Real N° 390 of 801, San Isidro, Lima, Peru
Telephone: (511) 6112121
Fax: (511) 6112122



## SQM (THAILAND) LIMITED:

Type of company: Capital:

Limited liability corporation

US$3,364,341

Ownership:

99.996% SQM European Holdings NV

0.004% Non-related parties

Investment as % of SQM S.A.'s

individual assets:

0.12097%

Corporate purpose:

Marketing of fertilizers and industrial chemicals

Board of Directors:

Alvaro Fernandez

Patrick Vanbeneden

Andrés Stocker

Pattamakan Suparp

Legal representative:
Aaron Duyck

Relationship with parent company: Distribution

Contracts with parent company:
Not applicable

Address:

Unit 2962, Level 29, No, 388, Exchange Tower, Sukhumvit

Road, Klongtoey District, Bangkok, Thailand

Telephone:

(66) 2104 9136

## SQM SHANGHAI CHEMICALS CORPORATION:

Type of company:

Corporation

Capital:

US$2,499.995

Ownership:

100% SQM Industrial S.A.

Investment as % of SQM S.A.'s individual assets:

0,89404%

Corporate purpose:

Sales, import and export. Sales of chemical products.

Board of Directors:

Gonzalo Aguirre T.*

Gerardo Illanes G.*

Daniel Jimenez S.

Legal representative:
Daniel Jimenez S.

Relationship with parent company: Distribution

Contracts with parent company:
Not applicable

Address:

Huaihai Road 300, Room 33, floor 47, Huangpu District,

Shanghai, China

Telephone:

(86) 21 5116 2843

Fax:

Not applicable

## SQM VIRGINIA L.L.C.:

Type of company:

Limited liability corporation

Capital:

US$33,375,305

Ownership:

100% SQM North America Corporation

Investment as % of SQM S.A.'s individual assets:

0.71625%

Corporate purpose:

Investment company

Board of Directors:

Pablo Altimiras C.*

Gerardo Illanes G.*

President:

Pablo Hernandez

Relationship with parent company: Support

Contracts with parent company:
Not applicable

Address:

2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta,

GA 30339

Telephone:

(1 770) 916 9400

Fax:

(1 770) 916 9401



## SQMC HOLDING CORPORATION:

Type of company:

Corporation

Capital:

US$3,000,000

Ownership:

99.9% SQM Potasio S.A.

0.1% SQM S.A.

Investment as % of SQM S.A.'s individual assets:

1.10768%

Corporate purpose:
Investment company

Board of Directors:

Carlos Diaz O.*

Felipe Smith de A.

President:

Pablo Hernandez

Relationship with parent company: Support

Contracts with parent company:
Not applicable

Address:
2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta,

GA 30339

Telephone:

(1 770) 916 9400

Fax:

(1 770) 916 9401

## International Associates

## ABU DHABI FERTILIZER INDUSTRIES CO. W.L.L. (U.A.E.):

Type of company:

Limited liability corporation

Capital:

US$1,443,047

Ownership:

37% SQM Corporation N.V.

63% Non-related parties

Investment as % of SQM S.A.'s individual assets:

0.28526%

Corporate purpose:
Production, distribution, sales and marketing of specialty plant nutrients

Board of Directors:

Emmanuel De Marez

Patrick Vanbeneden

Ahmed Almheairy

Khalid Almheairy

Abdullah Almheairy

CEO:
Not applicable

Relationship with parent company: Production and distribution

Contracts with parent company: Commercial agreement

Address:

PO Box 71871, Abu Dhabi, United Arab Emirates

Telephone:

(971) 25511700

Fax:

(971) 25511702

## ABU DHABI FERTILIZER INDUSTRIES CO. W.L.L. (OMAN):

Type of company:

Limited liability corporation

Capital:

US$387,228

Ownership:

70% Abu Dhabi Fertilizer Industries Co. W.L.L.

30% Non-related parties

Investment as % of SQM S.A.'s individual assets:

0.07388%

Corporate purpose:

Distribution, sales and marketing of specialty plant nutrients

Board of Directors:

Patrick Vanbeneden (legal representative)

CEO:

Rajab Khalil

Relationship with parent company: Distribution



Contracts with parent company: None
Address: P.O. Box 148, Postal Code 31, Al-Suwaiq
Sultanate of Oman
Telephone: (968) 26860477
Fax: (968) 26860577

## AJAY EUROPE SARL:

Type of company: Limited liability corporation
Capital: US$3,975,721
Ownership: 50% Soquimich European Holdings B.V.
50% Non-related parties
Investment as % of SQM S.A.'s

individual assets:

Corporate purpose:

Board of Directors:

CEO:

Relationship with parent company: Production and distribution

Contracts with parent company: Commercial agreement

Address:

Telephone:

Fax:

Fax:

## AJAY NORTH AMERICA L.L.C.:

Type of company:

Capital:

Ownership:

Investment as % of SQM S.A.'s

individual assets:

Corporate purpose:

Board of Directors:

CEO:

Relationship with parent company:

Contracts with parent company:

Address:

Telephone:

Fax:

## COVALENT LITHIUM PTY LTD:

Type of company:

Capital:

Ownership:

individual assets:

Corporate purpose:

None

P.O. Box 148, Postal Code 31, Al-Suwaiq

Sultanate of Oman
(968) 26860477
(968) 26860577

Limited liability corporation
US$3,975,721
50% Soquimich European Holdings B.V.
50% Non-related parties

0.18309%

Production and distribution of iodine derivatives
José Antonio Merino
Andrés Fontannaz
Alec Poitevint
Matt Webb

Michel Pichon
Production and distribution
Commercial agreement
Z.I. du Grand Verger BP 227 53602, Evron Cedex, France
(33 24) 3013535
(33 24) 3017618

Limited liability corporation
US$10,383,786
49% SQMCH Holding Corporation
51% Non-related parties

0.36045%

Production, sales and marketing of iodine derivatives
José Antonio Merino
Andrés Fontannaz
Alec Poitevint
Matt Webb
Matt Webb
Production and distribution
Commercial agreement
1400 Industry Road, Power Springs, GA 30129
1 (770) 943 6202
1 (770) 439 0369

Limited liability corporation
US$7
50% SQM Australia Pty Ltd
50% Non-related parties

0.00098%

Administration, design, execution, construction and operation

of projects



Board of Directors: Ian Hansen
Pablo Altimiras C.*
Eugenio Ponce L.
CEO: Mark Fones
Relationship with parent company: Administration, design, execution, construction and operation of projects services
Contracts with parent company: Not applicable
Address: L18, 109 St Georges Tce Perth WA 6000, Australia
Telephone: (61) 8 9230 5400
Fax: None

## DOKTOLAB A.Ş:

Type of company: Limited liability corporation
Capital: US$133,124
Ownership: 100% Doktor Tarsa Tarim Sanayi A.S.
Investment as % of SQM S.A.'s individual assets: 0.31945%
Corporate purpose: Physical and chemical analysis of soil, plants and specialty plant nutrients
Board of Directors: Ali Çetin Karakaya
Kamuran Pabuçcu
Elif Uluşahin
CEO: Ali B. Özman
Relationship with parent company: Laboratory analysis
Contracts with parent company: None
Address: Organize Sanayi Bolgesi, Ikinci Kisim, 22. Cadde No: 10, TR07100 Antalya, Turkey
Telephone: (90) 242 249 46 46
Fax: (90) 242 249 46 00

## DOKTOR TARSA TARIM SANAYI A.S.:

Type of company: Corporation
Capital: US$32,147,829
Ownership: 50% Soquimich European Holdings B.V.
50% Non-related parties
Investment as % of SQM S.A.'s individual assets: 0.63890%
Corporate purpose: Distribution, sales, marketing and production of specialty fertilizers
Board of Directors: Frank Biot*
Ali B. Özman
Esther Özman
CEO: Ali B. Özman
Relationship with parent company: Production and distribution
Contracts with parent company: Commercial agreement
Address: Organize Sanayi Bolgesi, Ikinci Kisim, 22. Cadde No: 10, TR07100 Antalya, Turkey
Telephone: (90) 242 249 46 46
Fax: (90) 242 249 46 00

## INTERNATIONAL TECHNICAL AND TRADING AGENCIES CO. W.L.L. (JORDAN):

Type of company: Limited liability corporation
Capital: US$141,000



Ownership: 50% Abu Dhabi Fertilizer Industries Co. W.L.L.
50% Non-related parties
Investment as % of SQM S.A.'s
individual assets: 0.05277%
Corporate purpose: Distribution, sales and marketing of specialty fertilizers
Board of Directors: Not applicable
CEO: Not applicable
Relationship with parent company: Not applicable
Contracts with parent company: Not applicable
Address: N/A
Telephone: (962) 796448244
Fax: (962) 796448244

## KORE POTASH PLC:

Type of company: Limited liability corporation
Capital: US$860,852
Ownership: 19.67% SQM S.A.
80.33% Non-related parties

Investment as % of SQM S.A.'s
individual assets: 0.60789%
Corporate purpose: Exploration of mineral resources and project development
Board of Directors: David Hathorn
Timothy Keating
José Antonio Merino M.
David Netherway
Bradley Sampson
Jonathan Trollip
CEO: Bradley Sampson
Relationship with parent company: Support
Contracts with parent company: None
Address: 25 Moorgate, London, United Kingdom EC2R 6AY
Telephone: (44) 20 7131 4000
Fax: None

## PLANTACOTE NV:

Type of company: Limited liability corporation
Capital: US$3,005,898
Ownership: 100% Doktor Tarsa Tarim Sanayi A.S.
Investment as % of SQM S.A.'s
individual assets: 0.31945%
Corporate purpose: Production, distribution, sales and marketing of specialty fertilizers
Board of Directors: Ali B. Özman
Patrick Vanbeneden
Frank Biot*
CEO: Toon Vanderhallen
Relationship with parent company: Production and distribution
Contracts with parent company: Commercial agreement
Address: Houtdok-Noordkaai 25a – 2030 Antwerp - Belgium
Telephone: (32) 3 203 97 17
Fax: (32) 3 203 97 72

## (OK) DOCTOCHEM TARIM SANAYI TICARET LTD.ŞTI.:



Type of company: Limited liability corporation
Capital: US$574,883
Ownership: 100% Doktor Tarsa Tarim Sanayi A.S.
Investment as % of SQM S.A.'s individual assets: 0.31945%
Corporate purpose: Production, distribution, sales and marketing of specialty fertilizers
Board of Directors: None
CEO: Ali B. Özman
Relationship with parent company: Production and distribution
Contracts with parent company: Commercial agreement
Address: Houtdok-Noordkaai 25a – 2030 Antwerp - Belgium
Telephone: (32) 3 203 97 17
Fax: (32) 3 203 97 72

## SQM EAST MED A.Ş:

Type of company: Corporation
Capital: US$186,959
Ownership: 50% Soquimich European Holdings B.V.
50% Non-related parties

Investment as % of SQM S.A.'s individual assets: 0,01531%
Corporate purpose: Production of specialty fertilizers
Board of Directors: Patrick Vanbeneden
Ali B. Özman
Esther Özman
CEO: Ali B. Özman
Relationship with parent company: Production
Contracts with parent company: Commercial agreement
Address: Antalya Serbest Bölgesi Liman Mahallesi, 1. Cadde 4. Sokak No:15, 07130 Konyaaltı/Antalya, Turkey
Telephone: (90 2) 422494646
Fax: (90 2) 422494600







## 7) B) INFORMATION ABOUT OTHER INVESTEES

## Joint Ventures or Joint Control

## ARPA SPECIALI S.R.L.:

Type of company: Limited liability corporation

Capital: US$24.022

Ownership: 50.48% Pavoni & C. SPA

Investment as % of SQM S.A.'s

individual assets: 0.00226%

Corporate purpose: Distribution, sales and marketing of specialty fertilizers

Board of directors: Sara Pavoni

Riccardo Carbone

Giulio Guastalla

CEO: Giulio Guastalla

Relationship with parent company: Distribution

Contracts with parent company: Commercial agreement

Address: Via Cremona 27 Int.5 46100 Mantova (MN)

Telephone: (39) 0376 262483

Fax: ___ (39) 0376 1994113

## COROMANDEL (SQM INDIA) P LTD.:

Type of company: Limited liability corporation

Capital: US$1,566,490

Ownership: 50% Soquimich European Holdings NV

50% Non-related parties

Investment as % of SQM S.A.'s

individual assets: 0.03853%

Corporate purpose: Production, distribution, sales and marketing of specialty fertilizers

Board of directors: Patrick Vanbeneden

Emmanuel De Marez

Narayanan Vellaya

CEO: S. Murthy

Relationship with parent company: Production and distribution

Contracts with parent company: Commercial agreement

Address: ___ Coromandel House 1-2-10, Sardar Patel Road, Secunderabad-500 003,

Andhra Pradesh, India

Telephone: 91-40-27842034

## QINGDAO SQM-STAR CROP NUTRITION CO. LTD.:

Type of company: Limited liability corporation

Capital: US$2,000,000

Ownership: 50% SQM Industrial S.A.

50% Non-related parties

Investment as % of SQM S.A.'s

individual assets: 0.08512%

Corporate purpose: Production, sales and marketing of soluble fertilizers

Board of directors: Li Xiang

Alfredo Doberti

Wan Taibin

Alvaro Fernandez



CEO: Li Xiang
Relationship with parent company: Production and distribution
Contracts with parent company: Commercial agreement
Address: No. 36, Road 7 Longquan River, Longquan Town, Jimo City, Qingdao
Municipality, Shandong Province, China
Telephone: (86) 532 809 65 366

## SICHUAN SQM-MIGAO CHEMICAL FERTILIZER CO. LTD.:

Type of company: Limited liability corporation
Capital: US$28,000,000
Ownership: 50% SQM Industrial S.A.
50% Miga Corporation

Investment as % of SQM S.A.'s
individual assets: 0.04895%
Corporate purpose: Production, distribution, sales and marketing of specialty fertilizers
Board of directors: Alfredo Doberti
Frank Biot*
Liu Yaqin
Sun Pingfu
CEO: Sun Pingfu
Relationship with parent company: Production and distribution
Contracts with parent company: Commercial agreement
Address: Huangjin Road, Dawan Town, Qingbaijiang District, Chengdu
Municipality, Sichuan Province, China
Telephone: (86) 532 809 65 366

## PAVONI & C. SPA.:

Type of company: Limited liability corporation
Capital: US$7,140,808
Ownership: 50% Soquimich European Holdings B.V.
50% Otros no relacionados

Investment as % of SQM S.A.'s
individual assets: 0.16866%
Corporate purpose: Production, distribution, sales and marketing of specialty fertilizers
Board of directors: Patrick Vanbeneden
Frank Biot*
Giuseppe Casubolo
Aldo Bonaccorsi
Giulio Guastalla
Sara Pavoni
CEO: Sara Pavoni
Relationship with parent company: Production and distribution
Contracts with parent company: Commercial agreement
Address: Corso Italia, 172, 95129 Catania (Ct)
Telephone: (39) 095 7931440
Fax: (39) 095 654512

## SQM VITAS BRASIL:

Type of company: Limited liability corporation
Capital: US$4,300,597
Ownership: 99.99% SQM Vitas FZCO
0.01% Non-related parties

Investment as % of SQM S.A.'s



individual assets:
Corporate purpose:
Board of directors:

CEO:
Relationship with parent company:
Contracts with parent company:
Address:

Telephone:
Fax:

## SQM VITAS HOLLAND:

Type of company:
Capital:
Ownership:

Investment as % of SQM S.A.'s individual assets:
Corporate purpose:
Board of directors:

CEO:
Relationship with parent company:
Contracts with parent company:
Address:

Telephone:
Fax:

## SQM VITAS FZCO:

Type of company:
Capital:
Ownership:

Investment as % of SQM S.A.'s individual assets:
Corporate purpose:
Board of directors:

CEO:
Relationship with parent company:
Contracts with parent company:
Address:
Telephone:
Fax:

## SQM VITAS PERÚ S.A.C.:

Type of company:
Capital:

0.131397%
Production, distribution and marketing of specialty plant nutrients
Patrick Vanbeneden
Karina Kuzmak-Bourdet
Alfredo Doberti
Leandro Ries
Production and distribution
Commercial agreement
Via Candeias, Km, 01, Sem Numero, Lote 4, Bairro Cia Norte, Candeias, Bahia – Brazil CEP 43,805 – 190, Caixa Postal 138
(55) 71 3602 3056
None

Limited liability corporation
US$114,390
50% Soquimich European Holdings NV
50% Non-related parties

0.03204%
Investment company
Soquimich European Holdings NV
Vitas Roullier S.A.S.
Not applicable
Support
Commercial agreement
Luna ArenA, Herikerbergweg 238, 1101 CM Amsterdam Zuid-Oost,
Netherlands
(31 20) 5755600
(31 20) 6730016

Free zone company
US$1,415,820
49.5% SQM Industrial S.A.
0.5% SQM S.A.
50% Non-related parties

0.22388%
Production, distribution and marketing of specialty plant nutrients
Patrick Vanbeneden
Karina Kuzmak-Bourdet
Frank Biot*
Patrick Vanbeneden
Production and distribution
Commercial Agreement
Jebel Ali Free Zone, PO Box 18222, Dubai, United Arab Emirates
(971 4) 8838506
(971 4) 8838507

Corporation
US$4,063,802



Ownership: 99.99999% SQM Vitas FZCO
0.00001% SQM Industrial S.A.

Investment as % of SQM S.A.'s
individual assets: 0.04804%
Corporate purpose: Production, distribution, sales and marketing of specialty fertilizers
Board of directors: Patrick Vanbeneden
Karina Kuzmak-Bourdet
Alfredo Doberti
CEO: Diego San Martin
Relationship with parent company: Production and distribution
Contracts with parent company: Commercial agreement
Address: Avenida Circunvalación del Club Golf Los Incas N°154, Oficina 1401,
Santiago de Surco, Lima, Peru
Telephone: (511) 611 2121
Fax: (511) 611 2121

## TERRA TARSA BV:

Type of company: Limited liability corporation
Capital: US$547,560
Ownership: 50% Doktor Tarsa Tarim Sanayi A.S.
50% Non-related parties

Investment as % of SQM S.A.'s individual assets: 0.15973%
Corporate purpose: Investment company
Board of directors: Ali B. Özman

CEO: Not applicable
Relationship with parent company: Support
Contracts with parent company: Commercial agreement
Address: Luna Arena, Herikerbergweg 238, 1101 CM Amsterdam Zuid-Oost, Netherlands
Telephone: (31 20) 5755600
Fax: (31 20) 6730016

## TERRA TARSA UKRAINE LLC:

Type of company: Limited liability corporation
Capital: US$602,091
Ownership: 100% Terra Tarsa BV
Investment as % of SQM S.A.'s
individual assets: 0.15973%
Corporate purpose: Production, distribution, sales and marketing of specialty fertilizers
Board of directors: Not applicable
CEO: Andrii Gogolev
Relationship with parent company: Production and distribution
Contracts with parent company: Commercial agreement
Address: 74800 Ukraine, Kakhovka, Pivdena str. 4
Telephone: (380) 5536-55-109

## TERRA TARSA DON LLC:

Type of company: Limited liability corporation
Capital: US$29,477



Ownership: 100% Terra Tarsa BV
Investment as % of SQM S.A.'s
individual assets: 0.15973%
Corporate purpose: Distribution, sales and marketing of specialty fertilizers
Board of directors: Not applicable
CEO: Alina Moiseeva
Relationship with parent company: Distribution
Contracts with parent company: Commercial agreement
Address: 344090 Russian Federation, Rostov-on-Don, Zorge str.17
Telephone: 7 (863) 300-76-27



## 8) INFORMATION ABOUT RELEVANT OR ESSENTIAL FACTS

## Relevant or Essential Facts Pertaining to SQM S.A.

The following events occurred or were reported as essential events or events of interest to the CMF, the Stock Exchanges and included on the Company’s website:

On January 8, 2019, it was informed that yesterday the resignation of CEO, Mr. Patricio de Solminihac became effective. As of today, Mr. Ricardo Ramos Rodriguez has assumed the position of CEO of the Company.

On January 23, 2019, it was informed that today the Board of Directors of SQM approved the following SQM Board Protocol for the presentation and use of sensitive information:

## SQM BOARD PROTOCOL FOR THE PRESENTATION AND USE OF SENSITIVE INFORMATION

## I. Background

(a) On July 26, 2017, the Board of Directors of Sociedad Química y Minera de Chile S.A. (respectively the "Board of Directors" and "the Company") approved a list of the main competitors, suppliers and customers of the Company, where Tianqi Lithium Corporation ("Tianqi") was included as a competitor of the Company.

(b) In May 2018, Tianqi and Nutrien Ltd. announced that Tianqi agreed to acquire from Nutrien Ltd. the amount of 62,556,568 Series A shares of the Company, which corresponds to approximately 24% of the total shares issued by the Company.

(c) On August 27, 2018, Tianqi and the Chilean National Economic Prosecutor Office (the "FNE") signed an out-of-court settlement (the "Agreement"), pursuant to which the FNE sought to implement behavioral measures in order to (i) maintain the competitive conditions of the lithium market, (ii) mitigate the risks described in the Agreement and (iii) limit the possibility of accessing certain information related to the Company and its subsidiaries, which is defined as sensitive under the Agreement (the "Sensitive Information") by Tianqi (the "Purpose").

(d) The Antitrust Court (the "TDLC") approved the Agreement by resolution of October 4, 2018, which was finalized on October 30, 2018. In Agreement approval process, the Company expressed its concerns to the TDLC regarding the measures described in the Agreement as (i) not effectively resolving the risks that Tianqi and the FNE wanted to mitigate, (ii) not being correctly oriented to avoid the access to Sensitive Information that, could damage the Company and the correct functioning of the market when in the possession of a competitor, and (iii) contradicting Law 18,046 on Corporations (the "Corporations Act") and other regulatory bodies applicable to the Company.

(e) On December 5, 2018, the Company learned that Inversiones TLC SpA, a subsidiary of Tianqi Lithium Corporation, acquired 62,556,568 Series A shares of the Company, representing approximately 23.77% of the total shares issued by the Company (the "Acquisition"). Before the Acquisition, and after the approval of the Agreement by the TDLC, the Board of Directors had deemed it necessary to adopt measures aimed at achieving the Purpose, avoiding greater points of contact between the Sensitive Information and Tianqi, in a complementary manner, and not contradictory with the Agreement.

(f) In consideration of the foregoing, on January 23, 2019, the Board of Directors unanimously resolved to adopt, the following protocol on the presentation and use of information in the Board of Directors, in the committees of the Board of Directors and in the Boards of Directors of Company’s subsidiaries (the "Protocol"):

## II. Protocol

1. Managing of information in the Board of Directors



1.1. The Board of Directors has defined that the directors and senior executives of the Company have the duty and responsibility to cooperate with the fulfillment of the Purpose, subject to compliance with the Corporations Act and other applicable regulations.

1.2. Therefore, in order for the Board of Directors to comply with its purposes and duties according to the Purpose, the Board of Directors agrees to delegate - in accordance with article 40, subsection 2 of the Public Limited Companies Law - all its powers in relation to administration, knowledge and resolution of the matters that refer to the lithium business of the Company, which means knowledge of Sensitive Information, in the committee indicated below.

1.3. Directors nominated or elected by a Competitor Shareholder (the "Directors elected by Competitor") have the right to receive Sensitive Information that has been dealt with or known in the Board of Directors or in any of its committees. Notwithstanding this, in the event that a Director chosen by Competitor wants to access Sensitive Information, he or she must request it in writing from the CEO of the Company. The CEO must inform the Head of the Antitrust Division of the FNE, the event that Sensitive Information is being requested by the Director elected by Competitor.

1.4. For the purposes of section 1.3 above, a "Competitor Shareholder" is understood to be one who has been identified as a competitor of the Company in the lithium business, by any of the following persons or entities: (i) the shareholder himself, (ii) the Board of Directors, (iii) the FNE, the TDLC or any other antitrust authority that exercises jurisdiction over the Company or said shareholder, or (iv) the Agreement or any other instrument that modifies or replaces it.

## 2. Lithium Committee

2.1. The Board of Directors creates a Lithium Committee (the "Committee"). The Board delegates to the Committee the power to impose, review and manage all Sensitive Information; assist and guide senior executives of the Company in the ordinary management of the lithium business; review and recommend necessary policies and strategies related to the lithium business to the Board; and represent the Company, with the authority to evaluate, negotiate and subscribe acts, contracts or operations related to the lithium business and leading to knowledge of Sensitive Information.

2.2. The delegation of powers to the Committee does not imply the limitation or revocation of powers granted prior to this date by the Company that have not been specifically limited or revoked and, in addition, may coexist with future delegations of powers made by the Board, without implying a limitation of these, unless specifically agreed otherwise.

2.3. The Committee may be composed of all the directors of the Company who so express during the first meeting of the Board of Directors held after any Shareholders Meeting in which the Board of Directors has been renewed. Upon the request of a Director Elected by Competitor to be part of the Committee, the CEO must communicate this circumstance to the Head of the FNE Antitrust Division. Among the members of the Committee, a chairman must be elected, who will have the deciding vote. As agreed in advance by the shareholders at the Ordinary Shareholders Meeting of the Company, the members of the Committee may be remunerated for their duties related to the Committee,

2.4. The Committee will meet monthly, immediately following the ordinary meetings of the Board of Directors or as often as agreed by the members of the Committee. At the request of the Chairman of the Committee or the CEO, the Committee may meet in an extraordinary manner, by sending an email notice to its members at least 24 hours in advance.

2.5. Necessary information will be available to the members of the Committee, but not the Board. The Company must ensure that such information is of a restricted nature and is only available to the members of the Committee and the executives of the Company who should receive it. With respect to Sensitive Information, The Committee is



fully empowered to establish all types of remote or online access restrictions, so that such information can only be received by members of the Committee.

## 3. Boards of Directors of Subsidiaries

3.1. The Board of Directors does not contemplate making changes in the manner in which the boards of the Company's subsidiaries are carried out and structured.

3.2. The directors of the Company may attend the meetings of the boards of the Company's subsidiaries with the right to speak, and they will be empowered to impose on the books and records of said subsidiaries. Upon the requirement of a Director Elected by Competitor to participate in the board of a subsidiary, the CEO must inform the Head of the FNE Antitrust Division about such circumstance.

3.3. The Board of Directors agrees to authorize the full exchange of information between its subsidiaries SQM Salar S.A. and SQM Potasios S.A., in order to allow the executives of the Company and the members of the board of both subsidiaries to have consolidated and detailed information of their businesses, for the best management of these and in the best interest of the Company, in accordance with the guidelines established by the Board from time to time.

## 4. Right to Information

4.1. The directors of the Company have the right to be fully informed of everything related to the Company at any time in a documented manner, and by the CEO.

4.2. The CEO cannot deny Sensitive Information to a director, nor information that has been treated or known in the Committee or in subsidiaries of the Company, unless this is ordered by a competent authority.

## 5. Incidents Report

5.1. Given the risks identified by the FNE with respect to the Acquisition, any director, senior executive or employee of the Company is obliged to inform the CEO and the Compliance Officer of the Company about any breach of this Protocol or the Agreement.

5.2. It will be the responsibility of each Director Elected by Competitor, to inform the CEO as soon as he becomes aware of having known Sensitive Information involuntarily.

5.3. The CEO, after becoming aware of any of the circumstances indicated in sections 5.1 or 5.2 above, must communicate this circumstance to the head of the FNE Antitrust Division, as well as adopt the measures he deems necessary to prevent or mitigate a damage to the Company.

5.4. The communications that under this Protocol are made to the head of the FNE Antitrust Division, do not imply that the Company assumes any type of responsibility or obligations under the Agreement.

5.5. This Protocol may be modified or rendered ineffective by the Board of Directors, at any time, as it may decide. In this case, it will be communicated according to section 7 below.

## 6. Deferred Term

The term of the present Protocol shall be indefinite starting from the time when the next Ordinary Shareholders Meeting of the Company is concluded.

## 7. Communication



The Board of Directors agreed that this Protocol is (i) informed as an essential fact to the Commission for the Financial Markets, (ii) informed to the Head of the FNE Antitrust Division, (iii) informed and distributed to each of the Vice Presidencies and management of the Company and its subsidiaries, and (iv) published immediately on the Company's website www.sqm.com.

On March 11, 2019, it was informed that CEO, Ricardo Ramos, held an interview with local press. As part of this discussion, he commented on the topics described below.

Ricardo Ramos stated, “The objectives of the Company in the lithium market have not changed. We are, and we will continue to be one of the main players in the lithium industry. Company decisions will not be managed by market share goals; market share is just the relation between our sales volumes and the market demand at any given time. We will continue being one of the major players in the lithium market as we have the capacity, the team, the technology, the financial resources and high-quality natural resources necessary in place.”

In 2019, it is expected that market demand will reach approximately 350,000 metric tons, well over the market demand in 2018. We believe our sales volumes in 2019 will be slightly higher than those reported in 2018, probably under 50,000, and definitely less than 60,000 metric tons. We expect to produce over 60,000 metric tons in 2019.

Mr. Ramos continued by saying, “We are going to sell the volumes defined by our commercial and production strategy. The price is and will be the balance between supply and demand. SQM is not going to limit its sales volumes in order to sustain prices. In any case, we are optimistic about prices, if we consider the growth rates that are expected for demand in the coming years”. Additionally, the Company will rebuild inventories, allowing us to have two to three months of inventory. Mr. Ramos continued by saying, “over the last few years we have been selling more than our installed capacity, pressuring our lithium production process along with our entire supply chain, taking away the flexibility needed to respond to our customers. Producing levels slightly higher than what we expect to sell this year will allow us to recover part of our inventories, which will give us greater flexibility to face the market and the expansion challenges of our plants”.

We expect our installed capacity in Chile to reach 120,000 metric tons by the end of 2020 \( ^{2} \) , an increase of 50,000 metric tons compared to our current capacity of 70,000 metric tons. From that point, we will continue to work to reach an installed capacity of 180,000 metric tons in Chile in the future. The capex associated with this expansion should be in the range of approximately US4,000 per ton, or about US400 million. From this capacity, we expect to sell annually 150,000 metric tons of lithium by 2025, which is more than triple our sales volumes today. We expect market demand will be at least 1 million metric tons in 2025. Of course, we continue to invest in the Mount Holland lithium project in Australia as well.

We have increased our long-term debt in order to finance the expansion projects related to lithium, nitrates and iodine. Our debt to equity ratio has increased slightly. However, we have a strong balance sheet with low debt levels in relation to our cash generation and high liquidity, this will allow us to embark on our expansion goals without problem.

On March 27, 2019, it was informed that SQM announced today that in accordance with Articles 9 and 10, and General Rule N° 30 of the Commission for the Financial Market (CMF), it informs the following as an essential fact (hecho esencial):

Today, the Board of Directors of SQM in an Ordinary Board Meeting unanimously agreed to recommend to the shareholders at the next Annual Ordinary Shareholders’ Meeting which is to be held on April 25, 2019, the payment of a final dividend representing 100% of the Company’s 2018 net income. The final dividend will be calculated on a distributable net income of US$439,829,980, which corresponds to US$1.67111 per share. Nevertheless,



US$1.25837 per share must be deducted from the final dividend, as it was already paid in the form of interim dividends, leaving balance due of US$0.41274 per share.

Said amount shall be paid in the equivalent in Chilean national currency according to the value of the "Observed Dollar" or "US Dollar" that appears published in the Official Gazette on April 25, 2019. The payment of these dividends shall be made in favor of the Company's shareholders, in person or through their duly authorized representatives, starting at 9:00am on May 9, 2019, who are registered with the respective registry on the fifth business day before the day on which the payment shall be made.

On April 11, 2019, it was informed that today the administration of SQM became aware of the agreement entered into between the Pampa Group and Inversiones TLC SpA, a subsidiary of Tianqi Lithium Corp. The Agreement was made public by Sociedad de Inversiones Pampa Calichera S.A. to the Chilean market through an essential fact (hecho esencial) according to the Chilean regulation. A copy of the agreement is published on our website at http://s1.q4cdn.com/793210788/files/doc_news/2019/March/PR_ShareholdersAgreement_11abr2019_ing.pdf.

On April 15, 2019, it was informed that today the Extraordinary Board of Directors of SOM approved to amend the SQM Board Protocol for the presentation and use of sensitive information. A copy of the protocol is published on our website at http://s1.q4cdn.com/793210788/files/doc_news/2019/March/PR_Information-Protocol_15abr2019_ing.pdf.

On April 17, 2019, it was informed that SQM announced today that it has filed its Annual Report on Form 20-F for the fiscal year ended December 31, 2018, with the U.S. Securities and Exchange Commission (the “SEC”).

SQM’s Form 20-F can be accessed by visiting either the SEC’s website at www.sec.gov or the investor relations section of the Company’s website at www.sqm.com.

On April 25, 2019, it was informed that SQM announced the following information:

1. Today, the Company held its 44th Annual General Meeting and agreed to, among others, the following items:

(a) To approve the Company’s Balance Sheet, the Financial Statements, the Annual Report, the Account Inspectors’ Report, and the External Auditors’ Report for the year ending on December 31, 2018.

(b) To appoint PricewaterhouseCoopers Consultores, Auditores y Compañía Limitada as the Company’s External Auditors for the period January 1 through December 31, 2019.

(c) To approve the distribution of a final dividend as recommended by the Board of Directors and communicated as an essential fact (hecho esencial) on March 27, 2019.

(d) Company Board elections, it was decided that the Board would be composed of the following members: Gonzalo Guerrero Yamamoto, Georges de Bourguignon Arndt, Francisco Ugarte Larraín, Robert J. Zatta, Hernán Büchi Buc, Patricio Contesse Fica, Laurence Golborne Riveros and Alberto Salas Muñoz, with the last two members being independent.

(e) To approve the remuneration structure for the Board members, and the members of the Board committees, and expenses associated with each.

2. In an extraordinary Board meeting on the same day, the Board agreed to appoint Mr. Alberto Salas Muñoz as Chairman of the Board; and Mr. Patricio Contesse Fica as Vice Chairman of the Board.

3. At the same time, the Board agreed that the composition of the Board Committees would be as follows:

(a) Audit/Directors’ Committee: Georges de Bourguignon Arndt, Laurence Golborne Riveros and Alberto Salas Muñoz;

(b) Corporate Governance Committee: Hernán Büchi Buc, Patricio Contesse Fica and Francisco Ugarte Larraín



Safety, Health and Environment Committee: Patricio Contesse Fica, Gonzalo Guerrero Yamamoto and Robert J. Zatta.

On April 26, 2019, it was informed that SQM held its Annual General Shareholders’ Meeting. During the meeting and discussing later that day with the press that covered the meeting, Alberto Salas, the Chairman of the Board, and Ricardo Ramos, CEO of the Company, commented on the Company’s performance.

SQM believes that the lithium market remains strong, and that the market could reach one million MT in 2025, at which time SQM hopes to have a market share of approximately 15-20%, given its ambitious growth plans. It is expanding its lithium carbonate plant from 70,000 MT of capacity today to approximately 180,000 MT in the future. The Company also plans to increase its lithium hydroxide capacity in Chile by approximately 16,000 MT, which will include two plants of 8,000 MT of capacity each. The capex associated with this lithium hydroxide expansion is expected to be around US100 million. SQM keeps moving forward with its expansion plans in Australia. As the Company has previously disclosed, the Company’s management believes that the lithium market will see increased supply this year, impacting SQM’s ability to maintain price premiums in 2019 compared to its competitors and that lithium sales volumes in 2019 are expected to be less than 50,000 MT. In addition, the Company expects first quarter 2019 lithium results compared to the same period last year to be adversely affected as a result of i) the previously disclosed increases in costs related to the CORFO lease payment rates, which became effective in April 2018, as the costs reported for the first quarter 2018 did not consider the new lease payment structure, and ii) the loss of previous price premiums compared to our competitors, which we expect will result in prices being over 10% lower during the first quarter this year compared to the first quarter 2018. Sales volumes in the first quarter are expected to be similar to those reported during the first quarter last year.

The iodine market looks strong; prices recently surpassed US$25/kg. We recently submitted an application for an environmental permit for the Tente en el Aire project to modify our existing operations in Nueva Victoria, Chile. Our current production capacity of iodine is 14,000 MT/year, and this permit will allow us to increase capacity to support the market growth.

As we have stated in the past, as a result of production limitations as we focus our production efforts in the Salar de Atacama on increasing lithium yields, our sales volumes for 2019 in the potassium chloride business line, will be approximately 500,000 MT. During the first quarter 2019, we expect sales volumes to be significantly lower than sales volumes reported during the first quarter 2018. The lower production of potassium chloride during 2019, should not impact SPN sales volumes during the year. We have seen new supply enter the potassium nitrate market recently, and therefore we expect to see lower prices in 2019 when compared to prices reported in 2018, similar to prices reported in the fourth quarter 2018. During the first quarter 2019, sales volumes are expected to be similar to those reported during the same period last year. The potassium nitrate market is expected to remain strong this year, and we believe it could grow approximately 6%.

On April 26, 2019, it was informed that the Company announced today that it intends, subject to market and other conditions, to offer senior unsecured notes to qualified institutional buyers in the United States in accordance with Rule 144A under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and to persons outside the United States in accordance with Regulation S under the Securities Act.

SQM currently expects to use the net proceeds from the offering of the notes for general corporate purposes, including funding its capital expenditure program and reducing its outstanding indebtedness.

The notes to be offered have not been and will not be registered under the Securities Act or any state or other jurisdiction’s securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state or other jurisdictions’ securities laws.



This press release shall not constitute an offer to sell or the solicitation of an offer to buy the notes or any other securities, nor shall there be any offer, solicitation or sale of the notes or any other securities in any state or other jurisdiction in which such an offer, solicitation or sale would be unlawful.

On May 2, 2019, it was informed that the Company announced today that it had agreed to issue and sell US$450 million principal amount of its senior unsecured notes due 2029. The notes will have an annual interest rate of 4.25%, and the transaction is expected to close on May 7, 2019, subject to customary closing conditions.

SQM currently expects to use the net proceeds from the offering of the notes for general corporate purposes, including capital expenditure and refinancing of existing debt.

The notes are being sold to qualified institutional buyers in the United States in accordance with Rule 144A under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and to persons outside the United States in accordance with Regulation S under the Securities Act. The notes have not been and will not be registered under the Securities Act or any state or other jurisdiction’s securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state or other jurisdictions’ securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the notes or any other securities, nor shall there be any offer, solicitation or sale of the notes or any other securities in any state or other jurisdiction in which such an offer, solicitation or sale would be unlawful.

On May 7, 2019, it was informed that today the Company issued and sold on the international markets US$450 million principal amount of its senior unsecured notes due 2029 with an annual interest rate of 4.25%.

SQM currently expects to use the net proceeds from the offering of the notes for general corporate purposes, including capital expenditure and refinancing of existing debt.

The notes are being sold to qualified institutional buyers in the United States in accordance with Rule 144A under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and to persons outside the United States in accordance with Regulation S under the Securities Act. The notes have not been and will not be registered under the Securities Act or any state or other jurisdiction’s securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state or other jurisdictions’ securities laws.

On May 22, 2019, it was informed that SQM announced in accordance with Articles 9 and 10 of Chilean Market Securities Law and in the form of essential fact (hecho esencial) that today the Board of Directors unanimously approved the following:

To pay an interim dividend equal to US$0.30598 per share, to be charged against 2019 retained earnings. This amount shall be paid in the equivalent in Chilean pesos according to the value of the "Observed Dollar" or "US Dollar" that appears published in the Official Gazette on May 29, 2019.

This shall be paid to the corresponding shareholders, in person or through their duly authorized representatives, starting at 9:00am on June 12, 2019 to shareholders who are registered on the shareholders’ registry of the Company five business days prior to the payment date.

On May 22, 2019, it was informed that Wesfarmers and Kidman Resources (Kidman), the latter being the owner of 50% of the Mount Holland Lithium Project located in Western Australia, have announced the execution of a scheme implementation deed (SID) where Wesfarmers will acquire 100 per cent of the outstanding shares in Kidman for $1.90 cash per share, or approximately AUD776 million (US$535 million). This transaction is expected to be completed by September this year.



In addition, Wesfarmers and SQM announced that they have entered into a Commitment Deed modifying the Mt Holland lithium project joint venture agreement between SQM and Kidman related to certain technical and commercial matters. These modifications will become effective once the transaction between Wesfarmers and Kidman is completed. The Commitment Deed, contains certain obligations, including that SQM has agreed not to enter into discussions with any party proposing to make an alternative offer for Kidman. The commitment deed satisfies one of the conditions to Wesfarmers entering into a SID to acquire Kidman. The Commitment Deed will terminate if Kidman’s board recommends a better offer for 100% of the shares, or if the SID between Wesfarmers and Kidman is terminated without Wesfarmers closing the transaction.

The CEO of SQM, Ricardo Ramos, commented, “Wesfarmers is a conglomerate based in Western Australia, with vast experience in industrial projects across Australia. We are sure that its entry as partners into the Mt Holland project, as well as the agreements reached with them recently, will be beneficial to the development of the Mt. Holland project.” He then added, “Kidman has been our partner for the past 18 months. Its support to SQM and the Mt Holland project has been key to getting the project where it is today.”

On August 21, 2019, it was informed that SQM announced in accordance with Articles 9 and 10 of Chilean Market Securities Law and in the form of essential fact (hecho esencial) that today the Board of Directors approved the following:

To pay an interim dividend equal to US$0.26669 per share, to be charged against 2019 retained earnings. This amount shall be paid in the equivalent in Chilean pesos according to the value of the "Observed Dollar" or "US Dollar" that appears published in the Official Gazette on August 30, 2019.

This shall be paid to the corresponding shareholders, in person or through their duly authorized representatives, starting at 9:00am on September 12, 2019 to shareholders who are registered on the shareholders' registry of the Company five business days prior to the payment date.

On September 30, 2019, it was informed that today the Extraordinary Board of Directors of SQM approved to amend the SQM Board Protocol for the presentation and use of sensitive information, previously approved by the Board on April 15, 2019, as follows:

## SQM BOARD PROTOCOL FOR THE PRESENTATION AND USE OF SENSITIVE INFORMATION

Today, the Board of Directors of SQM (the “Board” and the “Company” respectively) approved to amend the SQM Board Protocol for the presentation and use of sensitive information in the Board and its Committees, and in the boards of SQM’s subsidiaries, approved on April 15, 2019, (the “Protocol”) as follows:

## 1. Managing of information in the Board of Directors

1.1 The Board of Directors has defined that the directors and main executives of the Company have the duty and responsibility to comply with the Company's Fair Competition Policy (the "Policy") and cooperate with the objective of the agreement signed on August 27, 2018, between Tianqi Lithium Corporation and the Chilean National Economic Prosecutor Office (the "Agreement"), which sought to implement behavioral measures in order to (i) maintain the competitive conditions of the lithium market, (ii) mitigate the risks described in the Agreement



and (iii) limit the possibility of accessing certain information related to the Company and its subsidiaries, which is defined as sensitive under the Agreement (the "Sensitive Information") \( ^{3} \) , by Tianqi.

1.2 According to the Chilean Corporations Act, all of the Company’s Directors, including those nominated or elected by a Competitor Shareholder, have the right to receive all Company information including the Sensitive Information.

1.3 For the purposes of this Protocol, a "Competitor Shareholder" is understood to be one who has been identified as a competitor of the Company in the lithium business, by any of the following persons or entities: (i) the shareholder himself, (ii) the Board of Directors, (iii) the Chilean National Economic Prosecutor Office (the "FNE"), the The Antitrust Court (the "TDLC") or any other antitrust authority that exercises jurisdiction over the Company or said shareholder, or (iv) the Agreement or any other instrument that modifies or replaces it.

1.4 It will correspond to the Risk and Compliance Officer of the Company (the “Compliance Officer”) to resolve any doubt or discrepancy about whether certain information corresponds or not to Sensitive Information. In any case, Sensitive Information shall not be understood as that which at the time of being requested was legitimately available to the general public.

## 2. Board of Directors of Subsidiaries

2.1 The Board of Directors does not contemplate making changes in the manner in which the boards of the Company's subsidiaries are carried out and structured.

2.2 The directors of the Company can attend the meetings of the boards of the Company's subsidiaries with the right to comment and will have the access to the books and records of said subsidiaries.

2.3 The Board of Directors agrees to authorize the full exchange of information between its subsidiaries SQM Salar S.A. and SQM Potasio S.A., in order to allow the executives of the Company and the board directors of both subsidiaries to have consolidated and detailed information of their businesses, for their best management and in the best interest of the Company, in accordance with the guidelines established by the Board from time to time.

## 3. Right to Information

3.1 The directors of the Company have the right to be fully informed by the CEO of the Company, of everything related to the Company performance at any time in a documented manner.

3.2 Notwithstanding the provisions of sections 1.2 and 3.1 of this Protocol, any request for Sensitive Information that is made outside of a board session by a director of the Company elected by a Competing Shareholder must be made to the CEO or another chief executive of the Company notifying the CEO, the latter must report to the



Compliance Officer both the Sensitive Information that has been requested, and the Sensitive Information that has been given, for its timely registration.

3.3 The CEO cannot deny Sensitive Information to a director, nor information that has been treated or known in the Committee or in subsidiaries of the Company, unless this is required by the FNE, TDLC, the Commission for the Financial Market (the “CMF”), or any other governmental or judicial authority with the legal power to request such information.

## 4. Incident Reports

Given the risks of the Agreement, any director or senior executive of the Company is obliged to inform the Compliance Officer of the Company about any breach of this Protocol as soon as reasonably possible.

## 5. Clarifications

This Protocol does not constitute a change to the Policy, but complements it. Notwithstanding the provisions of paragraph 1.4 above, any doubt, discrepancy or difficulty that arises due to the application, compliance or interpretation of the Protocol must be reported to the Compliance Officer in order to inform the Company’s Directors Committee to promptly submit a solution proposal to the Board of Directors.

## 6. Annual report, audit and training

6.1 The Compliance Officer must report to the Board of Directors at least once a year on the compliance with the Protocol and ensure that the Company's Internal Audit audits its compliance.

6.2 The Compliance Officer shall also ensure that the trainings that are carried out according to the Policy and the Training Procedure of the Company's Ethics and Compliance Program, account for the purpose and the main obligations that this Protocol contemplates for the directors and Company's executives.

## 7. Deferred Term and Modifications

7.1 The term of the present Protocol shall be indefinite starting from today.

7.2 This Protocol can be modified or dissolved at any time by the Board of Directors, according to its discretion. If this happens, it will be communicated as outlined in section 8.

## 8. Communication

The Board of Directors agreed that this Protocol is (i) informed as an essential fact to the Commission for the Financial Markets, (ii) informed to the Head of the FNE Compliance Inspection Unit, (iii) informed and distributed to each of the Vice Presidencies and management of the Company and its subsidiaries, and (iv) published immediately on the Company's website www.sqm.com.

On November 20, 2019, it was informed that SQM announced in accordance with Articles 9 and 10 of Chilean Market Securities Law and in the form of essential fact (hecho esencial) that today the Board of Directors approved the following:

To pay an interim dividend equal to US$0.22987 per share, to be charged against 2019 retained earnings. This amount shall be paid in the equivalent in Chilean pesos according to the value of the "Observed Dollar" or "US Dollar" that appears published in the Official Gazette on November 29, 2019.

This shall be paid to the corresponding shareholders, in person or through their duly authorized representatives, starting at 9:00am on December 12, 2019 to shareholders who are registered on the shareholders' registry of the Company five business days prior to the payment date.



On December 27, 2019, it was informed that yesterday, December 26, 2019, SQM was served with the decision by the First Environmental Court of Antofagasta, issued in the case R-17-2019, on a claim against the Chilean Environmental Authority (SMA) resolution dated January 7, 2019, which approved the environmental compliance plan presented by SQM Salar S.A.

The First Environmental Court has estimated that the environmental compliance plan presented by SQM Salar S.A., and approved by the SMA, does not comply with certain proposed measures of the completeness and efficiency requirements demanded by the environmental legislation. The company regrets this decision and is convinced that the compliance plan -carefully evaluated by the competent authorities- safeguards the protection of the environment. SQM Salar S.A. is also evaluating the next courses of action available to the company by law.

SQM reaffirms its commitment to the protection of the environment and the Salar de Atacama, along with respect for the neighboring communities. In addition, the company is looking forward to its collaboration with the environmental authorities and incorporating the improvements pertinent to continuous strengthening of its environmental management system.

With the information available to the company at the moment, SQM has not made any adjustments to its production or sales plans.

## Relevant or Essential Facts Pertaining to Soquimich Comercial S.A. (SQMC)

On March 26, 2019, it was reported that the Board of Directors of the Company accepted the voluntary resignation presented by the CEO of the Company, Mr. Daniel Pizarro Rosas, as of May 24, 2019. The Board of Directors recognized and appreciated the important contributions made by Mr. Pizarro to the Company during the time he served as its top executive.

On April 23, 2019, it was reported that the Board of Directors of the Company appointed Mr. Rodrigo Eduardo Real Ibaceta as it legal representative as of May 25, 2019.

## 9) SUMMARY OF COMMENTS AND PROPOSALS BY SHAREHOLDERS AND THE DIRECTORS' COMMITTEE

According to Chilean Law No, 18,046, section 3, article 74, there have been no comments or proposals from SQM’s shareholders or Directors’ Committee regarding the Company’s business.



10) FINANCIAL REPORTS

10) A) FINANCIAL REPORTS OF THE REPORTING ENTITY

Report of Independent Auditors



INDEPENDENT AUDITOR'S REPORT

Santiago, March 2, 2020

To the Shareholders and Directors
Sociedad Química y Minera de Chile S.A.

We have audited the accompanying consolidated financial statements of Sociedad Química y Minera de Chile S.A. and subsidiaries, which comprise the consolidated statements of financial position as of December 31, 2019 and 2018, and the consolidated statements of income, comprehensive income, changes in equity and cash flows for the years then ended and the related notes to the consolidated financial statements.

Management's responsibility for the consolidated financial statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards (IFRS). This responsibility includes the design, implementation and maintenance of a relevant internal control for the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

## Auditor's responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards in Chile. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatements of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Consequently, we do not express such an opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.



Santiago, March 2, 2020
Sociedad Química y Minera de Chile S.A.
2

## Opinion

In our opinion, the aforesaid consolidated financial statements present fairly, in all material respects, the financial position of Sociedad Química y Minera de Chile S.A. and subsidiaries as of December 31, 2019 and 2018, and the results of their operations and cash flows for the years then ended, in accordance with International Financial Reporting Standards (IFRS).



P.A. de la Huerta, Howard Cooper

Digitally signed by Bruno Rogine Malb KUT: 25-177-540-7. The corresponding certification can be verified in the electronic version of the document.



## Table of Contents – Consolidated Financial Statements

CONSOLIDATED CLASSIFIED STATEMENTS OF FINANCIAL POSITION ..... 144
CONSOLIDATED CLASSIFIED STATEMENTS OF FINANCIAL POSITION ..... 145
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ..... 147
CONSOLIDATED STATEMENTS OF CASH FLOWS ..... 148
CONSOLIDATED STATEMENTS OF CASH FLOWS ..... 149
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY ..... 150
NOTE 1 IDENTIFICATION AND ACTIVITIES OF THE COMPANY AND SUBSIDIARIES ..... 153
1.1 HISTORICAL BACKGROUND ..... 153
1.2 MAIN DOMICILE WHERE THE COMPANY PERFORMS ITS PRODUCTION ACTIVITIES ..... 153
1.3 CODES OF MAIN ACTIVITIES ..... 153
1.4 DESCRIPTION OF THE NATURE OF OPERATIONS AND MAIN ACTIVITIES ..... 153
1.5 OTHER BACKGROUND ..... 155
NOTE 2 BASIS OF PRESENTATION FOR THE CONSOLIDATED FINANCIAL STATEMENTS ..... 157
2.1 ACCOUNTING PERIOD ..... 157
2.2 CONSOLIDATED FINANCIAL STATEMENTS ..... 157
2.3 BASIS OF MEASUREMENT ..... 157
2.4 ACCOUNTING PRONOUNCEMENTS ..... 158
2.5 BASIS OF CONSOLIDATION ..... 160
2.6 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES ..... 163
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES ..... 164
3.1 CLASSIFICATION OF BALANCES AS CURRENT AND NON-CURRENT ..... 164
3.2 FUNCTIONAL AND PRESENTATION CURRENCY ..... 164
3.3 FOREIGN CURRENCY TRANSLATION ..... 164
3.4 CONSOLIDATED STATEMENT OF CASH FLOWS ..... 166
3.5 FINANCIAL ASSETS ..... 166
3.6 ACCOUNTING POLICY FOR FINANCIAL LIABILITIES ..... 168
3.7 RECLASSIFICATION OF FINANCIAL INSTRUMENTS ..... 168
3.8 FINANCIAL INSTRUMENT DERECOGNITION ..... 168
3.9 DERIVATIVE AND HEDGING FINANCIAL INSTRUMENTS ..... 168
3.10 DERIVATIVE FINANCIAL INSTRUMENTS NOT CONSIDERED AS HEDGES ..... 170
3.11 DEFERRED ACQUISITION COSTS FROM INSURANCE CONTRACTS ..... 170
3.12 CLASSIFICATION LEASES ..... 170
3.13 INVENTORY MEASUREMENT ..... 172
3.14 TRANSACTIONS WITH NON-CONTROLLING INTERESTS ..... 173
3.15 RELATED PARTY TRANSACTIONS ..... 173
3.16 PROPERTY, PLANT AND EQUIPMENT ..... 173
3.17 DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT ..... 174
3.18 GOODWILL ..... 174
3.19 INTANGIBLE ASSETS OTHER THAN GOODWILL ..... 175
3.20 RESEARCH AND DEVELOPMENT EXPENSES ..... 176
3.21 EXPLORATION AND EVALUATION EXPENSES ..... 176
3.22 IMPAIRMENT OF NON-FINANCIAL ASSETS ..... 176
3.23 MINIMUM DIVIDEND ..... 177



3.24 EARNINGS PER SHARE.....177
3.25 BORROWING COST.....177
3.26 OTHER PROVISIONS.....178
3.27 OBLIGATIONS RELATED TO EMPLOYEE TERMINATION BENEFITS AND PENSION COMMITMENTS.....178
3.28 COMPENSATION PLANS.....178
3.29 REVENUE RECOGNITION.....179
3.30 FINANCE INCOME AND FINANCE COSTS.....179
3.31 CURRENT INCOME TAX AND DEFERRED.....180
3.32 SEGMENT REPORTING.....180
3.33 PRIMARY ACCOUNTING CRITERIA, ESTIMATES AND ASSUMPTIONS.....181
3.34 ENVIRONMENT.....181
NOTE 4 CHANGES IN ACCOUNTING ESTIMATES AND POLICIES.....182
4.1 CHANGES IN ACCOUNTING ESTIMATES.....182
4.2 CHANGES IN ACCOUNTING POLICIES.....182
NOTE 5 FINANCIAL RISK MANAGEMENT.....183
5.1 FINANCIAL RISK MANAGEMENT POLICY.....183
5.2 RISK FACTORS.....183
5.3 RISK MEASUREMENT.....186
NOTE 6 BACKGROUND OF COMPANIES INCLUDED IN CONSOLIDATION.....187
6.1 PARENT'S STAND-ALONE ASSETS AND LIABILITIES.....187
6.2 PARENT ENTITY.....187
NOTE 7 BOARD OF DIRECTORS, SENIOR MANAGEMENT AND KEY MANAGEMENT PERSONNEL.....188
7.1 BOARD OF DIRECTORS AND SENIOR MANAGEMENT.....188
7.2 KEY MANAGEMENT PERSONNEL COMPENSATION.....190
NOTE 8 BACKGROUND ON COMPANIES INCLUDED IN CONSOLIDATION AND NON-CONTROLLING INTERESTS.....191
8.1 BACKGROUND ON COMPANIES INCLUDED IN CONSOLIDATION.....191
9.3 OTHER INFORMATION.....203
9.4 DISCLOSURES ON INTEREST IN ASSOCIATES.....203
10.1 POLICY FOR THE ACCOUNTING OF EQUITY ACCOUNTED INVESTMENT IN JOINT VENTURES.....204
10.2 DISCLOSURES OF INTEREST IN JOINT VENTURES.....204
10.3 INVESTMENT IN JOINT VENTURES ACCOUNTED FOR UNDER THE EQUITY METHOD OF ACCOUNTING.....205
10.4 ASSETS, LIABILITIES, REVENUE AND EXPENSES FROM JOINT VENTURES:.....208
10.5 OTHER JOINT VENTURE DISCLOSURES:.....209
10.6 JOINT VENTURES.....210
NOTE 11 CASH AND CASH EQUIVALENTS.....211
11.1 TYPES OF CASH AND CASH EQUIVALENTS.....211
11.2 SHORT-TERM INVESTMENTS, CLASSIFIED AS CASH EQUIVALENTS.....211
11.3 INFORMATION ON CASH AND CASH EQUIVALENTS BY CURRENCY.....212
11.4 AMOUNT RESTRICTED (UNAVAILABLE) CASH BALANCES.....212
11.5 SHORT-TERM DEPOSITS, CLASSIFIED AS CASH EQUIVALENTS.....213
11.6 NET DEBT RECONCILIATION.....215
NOTE 12 INVENTORIES.....216



NOTE 13 RELATED PARTY DISCLOSURES.....218
13.1 RELATED PARTY DISCLOSURES.....218
13.2 RELATIONSHIPS BETWEEN THE PARENT AND THE ENTITY.....218
13.3 DETAILED IDENTIFICATION OF RELATED PARTIES AND SUBSIDIARIES.....219
13.4 DETAIL OF RELATED PARTIES AND RELATED PARTY TRANSACTIONS.....222
13.5 TRADE RECEIVABLES DUE FROM RELATED PARTIES, CURRENT:.....223
13.6 TRADE PAYABLES DUE TO RELATED PARTIES, CURRENT:.....223
NOTE 14 FINANCIAL INSTRUMENTS.....224
14.1 TYPES OF OTHER FINANCIAL ASSETS.....224
14.2 TRADE AND OTHER RECEIVABLES.....225
14.3 HEDGING ASSETS AND LIABILITIES.....228
14.4 FINANCIAL LIABILITIES.....230
14.5 TRADE AND OTHER PAYABLES.....243
14.6 FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS.....244
14.7 FINANCIAL ASSET AND LIABILITY CATEGORIES.....245
14.8 FAIR VALUE MEASUREMENT OF ASSETS AND LIABILITIES.....247
14.9 ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS AND FINANCIAL DERIVATIVES.....250
NOTE 15 INTANGIBLE ASSETS AND GOODWILL.....251
15.1 BALANCES.....251
15.2 DISCLOSURES ON INTANGIBLE ASSETS AND GOODWILL.....251
NOTE 16 PROPERTY, PLANT AND EQUIPMENT.....260
16.1 TYPES OF PROPERTY, PLANT AND EQUIPMENT.....260
16.2 CONCILIATION OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT BY TYPE:.....262
16.3 CONCILIATION OF CHANGES IN RIGHT OF USE ASSETS, BY CLASSES.....266
16.4 DETAIL OF PROPERTY, PLANT AND EQUIPMENT PLEDGED AS GUARANTEE.....267
16.5 IMPAIRMENT OF ASSETS.....267
16.6 ADDITIONAL INFORMATION.....267
NOTE 17 OTHER CURRENT AND NON-CURRENT NON-FINANCIAL ASSETS.....268
NOTE 18 EMPLOYEE BENEFITS.....269
18.1 PROVISIONS FOR EMPLOYEE BENEFITS.....269
18.2 POLICIES ON DEFINED BENEFIT PLAN.....269
18.3 OTHER LONG-TERM BENEFITS.....270
18.4 POST-EMPLOYMENT BENEFIT OBLIGATIONS.....270
18.5 STAFF SEVERANCE INDEMNITIES.....271
18.6 EXECUTIVE COMPENSATION PLAN.....272
NOTE 19 PROVISIONS AND OTHER NON-FINANCIAL LIABILITIES.....273
19.1 TYPES OF PROVISIONS.....273
19.2 DESCRIPTION OF OTHER PROVISIONS.....274
19.3 CHANGES IN PROVISIONS.....275
NOTE 20 DISCLOSURES ON EQUITY.....276
20.1 CAPITAL MANAGEMENT.....276
20.2 DISCLOSURES ON PREFERRED SHARE CAPITAL.....277
20.3 DISCLOSURES ON RESERVES IN EQUITY.....278
20.4 DIVIDEND POLICIES.....281
20.5 INTERIM AND PROVISIONAL DIVIDENDS.....283



20.6 POTENTIAL AND PROVISIONAL DIVIDENDS ..... 284
NOTE 22 CONTINGENCIES AND RESTRICTIONS ..... 286
22.1 LAWSUITS AND OTHER RELEVANT EVENTS ..... 286
22.2 RESTRICTIONS TO MANAGEMENT OR FINANCIAL LIMITS ..... 291
22.3 ENVIRONMENTAL CONTINGENCIES ..... 291
22.4 TAX CONTINGENCIES ..... 292
22.5 CONTINGENCIES REGARDING THE CHANGES TO THE CONTRACTS WITH CORFO: ..... 292
22.6 CONTINGENCIES RELATED TO THE CLASS ACTION LAWSUIT ..... 293
22.7 RESTRICTED OR PLEDGED CASH ..... 293
22.8 SECURITIES OBTAINED FROM THIRD PARTIES ..... 293
22.9 INDIRECT GUARANTEES ..... 294
NOTE 23 LAWSUITS AND COMPLAINTS ..... 295
NOTE 24 ENVIRONMENT ..... 296
24.1 DISCLOSURES OF DISBURSEMENTS RELATED TO THE ENVIRONMENT ..... 296
24.2 DETAILED INFORMATION ON DISBURSEMENTS RELATED TO THE ENVIRONMENT ..... 296
ACCUMULATED EXPENSES AS OF DECEMBER 31, 2019 ..... 297
ACCUMULATED EXPENSES AS OF DECEMBER 31, 2018 ..... 299
24.3 DESCRIPTION OF EACH PROJECT, INDICATING WHETHER THESE ARE IN PROCESS OR HAVE BEEN FINISHED ..... 301
NOTE 25 MINERAL RESOURCE EXPLORATION AND EVALUATION EXPENDITURE ..... 307
NOTE 26 GAINS (LOSSES) FROM OPERATING ACTIVITIES IN THE STATEMENT OF INCOME OF EXPENSES, INCLUDED ACCORDING TO THEIR NATURE ..... 308
26.1 REVENUE FROM OPERATING ACTIVITIES CUSTOMER ACTIVITIES ..... 308
26.2 COST OF SALES ..... 310
26.3 OTHER INCOME ..... 311
26.4 ADMINISTRATIVE EXPENSES ..... 311
26.5 OTHER EXPENSES BY FUNCTION ..... 312
26.6 OTHER GAINS (LOSSES) ..... 312
26.7 IMPAIRMENT OF GAINS AND REVERSAL OF IMPAIRMENT LOSSES ..... 313
26.8 SUMMARY OF EXPENSES BY NATURE ..... 313
26.9 FINANCE EXPENSES ..... 314
NOTE 27 REPORTABLE SEGMENTS ..... 315
27.1 REPORTABLE SEGMENTS ..... 315
27.2 REPORTABLE SEGMENT DISCLOSURES: ..... 317
27.3 STATEMENT OF COMPREHENSIVE INCOME CLASSIFIED BY REPORTABLE SEGMENTS BASED ON GROUPS OF PRODUCTS ..... 319
27.4 DISCLOSURES ON GEOGRAPHICAL AREAS ..... 321
27.5 DISCLOSURES ON MAIN CUSTOMERS ..... 321
27.7 PROPERTY, PLANT AND EQUIPMENT CLASSIFIED BY GEOGRAPHICAL AREAS ..... 323
NOTE 28 BORROWING COSTS ..... 324
NOTE 29 EFFECT OF FLUCTUATIONS IN FOREIGN CURRENCY EXCHANGE RATES ..... 325
NOTE 30 DISCLOSURES ON THE EFFECTS OF FLUCTUATIONS IN FOREIGN CURRENCY EXCHANGE RATES ..... 327
NOTE 31 INCOME TAX AND DEFERRED TAXES ..... 332



31.1 CURRENT AND NON-CURRENT TAX ASSETS ..... 332
31.2 CURRENT TAX LIABILITIES ..... 333
31.3 INCOME TAX AND DEFERRED TAXES ..... 334
NOTE 32 ASSETS HELD FOR SALE AND DETAIL OF ASSETS SOLD ..... 344
NOTE 33 EVENTS OCCURRED AFTER THE REPORTING DATE ..... 345
33.1 AUTHORIZATION OF THE FINANCIAL STATEMENTS ..... 345
33.2 DISCLOSURES ON EVENTS OCCURRING AFTER THE REPORTING DATE ..... 345
33.3 DETAILS OF DIVIDENDS DECLARED AFTER THE REPORTING DATE ..... 345



## Consolidated Classified Statements of Financial Position

<table><tr><td rowspan="2">Assets</td><td rowspan="2">Note N°</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Currents assets</td><td></td><td></td><td></td></tr><tr><td>Cash and cash equivalents</td><td>11.1</td><td>588,530</td><td>556,066</td></tr><tr><td>Other current financial assets</td><td>14.1</td><td>505,490</td><td>312,721</td></tr><tr><td>Other current non-financial assets</td><td>17</td><td>50,552</td><td>47,972</td></tr><tr><td>Trade and other receivables, current</td><td>14.2</td><td>399,142</td><td>466,619</td></tr><tr><td>Trade receivables due from related parties, current</td><td>13.5</td><td>61,227</td><td>42,790</td></tr><tr><td>Current inventories</td><td>12</td><td>983,338</td><td>913,674</td></tr><tr><td>Current tax assets</td><td>31.1</td><td>91,433</td><td>57,110</td></tr><tr><td>Total current assets other than those classified as held for sale or disposal</td><td></td><td>2,679,712</td><td>2,396,952</td></tr><tr><td>Non-current assets or groups of assets classified as held for sale</td><td>32</td><td>2,454</td><td>1,430</td></tr><tr><td>Total non-current assets held for sale</td><td></td><td>2,454</td><td>1,430</td></tr><tr><td>Total current assets</td><td></td><td>2,682,166</td><td>2,398,382</td></tr><tr><td>Non-current assets</td><td></td><td></td><td></td></tr><tr><td>Other non-current financial assets</td><td>14.1</td><td>8,778</td><td>17,131</td></tr><tr><td>Other non-current non-financial assets</td><td>17</td><td>19,729</td><td>27,539</td></tr><tr><td>Trade receivables, non-current</td><td>14.2</td><td>1,710</td><td>2,275</td></tr><tr><td>Investments classified using the equity method of accounting</td><td>9.1-10.3</td><td>109,435</td><td>111,549</td></tr><tr><td>Intangible assets other than goodwill</td><td>15.1</td><td>188,358</td><td>189,350</td></tr><tr><td>Goodwill</td><td>15.1</td><td>34,726</td><td>34,866</td></tr><tr><td>Property, plant and equipment</td><td>16.1</td><td>1,607,070</td><td>1,454,823</td></tr><tr><td>Tax assets, non-current</td><td>31.1</td><td>32,179</td><td>32,179</td></tr><tr><td>Total non-current assets</td><td></td><td>2,001,985</td><td>1,869,712</td></tr><tr><td>Total assets</td><td></td><td>4,684,151</td><td>4,268,094</td></tr></table>

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



Consolidated Classified Statements of Financial Position

<table><tr><td rowspan="2">Liabilities and Equity</td><td rowspan="2">Note N°</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Current liabilities</td><td></td><td></td><td></td></tr><tr><td>Other current financial liabilities</td><td>14.4</td><td>298,822</td><td>23,585</td></tr><tr><td>Trade and other payables, current</td><td>14.5</td><td>205,790</td><td>163,751</td></tr><tr><td>Trade payables due to related parties, current</td><td>13.6</td><td>475</td><td>9</td></tr><tr><td>Other current provisions</td><td>19.1</td><td>110,565</td><td>106,197</td></tr><tr><td>Current tax liabilities</td><td>31.2</td><td>17,874</td><td>47,412</td></tr><tr><td>Provisions for employee benefits, current</td><td>18.1</td><td>16,387</td><td>20,085</td></tr><tr><td>Other current non-financial liabilities</td><td>19.3</td><td>126,899</td><td>194,624</td></tr><tr><td>Total current liabilities</td><td></td><td>776,812</td><td>555,663</td></tr><tr><td>Non-current liabilities</td><td></td><td></td><td></td></tr><tr><td>Other non-current financial liabilities</td><td>14.4</td><td>1,518,926</td><td>1,330,382</td></tr><tr><td>Other non-current provisions</td><td>19.1</td><td>34,690</td><td>31,822</td></tr><tr><td>Deferred tax liabilities</td><td>31.3</td><td>183,411</td><td>175,361</td></tr><tr><td>Provisions for employee benefits, non-current</td><td>18.1</td><td>35,840</td><td>37,064</td></tr><tr><td>Total non-current liabilities</td><td></td><td>1,772,867</td><td>1,574,629</td></tr><tr><td>Total Liabilities</td><td></td><td>2,549,679</td><td>2,130,292</td></tr><tr><td>Equity</td><td></td><td></td><td></td></tr><tr><td>Equity attributable to owners of the Parent</td><td>20</td><td></td><td></td></tr><tr><td>Share capital</td><td>20,2</td><td>477,386</td><td>477,386</td></tr><tr><td>Retained earnings</td><td></td><td>1,623,104</td><td>1,623,104</td></tr><tr><td>Other reserves</td><td>20,3</td><td>(14,223)</td><td>(14,999)</td></tr><tr><td>Equity attributable to owners of the Parent</td><td></td><td>2,086,267</td><td>2,085,491</td></tr><tr><td>Non-controlling interests</td><td>8,3</td><td>48,205</td><td>52,311</td></tr><tr><td>Total equity</td><td></td><td>2,134,472</td><td>2,137,802</td></tr><tr><td>Total liabilities and equity</td><td></td><td>4,684,151</td><td>4,268,094</td></tr></table>

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



## Consolidated Statements of Income by Function

<table><tr><td rowspan="3">Consolidated Interim Statements of Income</td><td rowspan="3">Note N°</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Revenue</td><td>26.1</td><td>1,943,655</td><td>2,265,803</td></tr><tr><td>Cost of sales</td><td>26.2</td><td>(1,383,603)</td><td>(1,485,631)</td></tr><tr><td>Gross profit</td><td></td><td>560,052</td><td>780,172</td></tr><tr><td>Other income</td><td>26.3</td><td>18,218</td><td>32,048</td></tr><tr><td>Administrative expenses</td><td>26.4</td><td>(117,180)</td><td>(118,126)</td></tr><tr><td>Other expenses by function</td><td>26.5</td><td>(25,995)</td><td>(36,907)</td></tr><tr><td>Impairment of income and reversal of impairment losses (impairment losses)</td><td>26.7</td><td>(1,057)</td><td>2,967</td></tr><tr><td>Other gains (losses)</td><td>26.6</td><td>(383)</td><td>6,404</td></tr><tr><td>Profit (loss) from operating activities</td><td></td><td>433,655</td><td>666,558</td></tr><tr><td>Finance income</td><td></td><td>26,289</td><td>22,533</td></tr><tr><td>Finance costs</td><td>26.9</td><td>(76,939)</td><td>(57,807)</td></tr><tr><td>Share of profit of associates and joint ventures accounted for using the equity method</td><td>9.1-10.3</td><td>9,786</td><td>6,351</td></tr><tr><td>Foreign currency translation differences</td><td></td><td>(2,169)</td><td>(16,597)</td></tr><tr><td>Profit (loss) before taxes</td><td></td><td>390,622</td><td>621,038</td></tr><tr><td>Income tax expense, continuing operations</td><td>31.3</td><td>(110,019)</td><td>(178,975)</td></tr><tr><td>Profit (loss) from continuing operations</td><td></td><td>280,603</td><td>442,063</td></tr><tr><td>Profit attributable to:</td><td></td><td>280,603</td><td>442,063</td></tr><tr><td>Profit (loss) attributable to Owners of the Parent</td><td></td><td>278,115</td><td>439,830</td></tr><tr><td>Profit (loss) attributable to Non-controlling interests</td><td></td><td>2,488</td><td>2,233</td></tr><tr><td></td><td></td><td>280,603</td><td>442,063</td></tr></table>

<table><tr><td rowspan="3">Earnings per share</td><td rowspan="3">Note N°</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Common shares</td><td></td><td></td><td></td></tr><tr><td>Basic earnings per share (US$ per share)</td><td>21</td><td>1.0567</td><td>1.6711</td></tr><tr><td>Basic earnings per share (US$ per share) from continuing operations</td><td></td><td>-</td><td>-</td></tr><tr><td>Diluted common shares</td><td></td><td></td><td></td></tr><tr><td>Basic earnings per share (US$ per share)</td><td>21</td><td>1.0567</td><td>1.6711</td></tr><tr><td>Basic earnings per share (US$ per share) from continuing operations</td><td></td><td>-</td><td>-</td></tr></table>

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



Consolidated Statements of Comprehensive Income

<table><tr><td rowspan="3">Consolidated Interim Statements of Comprehensive Income</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Profit for the year</td><td>280,603</td><td>442,063</td></tr><tr><td>Other comprehensive income (loss)</td><td></td><td></td></tr><tr><td>Items of other comprehensive income (loss) that will not be reclassified to profit for the year, before taxes</td><td></td><td></td></tr><tr><td>(Losses) gains from measurements of defined benefit plans</td><td>(3,310)</td><td>(1,337)</td></tr><tr><td>Gains (losses) from financial assets measured irrevocably at fair value through other comprehensive income</td><td>1,152</td><td>(5,546)</td></tr><tr><td>Total other comprehensive income (loss) that will not be reclassified to profit for the year, before taxes</td><td>(2,158)</td><td>(6,883)</td></tr><tr><td>Items of other comprehensive income that will be reclassified to profit for the year, before taxes</td><td></td><td></td></tr><tr><td>Foreign currency exchange gains (losses)</td><td>788</td><td>(1,220)</td></tr><tr><td>(Loss) from financial assets measured at fair value through other comprehensive income</td><td></td><td></td></tr><tr><td>Gain from cash flow hedges</td><td>1,907</td><td>5,723</td></tr><tr><td>Total other comprehensive income (loss) that will be reclassified to profit for the year</td><td>2,695</td><td>4,503</td></tr><tr><td>Other items of other comprehensive income (loss) before taxes</td><td>537</td><td>(2,380)</td></tr><tr><td>Income taxes related to items of other comprehensive income (loss) that will not be reclassified to profit for the year</td><td></td><td></td></tr><tr><td>Income tax (benefit) expense related to financial assets measured irrevocably at fair value through other comprehensive income</td><td>(311)</td><td>1,498</td></tr><tr><td>Income taxes expense related to measurements of defined benefit plans</td><td>702</td><td>396</td></tr><tr><td>Total income tax related to items of other comprehensive income (loss) that will not be reclassified to profit for the year</td><td>391</td><td>1,894</td></tr><tr><td>Income tax relating to components of other comprehensive income (loss) that will be reclassified to profit for the year</td><td></td><td></td></tr><tr><td>Income tax benefit related to cash flow hedges</td><td>(2,683)</td><td>-</td></tr><tr><td>Income tax benefit related to financial assets measured at fair value through other comprehensive income</td><td>-</td><td>-</td></tr><tr><td>Total income tax benefit relating to components of other comprehensive income (loss) that will be reclassified to profit (loss) for the year</td><td>(2,683)</td><td>-</td></tr><tr><td>Total other comprehensive loss</td><td>(1,755)</td><td>(486)</td></tr><tr><td>Total comprehensive income</td><td>278,848</td><td>441,577</td></tr><tr><td>Comprehensive income attributable to</td><td></td><td></td></tr><tr><td>Comprehensive income attributable to owners of the parent</td><td>276,137</td><td>439,180</td></tr><tr><td>Comprehensive income attributable to non-controlling interest</td><td>2,711</td><td>2,397</td></tr><tr><td></td><td>278,848</td><td>441,577</td></tr></table>

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



Consolidated Statements of Cash Flows

<table><tr><td rowspan="3">Consolidated Interim Statements of Cash Flows</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Cash flows from operating activities</td><td></td><td></td></tr><tr><td>Classes of revenue from operating activities</td><td></td><td></td></tr><tr><td>Cash receipts from sales of goods and rendering of services</td><td>2,044,746</td><td>2,284,514</td></tr><tr><td>Cash receipts from premiums and benefits, annuities and other benefits from policies entered</td><td>2,925</td><td>2,140</td></tr><tr><td>Proceeds from leases and subsequent sale of assets</td><td>361</td><td>-</td></tr><tr><td>Classes of Payments</td><td></td><td></td></tr><tr><td>Cash payments to suppliers for the provision of goods and services</td><td>(1,284,204)</td><td>(1,226,091)</td></tr><tr><td>Cash payments to and on behalf of employees</td><td>(195,782)</td><td>(205,590)</td></tr><tr><td>Variable payments relating to identified leases as required by IFRS 16</td><td>(1,037)</td><td>-</td></tr><tr><td>Other payments related to operating activities</td><td>(25,218)</td><td>(21,240)</td></tr><tr><td>Net cash generated from operating activities</td><td>541,791</td><td>833,733</td></tr><tr><td>Dividends received</td><td>14,449</td><td>8,815</td></tr><tr><td>Interest paid</td><td>(70,963)</td><td>(59,565)</td></tr><tr><td>Interest paid on leases liabilities</td><td>(1,537)</td><td>-</td></tr><tr><td>Interest received</td><td>25,809</td><td>22,533</td></tr><tr><td>Income taxes paid</td><td>(173,319)</td><td>(240,115)</td></tr><tr><td>Other incomes (outflows) of cash (1)</td><td>90,741</td><td>(40,562)</td></tr><tr><td>Net cash generated from operating activities</td><td>426,971</td><td>524,839</td></tr><tr><td>Cash flows generated from (used in) investing activities</td><td></td><td></td></tr><tr><td>Cash flows arising from the loss of control of subsidiaries and other businesses</td><td>994</td><td>68,988</td></tr><tr><td>Payments made to acquire interest in joint ventures</td><td>(2,600)</td><td>(19,989)</td></tr><tr><td>Proceeds from the sale of property, plant and equipment</td><td>487</td><td>61</td></tr><tr><td>Acquisition of property, plant and equipment</td><td>(321,324)</td><td>(244,693)</td></tr><tr><td>Proceeds from sales of intangible assets</td><td>28,126</td><td>14,056</td></tr><tr><td>Proceeds payments related to futures, forward options and swap contracts</td><td>1,403</td><td>(204)</td></tr><tr><td>Purchases of intangible assets</td><td>(2,492)</td><td>(74,374)</td></tr><tr><td>Other (outflows) income of (2)</td><td>(190,065)</td><td>69,151</td></tr><tr><td>Net cash generated from (used in) investing activities</td><td>(485,471)</td><td>(187,004)</td></tr></table>

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

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



Consolidated Statements of Cash Flows

<table><tr><td rowspan="3">Consolidated Interim Statements of Cash Flows</td><td rowspan="3">Note N°</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Cash flows generated from (used in) financing activities</td><td></td><td></td><td></td></tr><tr><td>Repayment of lease liabilities</td><td></td><td>(7,221)</td><td>-</td></tr><tr><td>Proceeds from long-term borrowings</td><td></td><td>450,000</td><td>256,039</td></tr><tr><td>Proceeds from short-term borrowings</td><td></td><td>-</td><td>120,000</td></tr><tr><td>Repayment of borrowings</td><td></td><td>(7,096)</td><td>(213,000)</td></tr><tr><td>Dividends paid</td><td></td><td>(329,787)</td><td>(550,352)</td></tr><tr><td>Net cash generated from (used in) financing activities</td><td></td><td>105,896</td><td>(387,313)</td></tr><tr><td>Net increase (decrease) in cash and cash equivalents before the effect of changes in the exchange rate</td><td></td><td>47,396</td><td>(49,478)</td></tr><tr><td>Effects of exchange rate fluctuations on cash held</td><td></td><td>(14,932)</td><td>(24,894)</td></tr><tr><td>Net increase (decrease) in cash and cash equivalents</td><td></td><td>32,464</td><td>(74,372)</td></tr><tr><td>Cash and cash equivalents at beginning of period</td><td></td><td>556,066</td><td>630,438</td></tr><tr><td>Cash and cash equivalents at end of period</td><td>11</td><td>588,530</td><td>556,066</td></tr></table>

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



## Consolidated Statements of Changes in Equity

<table><tr><td>Consolidated Statements of Changes in Equity</td><td>Share capital</td><td>Foreign currency translation reserves</td><td>Cash flow hedge reserves</td><td>Reserve for (losses) gains from financial assets measured at fair value through other comprehensive income</td><td>Actuarial (losses) from defined benefit plans</td><td>Other miscellaneous reserves</td><td>Total Other reserves</td><td>Retained earnings</td><td>Equity attributable to owners of the Parent</td><td>Non-controlling interests</td><td>Total</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS$</td><td>ThUS\)</td><td>ThUS\(</td></tr><tr><td>Equity as of January 1, 2019</td><td>477,386</td><td>(26,307)</td><td>7,971</td><td>(1,111)</td><td>(6,884)</td><td>11,332</td><td>(14,999)</td><td>1,623,104</td><td>2,085,491</td><td>52,311</td><td>2,137,802</td></tr><tr><td>Net profit</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>278,115</td><td>278,115</td><td>2,488</td><td>280,603</td></tr><tr><td>Other comprehensive income</td><td>-</td><td>562</td><td>(775)</td><td>841</td><td>(2,606)</td><td>-</td><td>(1,978)</td><td>-</td><td>(1,978)</td><td>223</td><td>(1,755)</td></tr><tr><td>Comprehensive income</td><td>-</td><td>562</td><td>(775)</td><td>841</td><td>(2,606)</td><td>-</td><td>(1,978)</td><td>278,115</td><td>276,137</td><td>2,711</td><td>278,848</td></tr><tr><td>Dividends (1)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(278,115)</td><td>(278,115)</td><td>(6,817)</td><td>(284,932)</td></tr><tr><td>Increase in Equity</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>2,754</td><td>2,754</td><td>-</td><td>2,754</td><td>-</td><td>2,754</td></tr><tr><td>Increase (decrease) in equity</td><td>-</td><td>562</td><td>(775)</td><td>841</td><td>(2,606)</td><td>2,754</td><td>776</td><td>-</td><td>776</td><td>(4,106)</td><td>(3,330)</td></tr><tr><td>Equity as of December 31, 2019</td><td>477,386</td><td>(25,745)</td><td>7,196</td><td>(270)</td><td>(9,490)</td><td>14,086</td><td>(14,223)</td><td>1,623,104</td><td>2,086,267</td><td>48,205</td><td>2,134,472</td></tr></table>

<table><tr><td>Consolidated Statements of Changes in Equity</td><td>Share capital</td><td>Foreign currency translation reserves</td><td>Cash flow hedge reserves</td><td>Reserve for (losses) gains from financial assets measured at fair value through other comprehensive income</td><td>Actuarial (losses) gains from defined benefit plans</td><td>Other miscellaneous reserves</td><td>Total Other reserves</td><td>Retained earnings</td><td>Equity attributable to owners of the Parent</td><td>Non-controlling interests</td><td>Total</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS$</td><td>ThUS$</td><td>ThUS$</td></tr><tr><td>Equity as of January 1, 2018</td><td>477,386</td><td>(24,913)</td><td>2,248</td><td>2,937</td><td>(5,953)</td><td>11,332</td><td>(14,349)</td><td>1,724,784</td><td>2,187,821</td><td>59,647</td><td>2,247,468</td></tr><tr><td>(Decrease) due to changes in accounting policies</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(1,680)</td><td>(1,680)</td><td>-</td><td>(1,680)</td></tr><tr><td>Restated initial equity</td><td>477,386</td><td>(24,913)</td><td>2,248</td><td>2,937</td><td>(5,953)</td><td>11,332</td><td>(14,349)</td><td>1,723,104</td><td>2,186,141</td><td>59,647</td><td>2,245,788</td></tr><tr><td>Net profit</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>439,830</td><td>439,830</td><td>2,233</td><td>442,063</td></tr><tr><td>Other comprehensive income</td><td>-</td><td>(1,394)</td><td>5,723</td><td>(4,048)</td><td>(931)</td><td>-</td><td>(650)</td><td>-</td><td>(650)</td><td>164</td><td>(486)</td></tr><tr><td>Comprehensive income</td><td>-</td><td>(1,394)</td><td>5,723</td><td>(4,048)</td><td>(931)</td><td>-</td><td>(650)</td><td>439,830</td><td>439,180</td><td>2,397</td><td>441,577</td></tr><tr><td>Dividends (1)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(539,830)</td><td>(539,830)</td><td>(9,733)</td><td>(549,563)</td></tr><tr><td>Increase (decrease) in equity</td><td>-</td><td>(1,394)</td><td>5,723</td><td>(4,048)</td><td>(931)</td><td>-</td><td>(650)</td><td>(100,000)</td><td>(100,650)</td><td>(7,336)</td><td>(107,986)</td></tr><tr><td>Equity as of December 31, 2018</td><td>477,386</td><td>(26,307)</td><td>7,971</td><td>(1,111)</td><td>(6,884)</td><td>11,332</td><td>(14,999)</td><td>1,623,104</td><td>2,085,491</td><td>52,311</td><td>2,137,802</td></tr></table>

(1) See Note 20.6

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



## Glossary

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

“ADS” American Depositary Shares;

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

“CCHEN” Chilean Nuclear Energy Commission;

“CCS” cross currency swap;

“CINIIF” International Financial Reporting Interpretations Committee;

“CMF” Financial Market Commission;

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

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

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

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

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

“CORFO” Chilean Economic Development Agency;

“DCV” Central Securities Depository;

“DGA” General Directorate of Water Resources;

“Board” The Company’s Board of Directors;

“DOJ” United States Department of Justice;

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

“DPA” Deferred Prosecution Agreement;

“EIEP” Passive foreign investment company;

“United States” United States of America;

“FCPA” Foreign Corrupt Practices Act of the USA;

“Management” the Company’s management;

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

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

“IASB” International Accounting Standards Board;

“SSI” Staff severance indemnities;



“IFRIC” International Financial Reporting Interpretations Committee;

“IPC” Consumer Price Index;

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

"Corporate Law" Ley 18,046 on corporations;

"ThUS$" thousands of Dollars;

"MUS$" millions of Dollars;

“IAS” International Accounting Standard;

“IFRS” International Financial Reporting Standard;

“Pesos” “Ch$” o “CLP” Chilean pesos, legal tender in Chile;

“SEC” Securities and Exchange Commission;

“Sernageomin” National Geology and Mining Service;

“SIC” Standard Interpretations Committee;

“SII” Chilean Internal Revenue Service;

“SMA” Environmental Superintendent’s Office;

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

“SQM Industrial” SQM Industrial S.A.;

“SQM NA” SQM North America Corporation;

“SQM Nitratos” SQM Nitratos S.A.;

“SQM Potasio” SQM Potasio S.A.;

“SQM Salar” SQM Salar S.A.;

“Tianqi” Tianqi Lithium Corporation; and

“UF” Unidad de Fomento (a Chilean Peso based inflation indexed currency unit).



## Note 1 Identification and Activities of the Company and Subsidiaries

## 1.1 Historical background

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

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

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

## 1.2 Main domicile where the Company performs its production activities

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

## 1.3 Codes of main activities

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

- 1700 (Mining)

- 2200 (Chemical products)

- 1300 (Investment)

## 1.4 Description of the nature of operations and main activities

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

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

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

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



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

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

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

Our subsidiary SQM Salar holds exclusive rights to exploit the mineral resources in an area covering approximately 140,000 hectares of land in the Salar de Atacama in northern Chile, of which SQM Salar is only entitled to exploit the mineral resources in 81,920 hectares. These rights are owned by Corfo and leased to SQM Salar pursuant to the Lease Agreement. Corfo cannot unilaterally amend the Lease Agreement and the Project Agreement, and the rights to exploit the resources cannot be transferred. The Lease Agreement establishes that SQM Salar is responsible for making quarterly lease payments to Corfo according to specified percentages of the value of production of minerals extracted from the Salar de Atacama brines, maintaining Corfo’s rights over the Mining Exploitation Concessions and making annual payments to the Chilean government for such concession rights. The Lease Agreement was entered into in 1993 and expires on December 31, 2030. On January 17, 2018, SQM and CORFO reached an agreement to end an arbitration process directed by the arbitrator, Mr. Héctor Humeres Noguer, in case 1954-2014 of the Arbitration and Mediation Center of Santiago Chamber of Commerce (Centro de Arbitrajes y Mediación de la Cámara de Comercio de Santiago) and other cases related to it.

The agreement signed in January 2018, includes important amendments to the lease agreement and project agreement signed between CORFO and SQM in 1993. The main modifications became effective on April 10, 2018 and requires an increase in the lease payments by increasing the lease rates associated with the sale of the different products produced in the Salar de Atacama, including lithium carbonate, lithium hydroxide and potassium chloride. Regarding lithium carbonate, the former rate of 6.8% on FOB sales was changed to the following structure of progressive rates based on the final sale price:

<table><tr><td>Price US$/MT Li2CO3</td><td>Lease payment rate</td></tr><tr><td>$0 - $4,000</td><td>6.80%</td></tr><tr><td>$4,000 - $5,000</td><td>8.00%</td></tr><tr><td>$5,000 - $6,000</td><td>10.00%</td></tr><tr><td>$6,000 - $7,000</td><td>17.00%</td></tr><tr><td>$7,000 - $10,000</td><td>25.00%</td></tr><tr><td>&gt; $10,000</td><td>40.00%</td></tr></table>

See Note 26.2 for the disclosure of lease payments made to CORFO for all periods presented.



Regarding potassium chloride, the former rate of 1.8% on FOB sales was changed to the following structure of progressive rates based on the final sale price:

<table><tr><td>Price US$/MT Li2CO3</td><td>Lease payment rate</td></tr><tr><td>$0 - $300</td><td>3.0%</td></tr><tr><td>$300 - $400</td><td>7.0%</td></tr><tr><td>$400 - $500</td><td>10.0%</td></tr><tr><td>$500 - $600</td><td>15.0%</td></tr><tr><td>&gt; $600</td><td>20.0%</td></tr></table>

Similarly, the lease rates associated with the other products (lithium hydroxide, potassium sulfate and others) shall have similar changes to those described in the previous products.

SQM Salar commits to contribute between US$ 10.8 million and US$ 18.9 million per year to research and development efforts, between US$ 10 to US$ 15 million per year to the communities in close proximity to the Salar de Atacama, and 1.7% of total annual sales of SQM Salar to regional development.

## 1.5 Other background

## (a) Staff

As of December 31, 2019, and 2018, the workforce was as follows:

<table><tr><td rowspan="2">Employees</td><td colspan="3">As of December 31, 2019</td><td colspan="3">As of December 31, 2018</td></tr><tr><td>S.Q.M S.A.</td><td>Other subsidiaries</td><td>Total</td><td>S.Q.M S.A.</td><td>Other subsidiaries</td><td>Total</td></tr><tr><td>Executives</td><td>30</td><td>91</td><td>121</td><td>33</td><td>89</td><td>122</td></tr><tr><td>Professionals</td><td>110</td><td>1,170</td><td>1,280</td><td>115</td><td>1,078</td><td>1,193</td></tr><tr><td>Technicians and operators</td><td>282</td><td>3,481</td><td>3,763</td><td>260</td><td>3,287</td><td>3,547</td></tr><tr><td>Foreign employees</td><td>17</td><td>560</td><td>577</td><td>11</td><td>417</td><td>428</td></tr><tr><td>Overall total</td><td>439</td><td>5,302</td><td>5,741</td><td>419</td><td>4,871</td><td>5,290</td></tr></table>



## (b) Main shareholders

As of December 2019, there were 1,413 shareholders.

following table shows information about the main shareholders of the Company’s Series A or Series B shares in circulation as of December 31, 2019 and December 31, 2018, in line with information provided by the DCV. The following table presents the information about the beneficial ownership of Series A and Series B shares of the Company as of December 31, 2019 and December 31, 2018, with respect to each shareholder that, to our knowledge, owns more than 5% of the outstanding Series A or Series B shares. The following information is derived from our registry and reports managed by the DCV and informed to the CMF and the Chilean Stock Exchanges. whose main shareholders are the following:

<table><tr><td>Shareholder as of December 31, 2019</td><td>No. of Series A</td><td>% of Series A shares</td><td>No. of Series B</td><td>% of Series B shares</td><td>% of total shares</td></tr><tr><td>Inversiones TLC SpA (1)</td><td>62,556,568</td><td>43.80%</td><td>-</td><td>-</td><td>23.77%</td></tr><tr><td>Sociedad de Inversiones Pampa Calichera S.A.</td><td>44,894,152</td><td>31.43%</td><td>3,793,154</td><td>3.15%</td><td>18.50%</td></tr><tr><td>The Bank of New York Mellon, ADRs</td><td>-</td><td>-</td><td>38,311,788</td><td>31.83%</td><td>14.56%</td></tr><tr><td>Potasios de Chile S.A.</td><td>18,179,147</td><td>12.73%</td><td>-</td><td>-</td><td>6.91%</td></tr><tr><td>Inversiones Global Mining (Chile) Limitada</td><td>8,798,539</td><td>6.16%</td><td>-</td><td>-</td><td>3.34%</td></tr><tr><td>Banco Itau via foreign investor accounts</td><td>-</td><td>-</td><td>7,373,216</td><td>6.13%</td><td>2.80%</td></tr><tr><td>Banco de Chile non-resident third party accounts</td><td>109</td><td>-</td><td>6,842,746</td><td>5.68%</td><td>2.60%</td></tr><tr><td>Banco Santander via foreign investor accounts</td><td>-</td><td>-</td><td>6,618,416</td><td>5.50%</td><td>2.51%</td></tr><tr><td>Euroamerica C de B S.A.</td><td>3,056</td><td>-</td><td>4,863,467</td><td>4.04%</td><td>1.85%</td></tr><tr><td>Banchile C de B S. A.</td><td>491,729</td><td>0.34%</td><td>4,285,696</td><td>3.56%</td><td>1.82%</td></tr><tr><td>Inversiones la Esperanza de Chile Limitada</td><td>4,147,263</td><td>2.90%</td><td>46,500</td><td>0.04%</td><td>1.59%</td></tr><tr><td>Santiago stock exchange</td><td>30,590</td><td>0.02%</td><td>3,077,930</td><td>2.56%</td><td>1.18%</td></tr></table>

(1) As reported by DCV, which records the Company’s shareholders’ register as of December 31, 2019 and December 31, 2018, Inversiones TLC SpA, a subsidiary of Tianqi, is the direct owner of 62,556,568 shares of SQM equivalent to 23.77% of SQM’s shares” According to information provided to the CMF by Inversiones TLC SpA dated December 5, 2018, Inversiones TLC SpA owns 25.86% of SQM’s shares

<table><tr><td>Shareholder as of December 31, 2018</td><td>No. of Series A</td><td>% of Series A shares</td><td>No. of Series B</td><td>% of Series B shares</td><td>% of total shares</td></tr><tr><td>Inversiones TLC SpA (1)</td><td>62,556,568</td><td>43.80%</td><td>-</td><td>-</td><td>23.77%</td></tr><tr><td>Sociedad de Inversiones Pampa Calichera S.A.</td><td>44,894,152</td><td>31.43%</td><td>10,093,154</td><td>8.38%</td><td>20.89%</td></tr><tr><td>The Bank of New York Mellon, ADRs</td><td>-</td><td>-</td><td>35,254,267</td><td>29.29%</td><td>13.39%</td></tr><tr><td>Potasios de Chile S.A.</td><td>18,179,147</td><td>12.73%</td><td>-</td><td>-</td><td>6.91%</td></tr><tr><td>Banco de Chile via non-resident third party accounts</td><td>15,687</td><td>0.01%</td><td>10,703,812</td><td>8.89%</td><td>4.07%</td></tr><tr><td>Inversiones Global Mining (Chile) Limitada</td><td>8,798,539</td><td>6.16%</td><td>-</td><td>-</td><td>3.34%</td></tr><tr><td>Banco Itau via foreign investor accounts</td><td>-</td><td>-</td><td>8,085,730</td><td>6.72%</td><td>3.07%</td></tr><tr><td>Banco Santander via foreign investor accounts</td><td>-</td><td>-</td><td>7,138,685</td><td>5.93%</td><td>2.71%</td></tr><tr><td>Banchile C de B S. A.</td><td>528,092</td><td>0.37%</td><td>4,028,611</td><td>3.35%</td><td>1.73%</td></tr><tr><td>Inversiones la Esperanza de Chile Limitada</td><td>3,711,598</td><td>2.60%</td><td>46,500</td><td>0.04%</td><td>1.43%</td></tr></table>



## Note 2 Basis of presentation for the consolidated financial statements

## 2.1 Accounting period

These consolidated financial statements cover the following periods:

(a) Consolidated Statements of Financial Position as of December 31, 2019 and, 2018.

(b) Consolidated Statements of Income for the periods ended December 31, 2019 and 2018.

(c) Consolidated Statements of Comprehensive Income for years ended December 31, 2019 and 2018.

(d) Consolidated Statements of Changes in Equity for the years ended December 31, 2019 and 2018.

(e) Consolidated Statements of Direct-Method Cash Flows for ended December 31, 2019 and 2018.

## 2.2 Consolidated financial statements

These consolidated financial statements of the company. and its subsidiaries were prepared in accordance with IFRS and represent its full, explicit and unreserved adoption.

These consolidated financial statements fairly reflect the Company’s financial position, as of December 31, 2019 and 2018 and, the comprehensive results of operations, changes in equity and cash flows occurring for the years ended December 31, 2019 and, 2018.

IFRS establish certain alternatives for their application, those applied by the Company are detailed in Notes 2 and 3.

The accounting policies used in the preparation of these consolidated annual accounts comply with each IFRS in force at their date of presentation.

As of December 31, 2019, at the close of these consolidated financial statements, certain reclassifications were made as of and for the year ended December 31, 2018, to correct the prior year presentation. These revisions were not considered material to the previously issued financial statements.

<table><tr><td rowspan="2">Items</td><td>Original balances reported as of December 31, 2018</td><td>Reclassification</td><td>Balances reclassified as of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS$</td></tr><tr><td>Trade and other receivables, current</td><td>464,855</td><td>1,764</td><td>466,619</td></tr><tr><td>Trade receivables due from related parties, current</td><td>44,554</td><td>(1,764)</td><td>42,790</td></tr><tr><td>Other non financial assets, current</td><td>49,186</td><td>(1,214)</td><td>47,972</td></tr><tr><td>Intangible assets other than goodwill</td><td>188,283</td><td>1,067</td><td>189,350</td></tr><tr><td>Goodwill</td><td>34,718</td><td>148</td><td>34,866</td></tr><tr><td>Cost of sales</td><td>(1,483,524)</td><td>(2,107)</td><td>(1,485,631)</td></tr><tr><td>Finance costs</td><td>(59,914)</td><td>2,107</td><td>(57,807)</td></tr></table>

## 2.3 Basis of measurement

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

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

(b) Financial derivatives at fair value.

(c) Certain financial investments classified as available for sale measured at fair value with an offsetting entry in other comprehensive income.



## 2.4 Accounting pronouncements

## New accounting pronouncements

(a) The following standards, interpretations and amendments are mandatory for the first time for annual periods beginning on January 1, 2019:

<table><tr><td>Standards and Interpretations</td><td>Description</td><td>Mandatory for annual periods beginning on or after</td></tr><tr><td>IFRS 16 &quot;Leases&quot; - issued in January 2016</td><td>Establishes the standards to recognize, measure, present and disclose leases. IFRS 16 replaces IAS 17 and introduces a unique lessee accounting model that requires a lessee to recognize the assets and liabilities of all rental contracts with a term of over 12 months, unless the underlying asset is of low value. IFRS 16 is effective for annual periods beginning on or after January 1, 2019, and early implementation is permitted for entities that apply IFRS 15, or before the date that IFRS 16 is initially implemented.</td><td>01-01-2019</td></tr><tr><td>IFRIC 23 &quot;Uncertainty over Income Tax Treatments&quot;. Published in June 2016</td><td>This interpretation clarifies how to apply the recognition and measurement requirements in IAS 12, when there is uncertainty over income tax treatments.</td><td>01-01-2019</td></tr></table>

<table><tr><td>Amendments and improvements</td><td>Description</td><td>Mandatory for annual periods beginning on or after</td></tr><tr><td>Amendment to IFRS 9 “Financial Instruments”. Published in October 2017</td><td>The amendment permits more assets to be measured at amortized cost than under the previous version of IFRS 9, in particular some prepayable financial assets with negative compensation. The assets affected, which include some loans and debt securities, would otherwise have been measured at fair value through profit and loss (FVTPL). For them to qualify for amortized cost measurement, the negative compensation must be “reasonable compensation for early termination of the contract.”</td><td>01-01-2019</td></tr><tr><td>Amendment to IAS 28 “Investments in Associates and Joint Ventures” Published in October 2017</td><td>This amendment clarifies that companies should apply IFRS 9 to account for long-term interests in an associate or joint venture to which the equity method is not applied. The IASB Board has published an example that illustrates how companies should apply the requirements of IFRS 9 and IAS 28 to long-term interests in an associate or joint venture.</td><td>01-01-2019</td></tr><tr><td>Amendment to IFRS 3 “Business Combinations” - Published in December 2017</td><td>The amendment clarified that gaining control of a company that is a joint venture deals with a business combination that is achieved in stages. The acquirer must remeasure previously held interests in that business at fair value at the date of acquisition.</td><td>01-01-2019</td></tr><tr><td>Amendment to IFRS 11 “Joint Arrangements” - Published in December 2017.</td><td>The amendment clarified that when an entity obtains joint control of a business that is a joint operation, the entity does not remeasure previously held interests in that business.</td><td>01-01-2019</td></tr><tr><td>Amendment to IAS 12 “Income Tax” - Published in December 2017.</td><td>This modification clarified that the income tax consequences of dividends on financial instruments classified as equity should be recognized when the past transactions or events that generated distributable profits were originally recognized.</td><td>01-01-2019</td></tr><tr><td>Amendment to IAS 23 Borrowing Costs - Published in December 2017.</td><td>This amendment clarifies that the borrowing costs of specific borrowings that remain outstanding after the related qualifying asset is ready for intended use or for sale will be considered as part of the general borrowing costs of the entity.</td><td>01-01-2019</td></tr><tr><td>Amendment to IAS 19 “Employee Benefits” - Published in February 2018</td><td>The amendment requires entities to use updated assumptions to determine the current service cost and net interest for the remainder of the period after a modification, reduction or settlement of the plan; and to recognize in profit or loss as part of the cost of the past service, or a profit or loss in the settlement, any reduction in a surplus, even if that surplus was not previously recognized because it did not exceed the upper limit of the asset</td><td>01-01-2019</td></tr></table>

Management considers that the adoption of the aforementioned standards, amendments and interpretations did not significantly impact the company’s consolidated financial statements, except for IFRS 16, detailed in notes 4.2 and 14.4 f).



(b) Standards, interpretations and amendments issued that had not become effective for financial statements beginning on January 1, 2019 and which the Company has not adopted early are as follows:

<table><tr><td>Standards and Interpretations</td><td>Description</td><td>Mandatory for annual periods beginning on or after</td></tr><tr><td>Amendment to IFRS 3 “Definition of a Business” - Published in October 2018</td><td>This amendment revises the definition of a business. Based on the feedback received by the IASB, the application of the current guidance is frequently seen as too complex, and results in too many transactions that qualify as business combinations.</td><td>01-01-2020</td></tr><tr><td>Amendment to IAS 1 “Presentation of Financial Statements” and “IAS 8” Accounting Policies, Changes in Accounting Estimates and Errors - Published in October 2018.</td><td>This amendment establishes a consistent definition of materiality in all the IFRCs and the Conceptual Framework for Financial Information; it clarifies the explanation of the definition of material; and it incorporates some of the guidelines in IAS 1 on immaterial information.</td><td>01-01-2020</td></tr><tr><td>Amendment to IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures”, Published in September 2014</td><td>These amendments address an inconsistency between the requirements in IFRS 10 and those in IAS 28 in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main consequence of the amendments is that a full gain or loss is recognized when a transaction involves a business (whether it is housed in a subsidiary or not), A partial gain or loss is recognized when a transaction involves assets that do not constitute a business, even if these assets are housed in a subsidiary.</td><td>Undetermined</td></tr><tr><td>Amendments to IFRS 9, IAS 39 and IFRS 7 “Reform to the referential interest rate” Published in September 2019</td><td>These amendments provide certain simplifications in relation to the reform to the referential interest rates. These simplifications relate to hedge accounting and affect the IBOB reform, which generally shouldn’t result in the finalization of hedge accounting. However, any hedge ineffectiveness should continue to be recorded in the results</td><td>01-01-2020</td></tr></table>

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



## 2.5 Basis of consolidation

## (a) Subsidiaries

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

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

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

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

To account for an acquisition, of a business the Company uses the acquisition method. Under this method the acquisition cost is the fair value of assets delivered, equity securities issued, and incurred or assumed liabilities at the date of exchange. Assets, liabilities and contingencies identifiable assumed in a business combination are measured initially at fair value at the acquisition date. For each business combination, the Company will measure the non-controlling interest of the acquiree either at fair value or as proportional share of net identifiable assets of the acquiree. For more information, please see Note 8.1.



(b) Companies included in consolidation:

<table><tr><td rowspan="3">TAX ID No.</td><td rowspan="3">Foreign subsidiaries</td><td rowspan="3">Country of origin</td><td rowspan="3">Functional currency</td><td colspan="4">Ownership interest</td></tr><tr><td colspan="3">As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>Direct</td><td>Indirect</td><td>Total</td><td>Total</td></tr><tr><td>Foreign</td><td>Nitratos Naturais Do Chile Ltda.</td><td>Brazil</td><td>US\(</td><td>0.0000</td><td>100.0000</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>Nitrate Corporation Of Chile Ltd.</td><td>United Kingdom</td><td>US\)</td><td>0.0000</td><td>100.0000</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SQM North America Corp.</td><td>USA</td><td>US\(</td><td>40.0000</td><td>60.0000</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SQM Europe N.V.</td><td>Belgium</td><td>US\)</td><td>0.5800</td><td>99.4200</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>Soquimich S.R.L. Argentina</td><td>Argentina</td><td>US\(</td><td>0.0000</td><td>100.0000</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>Soquimich European Holding B.V.</td><td>Netherlands</td><td>US\)</td><td>0.0000</td><td>100.0000</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SQM Corporation N.V.</td><td>Curacao</td><td>US\(</td><td>0.0002</td><td>99.9998</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SQI Corporation N.V.</td><td>Curacao</td><td>US\)</td><td>0.0159</td><td>99.98413</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SQM Comercial De México S.A. de C.V.</td><td>Mexico</td><td>US\(</td><td>0.0100</td><td>99.9900</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>North American Trading Company</td><td>USA</td><td>US\)</td><td>0.0000</td><td>100.0000</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>Administración Y Servicios Santiago S.A. de C.V.</td><td>Mexico</td><td>US\(</td><td>0.0000</td><td>100.0000</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SQM Perú S.A.</td><td>Perú</td><td>US\)</td><td>0.0091</td><td>99.99093</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SQM Ecuador S.A.</td><td>Ecuador</td><td>US\(</td><td>0.0040</td><td>99.9960</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SQM Nitratos México S.A. de C.V.</td><td>Mexico</td><td>US\)</td><td>0.0000</td><td>100.0000</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SQMC Holding Corporation L.L.P.</td><td>USA</td><td>US\(</td><td>0.1000</td><td>99.9900</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SQM Investment Corporation N.V.</td><td>Curacao</td><td>US\)</td><td>1.0000</td><td>99.0000</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SQM Brasil Limitada</td><td>Brazil</td><td>US\(</td><td>0.8400</td><td>99.1600</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SQM France S.A.</td><td>France</td><td>US\)</td><td>0.0000</td><td>100.0000</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SQM Japan Co. Ltd.</td><td>Japan</td><td>US\(</td><td>0.1597</td><td>99.8403</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>Royal Seed Trading Corporation A.V.V.</td><td>Aruba</td><td>US\)</td><td>1.6700</td><td>98.3300</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SQM Oceania Pty Limited</td><td>Australia</td><td>US\(</td><td>0.0000</td><td>100.0000</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>Rs Agro-Chemical Trading A.V.V.</td><td>Aruba</td><td>US\)</td><td>98.3333</td><td>1.6667</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SQM Colombia SAS</td><td>Colombia</td><td>US\(</td><td>0.0000</td><td>100.0000</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SQM Australia PTY</td><td>Australia</td><td>US\)</td><td>0.0000</td><td>100.0000</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SACAL S.A. (1)</td><td>Argentina</td><td>ARS</td><td>0.0000</td><td>0.0000</td><td>0.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SQM Indonesia S.A.</td><td>Indonesia</td><td>US\(</td><td>0.0000</td><td>80.0000</td><td>80.0000</td><td>80.0000</td></tr><tr><td>Foreign</td><td>SQM Virginia L.L.C.</td><td>USA</td><td>US\)</td><td>0.0000</td><td>100.0000</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SQM Italia SRL</td><td>Italy</td><td>US\(</td><td>0.0000</td><td>100.0000</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>Comercial Caimán Internacional S.A.</td><td>Panama</td><td>US\)</td><td>0.0000</td><td>100.0000</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SQM Africa Pty.</td><td>South Africa</td><td>US\(</td><td>0.0000</td><td>100.0000</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SQM Lithium Specialties LLC</td><td>USA</td><td>US\)</td><td>0.0000</td><td>100.0000</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SQM Iberian S.A.</td><td>Spain</td><td>US\(</td><td>0.0000</td><td>100.0000</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SQM Beijing Commercial Co. Ltd.</td><td>China</td><td>US\)</td><td>0.0000</td><td>100.0000</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SQM Thailand Limited.</td><td>Thailand</td><td>US\(</td><td>0.0000</td><td>99.9960</td><td>99.9960</td><td>99.9960</td></tr><tr><td>Foreign</td><td>SQM International N.V.</td><td>Belgium</td><td>US\)</td><td>0.5800</td><td>99.4200</td><td>100.0000</td><td>100.0000</td></tr><tr><td>Foreign</td><td>SQM (Shanghai) Chemicals Co. Ltd.</td><td>China</td><td>US\(</td><td>0.0000</td><td>100.0000</td><td>100.0000</td><td>100.0000</td></tr></table>



<table><tr><td rowspan="3">TAX ID No.</td><td rowspan="3">Domestic subsidiaries</td><td rowspan="3">Country of origin</td><td rowspan="3">Functional currency</td><td colspan="4">Ownership interest</td></tr><tr><td colspan="3">As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>Direct</td><td>Indirect</td><td>Total</td><td>Total</td></tr><tr><td>96.801.610-5</td><td>Comercial Hydro S.A.</td><td>Chile</td><td>US\(</td><td>0.0000</td><td>60.6383</td><td>60.6383</td><td>60.6383</td></tr><tr><td>96.651.060-9</td><td>SQM Potasio S.A.</td><td>Chile</td><td>US\)</td><td>99.9999</td><td>0.0000</td><td>99.9999</td><td>99.9999</td></tr><tr><td>96.592.190-7</td><td>SQM Nitratos S.A.</td><td>Chile</td><td>US\(</td><td>99.9999</td><td>0.0001</td><td>100.0000</td><td>100.0000</td></tr><tr><td>96.592.180-K</td><td>Ajay SQM Chile S.A.</td><td>Chile</td><td>US\)</td><td>51.0000</td><td>0.0000</td><td>51.0000</td><td>51.0000</td></tr><tr><td>86.630.200-6</td><td>SQMC Internacional Ltda. (2)</td><td>Chile</td><td>Ch\(</td><td>0.0000</td><td>0.0000</td><td>0.0000</td><td>60.6381</td></tr><tr><td>79.947.100-0</td><td>SQM Industrial S.A.</td><td>Chile</td><td>US\)</td><td>99.0470</td><td>0.9530</td><td>100.0000</td><td>100.0000</td></tr><tr><td>79.906.120-1</td><td>Isapre Norte Grande Ltda.</td><td>Chile</td><td>Ch\(</td><td>1.0000</td><td>99.0000</td><td>100.0000</td><td>100.0000</td></tr><tr><td>79.876.080-7</td><td>Almacenes y Depósitos Ltda.</td><td>Chile</td><td>Ch\)</td><td>1.0000</td><td>99.0000</td><td>100.0000</td><td>100.0000</td></tr><tr><td>79.770.780-5</td><td>Servicios Integrales de Tránsitos y Transferencias S.A.</td><td>Chile</td><td>US\(</td><td>0.0003</td><td>99.9997</td><td>100.0000</td><td>100.0000</td></tr><tr><td>79.768.170-9</td><td>Soquimich Comercial S.A.</td><td>Chile</td><td>US\)</td><td>0.0000</td><td>60.6383</td><td>60.6383</td><td>60.6383</td></tr><tr><td>79.626.800-K</td><td>SQM Salar S.A.</td><td>Chile</td><td>US\(</td><td>18.1800</td><td>81.8200</td><td>100.0000</td><td>100.0000</td></tr><tr><td>78.053.910-0</td><td>Proinsa Ltda. (3)</td><td>Chile</td><td>Ch\)</td><td>0.0000</td><td>0.0000</td><td>0.0000</td><td>60.5800</td></tr><tr><td>76.534.490-5</td><td>Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A.</td><td>Chile</td><td>Ch\(</td><td>0.0000</td><td>100.0000</td><td>100.0000</td><td>100.0000</td></tr><tr><td>76.425.380-9</td><td>Exploraciones Mineras S.A.</td><td>Chile</td><td>US\)</td><td>0.2691</td><td>99.7309</td><td>100.0000</td><td>100.0000</td></tr><tr><td>76.064.419-6</td><td>Comercial Agrorama Ltda. (4)</td><td>Chile</td><td>Ch\(</td><td>0.0000</td><td>42.4468</td><td>42.4468</td><td>42.4468</td></tr><tr><td>76.145.229-0</td><td>Agrorama S.A.</td><td>Chile</td><td>Ch\)</td><td>0.0000</td><td>60.6387</td><td>60.6387</td><td>60.6387</td></tr><tr><td>76.359.919-1</td><td>Oreoma Estudios SPA</td><td>Chile</td><td>US\(</td><td>51.0000</td><td>0.0000</td><td>51.0000</td><td>51.0000</td></tr><tr><td>76.360.575-2</td><td>Oreoma SPA</td><td>Chile</td><td>US\)</td><td>100.0000</td><td>0.0000</td><td>100.0000</td><td>100.0000</td></tr><tr><td>76.686.311-9</td><td>SQM MaG SpA</td><td>Chile</td><td>US$</td><td>0.0000</td><td>100.0000</td><td>100.0000</td><td>100.0000</td></tr></table>

1) On June 26, 2019, SACAL was liquidated.

2) On March 01, 2019, SQMC Internacional merged with Soquimich Comercial S.A.

3) On April 01, 2019, Proinsa Ltda was liquidated.

4) Comercial Agrorama Ltda was consolidated as it is controlled through the subsidiary Soquimich Comercial S.A.



## 2.6 Investments in associates and joint ventures

## (a) Joint ventures

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

With respect to joint operations, the Company recognizes its direct right to the assets, liabilities, income and expenses of the joint operation and its share of the jointly owned or incurred assets, liabilities, income and expenses.

## (b) Joint ventures and investments in associates

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

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

Changes in associate’s equity are recognized proportionally with a charge or credit to "Other Reserves" and are classified according to their origin. The reporting dates of the associate, the Company and related policies are similar for equivalent transactions and events in similar circumstances. In the event that significant influence is lost, or the investment is sold, or held for sale, the equity method is suspended, until the proportional part of the gain or loss is recognized. If the resulting value under the equity method is negative, the share of profit or loss is reflected as zero in the consolidated financial statements, unless there is a commitment by the Company to restore the capital position of the Company, in which case the related risk provision and expense are recorded.

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



## Note 3 Significant accounting policies

## 3.1 Classification of balances as current and non-current

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

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

## 3.2 Functional and presentation currency

The Company’s consolidated financial statements are presented in United States dollars, which is the Company’s functional and presentation currency and is the currency of the main economic environment in which it operates.

Consequently, the term foreign currency is defined as any currency other than the U.S. dollar.

The consolidated financial statements are presented in thousands of United States dollars without decimals.

## 3.3 Foreign currency translation

## (a) SQM group entities:

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

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

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

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

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



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

<table><tr><td rowspan="2">Currencies</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>US$</td><td>US$</td></tr><tr><td>Brazilian real</td><td>4.02</td><td>3.87</td></tr><tr><td>New Peruvian sol</td><td>3.31</td><td>3.37</td></tr><tr><td>Argentine peso</td><td>59.83</td><td>37.74</td></tr><tr><td>Japanese yen</td><td>108.9</td><td>110.38</td></tr><tr><td>Euro</td><td>0.89</td><td>0.87</td></tr><tr><td>Mexican peso</td><td>18.89</td><td>19.68</td></tr><tr><td>Australian dollar</td><td>1.43</td><td>1.42</td></tr><tr><td>Pound Sterling</td><td>0.76</td><td>0.79</td></tr><tr><td>South African rand</td><td>14.06</td><td>14.35</td></tr><tr><td>Ecuadorian dollar</td><td>1.00</td><td>1.00</td></tr><tr><td>Chilean peso</td><td>748.74</td><td>694.77</td></tr><tr><td>Chinese yuan</td><td>6.98</td><td>6.88</td></tr><tr><td>Indian rupee</td><td>71.31</td><td>69.93</td></tr><tr><td>Thai Baht</td><td>29.97</td><td>32.53</td></tr><tr><td>Turkish lira</td><td>5.94</td><td>5.27</td></tr><tr><td>Polish Zloty</td><td>3.79</td><td>-</td></tr><tr><td>UF(*)</td><td>37.81</td><td>39.68</td></tr></table>

 \( ^{*} \)  US$ per UF

## (b) Transactions and balances

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

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



## 3.4 Consolidated statement of cash flows

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

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

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

## 3.5 Financial assets

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

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

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

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



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

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

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

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

Prior to 2018, The Company evaluated at the date of each report, whether there was objective evidence that any asset or group of financial assets presented any impairment. An asset or group of financial assets presented a deterioration, if and only if, there was objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset or group of these. In order to recognize impairment, the loss event must have an impact on the estimation of future flows of the asset or groups of financial assets.

Beginnings 2018, The Company evaluates expected credit losses associated with its debt instruments carried at amortized cost and fair value through other comprehensive income. The impairment method used depends on whether there has been a significant increase in credit risk.

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

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



## 3.6 Accounting policy for financial liabilities

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

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

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

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

Financial liabilities are recorded as not current when they mature in more than 12 months and as current when they mature in less than 12 months. Interest expenses are recorded in the period in which they are accrued, according to a financial criterion.

## 3.7 Reclassification of financial instruments

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

## 3.8 Financial instrument derecognition

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

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

## 3.9 Derivative and hedging financial instruments

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

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

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

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



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

The fair value of derivative instruments used for hedging purposes is shown in Note 14.3. Changes in the cash flow hedge reserve are classified as a non-current asset or liability if the remaining expiration period of the hedged item is more than 12 months, and as a current asset or liability if the remaining expiration period of the entry is less than 12 months.

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

## a) Fair value hedge

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

## b) Cash flow hedges

The effective portion of the gain or loss on the hedging instrument is initially recognized with a debit or credit to other comprehensive income, while any ineffective portion is immediately recognized with a debit or credit to income, as appropriate.

When a hedging instrument expires, or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative deferred gain or loss and deferred costs of hedging in equity at that time remains in equity until the forecast transaction occurs, resulting in the recognition of a non-financial asset such as inventory. When the forecast transaction is no longer expected to occur, the cumulative gain or loss and deferred costs of hedging that were reported in equity are immediately reclassified to profit or loss.



## 3.10 Derivative financial instruments not considered as hedges

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

The Company continually evaluates the existence of embedded derivatives in both its contracts and in its financial instruments. As of December 31, 2019, and 2018, the Company does not have any embedded derivatives.

## 3.11 Deferred acquisition costs from insurance contracts

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

## 3.12 Classification Leases

Below are accounting policies applied by the Company prior to the adoption of IFRS 16:

## (a) Lease - Finance lease

Leases are classified as finance leases when the Company substantially owns all the risks and rewards inherent in the ownership of the asset. Finance leases are capitalized at the commencement of the lease term at the lower of the fair value of the leased asset and the present value of the minimum lease payments.

Each finance lease payment is apportioned between the liability and the finance charges so as to obtain the constant rate of interest on the remaining balance of the liability. The respective lease obligations, net of finance charges, are included in other non-current liabilities. The interest part of the finance cost is charged to the consolidated financial statements for the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability for each year.

## (b) Lease - Operating lease

Leases where the lessor retains a significant part of the risks and benefits derived from the property are classified as operating leases. Operating lease payments (net of any incentive received by the lessor) should be recognized as an expense in the income statement or capitalized (as appropriate) over the lease term on a straight-line basis.

Below are the Company’s new accounting policies after the adoption of IFRS 16 on January 1, 2019. These have been applied since the initial date of application:

## (i) Right-of-use assets

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



## (ii) Lease liabilities

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

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

## (iii) Short-term leases and low-value asset leases

The Company applies the short-term lease recognition exemption to leases with a lease term of 12 months or less starting on the start date and that don’t have a purchase option. It also applies the low-value asset lease recognition exemptions (i.e., when the underlying asset is below USD$ 5,000). Lease payments in short-term leases and low-value asset leases are recognized as lineal expenses during the lease term.

## (iv) Significant judgments in the determination of the lease term for contracts with renewal options

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

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



## 3.13 Inventory measurement

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

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

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

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

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

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

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



## 3.14 Transactions with non-controlling interests

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

## 3.15 Related party transactions

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

## 3.16 Property, plant and equipment

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

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

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

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

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

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

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

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

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

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

Right-of-use assets (IFRS 16) are recognized in the “property, plant and equipment” line item and are classified within this based on the underlying asset class.



## 3.17 Depreciation of property, plant and equipment

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

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

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

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

<table><tr><td>Classes of property, plant and equipment</td><td>Minimum life or rate (years)</td><td>Maximum life or rate (years)</td><td>Life or average rate in years</td></tr><tr><td>Mining assets</td><td>3</td><td>10</td><td>5</td></tr><tr><td>Energy generating assets</td><td>5</td><td>10</td><td>6</td></tr><tr><td>Buildings</td><td>3</td><td>15</td><td>8</td></tr><tr><td>Supplies and accessories</td><td>2</td><td>10</td><td>3</td></tr><tr><td>Office equipment</td><td>5</td><td>5</td><td>5</td></tr><tr><td>Transport equipment</td><td>2</td><td>2</td><td>2</td></tr><tr><td>Network and communication equipment</td><td>2</td><td>10</td><td>5</td></tr><tr><td>IT equipment</td><td>2</td><td>8</td><td>5</td></tr><tr><td>Machinery, plant and equipment</td><td>1</td><td>15</td><td>7</td></tr><tr><td>Other property, plant and equipment</td><td>1</td><td>10</td><td>5</td></tr></table>

## 3.18 Goodwill

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

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



## 3.19 Intangible assets other than goodwill

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

## (a) Water rights

Water rights acquired by the Company relate to water from natural sources and are recorded at acquisition cost. Given that these assets represent legal rights granted in perpetuity to the Company, they are not amortized, but are subject to annual impairment tests.

## (b) Rights of way for electric lines

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

## (c) Computer software

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

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

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

## (d) Mining property and concession rights

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

## (e) Client portfolio

The period for exploiting these portfolios is limited so they are considered assets with a definite useful life and are therefore subject to amortization.



## 3.20 Research and development expenses

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

## 3.21 Exploration and evaluation expenses

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

## (a) Caliche

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

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

## (b) Metal exploration

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

## (c) Salar de Atacama exploration

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

## (d) Mount Holland exploration

Mount Holland exploration expenses are presented as of December 31, 2018 in non-current assets under "Other Non-Financial Non-Current Assets". As of January 1, 2019 they have been incorporated into Property, Plant and Equipment, specifically in Constructions in progress and primarily consider exploration boreholes and complementary studies for the lithium ore study of the area. These expenses will begin to be amortized in the development stage.

## 3.22 Impairment of non-financial assets

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

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



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

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

To determine the fair value less costs to sell, an appropriate valuation model is used.

Impairment losses from continuing operations are recognized with a debit to profit or loss in the categories of expenses associated with the impaired asset function, except for properties reevaluated previously where the revaluation was taken to equity.

For assets other than acquired goodwill, an annual evaluation is carried out to determine whether any previously recognized impairment losses have already decreased or ceased to exist. If this should be the case, the recoverable amount is estimated. A previously recognized impairment loss is only reversed if there have been changes in the estimates used to determine the asset’s recoverable amount since the last time an impairment loss was recognized. If this is the case, the carrying value of the asset is increased to its recoverable amount. This increased amount cannot exceed the carrying value that would have been determined, net of depreciation, if an asset impairment loss had not been recognized in prior years. This reversal is recognized with a credit to profit or loss.

Assets with indefinite lives are assessed for impairment annually.

## 3.23 Minimum dividend

As required by Chilean law and regulations, our dividend policy is decided upon from time to time by our Board of Directors and is announced at the Annual Ordinary Shareholders' Meeting, which is generally held in April of each year. Shareholder approval of the dividend policy is not required. However, each year the Board must submit the declaration of the final dividend or dividends in respect of the preceding year, consistent with the then-established dividend policy, to the Annual Ordinary Shareholders' Meeting for approval. As required by the Chilean Companies Act, unless otherwise decided by unanimous vote of the holders of issued shares, we must distribute a cash dividend in an amount equal to at least 30% of our consolidated net income for that year (determined in accordance with CMF regulations), unless and to the extent the Company has a deficit in retained earnings. (See Note 20.4)

## 3.24 Earnings per share

The basic earnings per share amounts are calculated by dividing the profit for the year attributable to the ordinary owners of the parent by the weighted average number of ordinary shares outstanding during the year. (See Note 21)

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

## 3.25 Borrowing cost

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

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



## 3.26 Other provisions

Provisions are recognized when:

- The Company has a present obligation or constructive obligation as the result of a past event.

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

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

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

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

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

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

## 3.27 Obligations related to employee termination benefits and pension commitments

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

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

Actuarial gains and losses that may be generated by variations in defined, pre-established obligations are directly recorded in other comprehensive income.

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

The discount rate used by the Company for calculating the obligation was 3.680% and 4.642% for the periods ended December 31, 2019 and, 2018, respectively.

The Company’s subsidiary SQM North America has established pension plans for its retired employees that are calculated by measuring the projected obligation using a net salary progressive rate net of adjustments for inflation, mortality and turnover assumptions, deducting the resulting amounts at present value using a 4% interest rate for 2019 and 3.75% for 2018. The net balance of this obligation is presented under the non-current provisions for employee benefits (refer to Note 18.4).

## 3.28 Compensation plans

Compensation plans implemented through benefits provided in share-based payments settled in cash are recognized in the financial statements at their fair value, in accordance with International Financial Reporting Standards No. 2 "Share-based Payments". Changes in the fair value of options granted are recognized with a charge to payroll on a straight-line basis during the period between the date on which these options are granted and the payment date (see Note 18.6).



## 3.29 Revenue recognition

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

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

## (a) Sale of goods

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

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

## (b) Sale of services

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

## (c) Income from dividends

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

## 3.30 Finance income and finance costs

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

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

For finance costs accrued during the construction period that are directly attributable to the acquisition, construction or production of qualifying assets, the effective interest rate related to the project’s specific financing is used. If none exists, the average financing rate of the subsidiary making the investment is used.

Borrowing and financing costs that are directly attributable to the acquisition, construction or production of an asset are capitalized as part of that asset’s cost.



## 3.31 Current income tax and deferred

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

Current taxes are based on the application of the various types of taxes attributable to taxable income for the year.

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

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

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

At each reporting period, the carrying amount of deferred tax assets has been reviewed and reduced to the extent where there will not be sufficient taxable income to allow the recovery of all or a portion of the deferred tax assets. Likewise, as of the date of the consolidated financial statements, deferred tax assets that are not recognized were evaluated and not recognized as it was more likely than not that future taxable income will allow for recovery of the deferred tax asset.

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

The deferred income tax related to entries directly recognized in equity is recognized with an effect on equity and not with an effect on profit or loss.

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

## 3.32 Segment reporting

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

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

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

The following operating segments have been identified by the Company:

- Specialty plant nutrients

- Industrial chemicals

- Iodine and derivatives

- Lithium and derivatives



- Potassium

- Other products and services

## 3.33 Primary accounting criteria, estimates and assumptions

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

In preparing the consolidated financial statements of Sociedad Química y Minera de Chile S.A. and its subsidiaries, Management has made judgments and estimates to quantify certain assets, liabilities, revenues, expenses and commitments included therein, Basically, these estimates refer to:

- Estimated useful lives are determined based on current facts and past experience and take into consideration the expected physical life of the asset, the potential for technological obsolescence, and regulations. (See Notes 3.22, 15 and 16).

- Impairment losses of certain assets - Assets, including property, plant and equipment, exploration assets, goodwill and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts exceed their recoverable amounts. If an impairment assessment is required, the assessment of value in use often requires estimates and assumptions such as discount rates, exchange rates, commodity prices, future capital requirements and future operating performance. Changes in such estimates could impact the recoverable values of these assets. Estimates are reviewed regularly by management (See Notes 15 and 16).

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

Contingencies – The amount recognized as a provision, including legal, contractual, constructive and other exposures or obligations, is the best estimate of the consideration required to settle the related liability, including any related interest charges, considering the risks and uncertainties surrounding the obligation. In addition, contingencies will only be resolved when one or more future events occur or fail to occur. Therefore, the assessment of contingencies inherently involves the exercise of significant judgment and estimates of the outcome of future events. The Company assesses its liabilities and contingencies based upon the best information available, relevant tax laws and other appropriate requirements (See Notes 19 and 22).

- Provisions based on technical studies that cover the different variables affecting products in stock (density and moisture, among others), and related allowance.

- Obsolescence to ensure that the carrying value of inventory is not in excess of the net realizable Inventory valuation requires judgment to determine obsolescence and estimates of provisions for value. (See Note 12).

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

## 3.34 Environment

In general, the Company follows the criteria of considering amounts used in environmental protection and improvement as environmental expenses. However, the cost of facilities, machinery and equipment used for the same purpose are considered property, plant and equipment, as the case may be.



## Note 4 Changes in accounting estimates and policies

## 4.1 Changes in accounting estimates

There have been no changes in the methodologies used to determine such estimates in the periods presented.

## 4.2 Changes in accounting policies

The accounting principles and criteria were applied consistently, except for the following:

(a) The Company’s consolidated financial statements as of December 31, 2019, show changes in the accounting policies over the previous period due to the application of IFRS 16 as of January 1, 2019.

During 2018, management initially measured the impact of adopting IFRS 16 from the date the standard became effective, which it determined by evaluating its lease contracts. These assets should be recorded on the initial application date as right-of-use assets, depending on their nature and lease terms, and they will be amortized over the shorter of their contractual period or useful life.

Contracts were evaluated for evidence of a lease under IFRS 16, and right-of-use assets were identified that included: trucks, cranes, excavators, property (buildings, warehouses, storerooms, land), where SQM has the power to control them during the contract, without the supplier changing its operating instructions.

The Company constructed a debt curve based on the Company’s public debt instruments at the valuation date to determine the discount rate for the estimated initial measurement. The rates used to discount the right-of-use asset and the leasing liability were estimated according to the contract currencies (USD, EURO, Mexican peso, UF and CLP) and terms.

The Company chose to fully apply the modified retrospective approach of the retrospective application version B, where the right-of-use is equal to the liability and there is no equity adjustment.

The values of right-of-use assets and leasing liabilities for contracts classified under IFRS 16 total ThUS$ 45,115 as of January 1, 2019. The weighted average of the incremental lease loan rate applied to lease liabilities recognized in the statement of financial position on the adoption date is 8.08%.

The difference generated between operating lease commitments disclosed applying IAS 17 on December 31, 2018, and lease liabilities recognized on the date of initial application under IFRS 16 is primarily because most payment agreements with suppliers are negotiated on variable terms.

(b) The Company’s consolidated financial statements as of December 31, 2018, show changes in the accounting policies since the previous period due to the application of IFRS 9 as of January 1, 2018.

The application of IFRS 9 had an impact of ThUS$ 2,301 (ThUS$ 1,680 net of deferred taxes) as of January 1, 2018 due to the application of the new impairment model, with balancing entries in equity in accordance with IAS 8.



## Note 5 Financial risk management

## 5.1 Financial risk management policy

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

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

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

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

## 5.2 Risk Factors

## (a) Credit risk

A global economic downturn - and its potentially negative effects on the financial situation of our customers - could extend the payment terms of the Company's receivables by increasing its exposure to credit risk. Although measures are taken to minimize the risk, this global economic situation could mean losses with adverse material effects on the business, financial position or profit and loss of the Company's operations.

To mitigate these risks, the Company maintains active control of collection and uses measures such as the use of credit insurance, letters of credit and prepayments for a portion of receivables.

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

Financial investments correspond to time deposits whose maturity date is greater than 90 days and less than 360 days from the date of investment, so they are not exposed to excessive market risks.

The credit risk associated with receivables is analyzed in Note 14.2 and the associated accounting policy can be found in Note 3.5.

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

<table><tr><td rowspan="2">Financial institution</td><td rowspan="2">Financial assets</td><td colspan="3">Rating Institution</td><td>As of December 31, 2019</td></tr><tr><td>Moody&#x27;s</td><td>S&amp;P</td><td>Fitch</td><td>ThUS\(</td></tr><tr><td>Banco de Chile</td><td>Time deposits</td><td>P-1</td><td>A-1</td><td>-</td><td>50,221</td></tr><tr><td>Banco de Crédito e Inversiones</td><td>Time deposits</td><td>P-1</td><td>A-1</td><td>-</td><td>42,096</td></tr><tr><td>Banco Itau Corpbanca</td><td>Time deposits</td><td>P-2</td><td>A-2</td><td>-</td><td>39,093</td></tr><tr><td>Banco Santander</td><td>Time deposits</td><td>P-1</td><td>A-1</td><td>-</td><td>2,708</td></tr><tr><td>Scotiabank Sud Americano</td><td>Time deposits</td><td>-</td><td>-</td><td>F-1+</td><td>14,428</td></tr><tr><td>Banco Estado</td><td>Time deposits</td><td>P-1</td><td>A-1</td><td>-</td><td>500</td></tr><tr><td>BBVA Banco Francés</td><td>Time deposits</td><td>-</td><td>-</td><td>-</td><td>53</td></tr><tr><td>JP Morgan US dollar Liquidity Fund Institutional</td><td>Investment fund deposits</td><td>Aaa-mf</td><td>AAAm</td><td>AAAmmf</td><td>181,155</td></tr><tr><td>Legg Mason - Western Asset Institutional cash reserves</td><td>Investment fund deposits</td><td>-</td><td>AAAm</td><td>AAAmmf</td><td>146,078</td></tr><tr><td>Total</td><td></td><td></td><td></td><td></td><td>476,332</td></tr></table>



<table><tr><td rowspan="2">Financial institution</td><td rowspan="2">Financial assets</td><td colspan="3">Rating Institution</td><td>As of December 31, 2019</td></tr><tr><td>Moody&#x27;s</td><td>S&amp;P</td><td>Fitch</td><td>ThUS\(</td></tr><tr><td>Banco Scotiabank Sud Americano</td><td>90 days to 1 year</td><td>P-2</td><td>-</td><td>-</td><td>54,180</td></tr><tr><td>Banco de Crédito e Inversiones (*)</td><td>90 days to 1 year</td><td>P-1</td><td>A-1</td><td>-</td><td>178,448</td></tr><tr><td>Banco Santander</td><td>90 days to 1 year</td><td>P-1</td><td>A-1</td><td>-</td><td>74,365</td></tr><tr><td>Banco Itau Corpbanca</td><td>90 days to 1 year</td><td>P-2</td><td>A-2</td><td>-</td><td>127,579</td></tr><tr><td>Banco Security</td><td>90 days to 1 year</td><td>-</td><td>A-2</td><td>F2</td><td>17,965</td></tr><tr><td>Banco de Chile</td><td>90 days to 1 year</td><td>-</td><td>-</td><td>-</td><td>18,026</td></tr><tr><td>Banco Estado</td><td>90 days to 1 year</td><td>P-1</td><td>A-1</td><td>-</td><td>15,126</td></tr><tr><td>Total</td><td></td><td></td><td></td><td></td><td>485,689</td></tr></table>

(*) This includes ThUS$ 1,870 associated with collateral in guarantee used to reduce the liquidity risk.

The following table presents comparative information as of December 2018:

<table><tr><td rowspan="2">Financial institution</td><td rowspan="2">Financial assets</td><td colspan="3">Rating Institution</td><td>As of December 31, 2018</td></tr><tr><td>Moody&#x27;s</td><td>S&amp;P</td><td>Fitch</td><td>ThUS\(</td></tr><tr><td>Banco de Chile</td><td>Time deposits</td><td>P-1</td><td>A-1</td><td>-</td><td>7,305</td></tr><tr><td>Banco de Crédito e Inversiones</td><td>Time deposits</td><td>P-1</td><td>A-1</td><td>-</td><td>27,428</td></tr><tr><td>Banco Itau Corpbanca</td><td>Time deposits</td><td>P-2</td><td>A-2</td><td>-</td><td>61,946</td></tr><tr><td>Banco Santander</td><td>Time deposits</td><td>-</td><td>-</td><td>-</td><td>432</td></tr><tr><td>Banco Estado</td><td>Time deposits</td><td>-</td><td>-</td><td>-</td><td>3,602</td></tr><tr><td>BBVA Banco Francés</td><td>Time deposits</td><td>-</td><td>-</td><td>-</td><td>84</td></tr><tr><td>Nedbank</td><td>Time deposits</td><td>P-3</td><td>B</td><td>-</td><td>647</td></tr><tr><td>Scotiabank Sud Americano</td><td>Time deposits</td><td>-</td><td>-</td><td>-</td><td>86,222</td></tr><tr><td>JP Morgan US dollar Liquidity Fund Institutional</td><td>Investment fund deposits</td><td>Aaa-mf</td><td>AAAm</td><td>AAAmmf</td><td>133,809</td></tr><tr><td>Legg Mason - Western Asset Institutional cash reserves</td><td>Investment fund deposits</td><td>-</td><td>AAAm</td><td>AAAmmf</td><td>132,108</td></tr><tr><td>Total</td><td></td><td></td><td></td><td></td><td>453,583</td></tr></table>

<table><tr><td rowspan="2">Financial institution</td><td rowspan="2">Financial assets</td><td colspan="3">Rating Institution</td><td>As of December 31, 2018</td></tr><tr><td>Moody&#x27;s</td><td>S&amp;P</td><td>Fitch</td><td>ThUS\(</td></tr><tr><td>Banco Scotiabank</td><td>90 days to 1 year</td><td>-</td><td>-</td><td>-</td><td>24,898</td></tr><tr><td>Banco de Crédito e Inversiones</td><td>90 days to 1 year</td><td>P-1</td><td>A-1</td><td>-</td><td>145,834</td></tr><tr><td>Banco Santander</td><td>90 days to 1 year</td><td>P-1</td><td>A-1</td><td>-</td><td>23,124</td></tr><tr><td>Banco Itau Corpbanca</td><td>90 days to 1 year</td><td>P-2</td><td>A-2</td><td>-</td><td>70,719</td></tr><tr><td>Banco Security</td><td>90 days to 1 year</td><td>-</td><td>-</td><td>-</td><td>27,215</td></tr><tr><td>Total</td><td></td><td></td><td></td><td></td><td>291,790</td></tr></table>



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

A significant portion of the Company’s costs, especially salary payments, is associated with the Peso. Therefore, an increase or decrease in its exchange rate with the US Dollar would affect the Company’s profit and loss. By the fourth quarter, approximately US$ 424 million accumulated in expenses are associated with the Peso.

As of December 31, 2019, the Company held derivative instruments classified as hedges of foreign exchange risks associated with 73% of all of the bond liabilities denominated in UF, for a fair value of US$ 18.9 million in favor of the Company. As of December 31, 2018, this value amounted to US$ 3.9 million against the company.

As of December 31, 2019, the exchange rate value for equivalent Pesos to US Dollars was Ch$ 748.74 per US Dollar, as of December 31, 2018, it was Ch$ 694.77 per Dollar.

## (c) Interest rate risk

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

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

As of December 31, 2019, the Company has around 4% of its financial liabilities linked to variations in the LIBOR rate. Therefore, significant rate increases could impact its financial position. A change of 100 basis points in this rate could result in changes to financial expenses of close to US$ 0.06 million. Nevertheless, significant rate increases could make it difficult to access financing at attractive rates for the Company's investment projects.

## (d) Liquidity risk

Liquidity risk relates to the funds needed to comply with payment obligations. The Company’s objective is to maintain financial flexibility through a comfortable balance between fund requirements and cash flows from regular business operations, bank borrowings, bonds, short term investments, and marketable securities, among others. For this purpose, the Company keeps a high liquidity ratio, which enables it to cover current obligations with clearance. On December 31, 2019, this was 3.45.

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

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

SQM constantly monitors the matching of its obligations with its investments, taking due care of maturities of both, from a conservative perspective, as part of this financial risk management strategy. As of December 31, 2019, the Company had unused, available revolving credit facilities with banks, for a total of US$ 477 million.

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



<table><tr><td rowspan="2">As of December 31, 2019 (in millions of US$)</td><td colspan="5">Nature of undiscounted cash flows</td></tr><tr><td>Carrying amount</td><td>Less than 1 year</td><td>1 to 5 years</td><td>Over 5 years</td><td>Total</td></tr><tr><td>Bank borrowings</td><td>70.19</td><td>2.17</td><td>74.87</td><td>-</td><td>77.04</td></tr><tr><td>Unsecured obligations (1)</td><td>1,697.11</td><td>326.34</td><td>614.29</td><td>1,184.38</td><td>2,125.01</td></tr><tr><td>Sub total</td><td>1,767.30</td><td>328.51</td><td>689.16</td><td>1,184.38</td><td>2,202.05</td></tr><tr><td>Hedging liabilities</td><td>23.66</td><td>6.57</td><td>24.33</td><td>32.37</td><td>63.27</td></tr><tr><td>Derivative financial instruments</td><td>3.17</td><td>3.17</td><td>-</td><td>-</td><td>3.17</td></tr><tr><td>Sub total</td><td>26.83</td><td>9.74</td><td>24.33</td><td>32.37</td><td>66.44</td></tr><tr><td>Current and non-current lease liabilities</td><td>37.89</td><td>7.69</td><td>20.03</td><td>10.17</td><td>37.89</td></tr><tr><td>Trade accounts payable and other accounts payable</td><td>205.7</td><td>205.7</td><td>-</td><td>-</td><td>205.70</td></tr><tr><td>Total</td><td>2,037.72</td><td>551.64</td><td>733.52</td><td>1,226.92</td><td>2,512.08</td></tr></table>

(1) Unsecured obligations are presented on a contractual basis and have no effects related to anticipated redemptions.

<table><tr><td rowspan="2">As of December 31, 2018 (in millions of US$)</td><td colspan="5">Nature of undiscounted cash flows</td></tr><tr><td>Carrying amount</td><td>Less than 1 year</td><td>1 to 5 years</td><td>Over 5 years</td><td>Total</td></tr><tr><td>Bank borrowings</td><td>70.25</td><td>4.10</td><td>79.66</td><td>-</td><td>83.76</td></tr><tr><td>Unsecured obligations</td><td>1,273.07</td><td>61.37</td><td>823.76</td><td>713.60</td><td>1,598.73</td></tr><tr><td>Sub total</td><td>1,343.32</td><td>65.47</td><td>903.42</td><td>713.60</td><td>1,682.49</td></tr><tr><td>Hedging liabilities</td><td>17.32</td><td>5.52</td><td>15.64</td><td>29.27</td><td>50.43</td></tr><tr><td>Derivative financial instruments</td><td>2.86</td><td>2.86</td><td>-</td><td>-</td><td>2.86</td></tr><tr><td>Sub total</td><td>20.18</td><td>8.38</td><td>15.64</td><td>29.27</td><td>53.29</td></tr><tr><td>Trade accounts payable and other accounts payable</td><td>163.75</td><td>163.17</td><td>0.58</td><td>-</td><td>163.75</td></tr><tr><td>Total</td><td>1,527.25</td><td>237.02</td><td>919.64</td><td>742.87</td><td>1,899.53</td></tr></table>

## 5.3 Risk measurement

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



## Note 6 Background of companies included in consolidation

## 6.1 Parent’s stand-alone assets and liabilities

<table><tr><td rowspan="2">Parent&#x27;s stand-alone assets and liabilities</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Assets</td><td>4,069,649</td><td>3,737,892</td></tr><tr><td>Liabilities</td><td>(1,983,382)</td><td>(1,652,401)</td></tr><tr><td>Equity</td><td>2,086,267</td><td>2,085,491</td></tr></table>

## 6.2 Parent entity

Pursuant to Article 99 of Law No. 18,045 of the Securities Market, the CMF may determine that a company does not have a controlling entity in accordance with the distribution and dispersion of its ownership. On November 30, 2018, the CMF issued the ordinary letter No. 32,131 whereby it determined that the Pampa Group, do not exert decisive power over the management of the Company since it does not have a predominance in the ownership that allows it to make management decisions. Therefore, the CMF has determined not to consider Pampa Group the controlling entity of the Company and that the Company does not have a controlling entity given its current ownership structure.



## Note 7 Board of Directors, Senior Management and Key management personnel

## 7.1 Board of Directors and Senior Management

## 1) Board of directors

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

As of December 31, 2019, the Company included the following committees and committee members:

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

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

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

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

## 2) Board of Directors’ Compensation

Directors’ compensation differs according to the period during the corresponding year. Thus, from April 27, 2018 to April 24, 2019 (Period 2018-2019), Directors’ compensation was determined by the annual general shareholders’ meeting held on April 27, 2018. While for the period from April 25, 2019 to the date of the next annual general shareholders’ meeting (Period 2019-2020), Directors’ compensation was determined by the annual general shareholders’ meeting held on April 25, 2019. For each of these periods, Directors’ compensation is detailed as follows:

## Period 2018-2019

a) The payment of a fixed, gross and monthly amount of UF 400 in favor of the Chairman of the Board of Directors, of UF 350 in favor of the vice-president of the board of directors and of UF 350 in favor of the remaining six directors and regardless of the number of Board of Directors' Meetings held or not held during the related month.

b) A variable gross amount payable in national currency to the Chairman and Vice President of the Company equivalent to 0.12% of the net liquid income earned by the Company in 2018;

c) A variable gross amount payable in local currency to each Company director, excluding the Chairman and Vice President of the Company, equivalent to 0.06% of the net liquid income earned by the Company in 2019.

## Period 2019:

(i) The payment of a fixed, gross and monthly amount of UF 800 in favor of the Chairman of the Board and of UF 700 in favor of the remaining seven directors and regardless of the number of Board of Directors' Meetings held or not held during the related month.

(ii) A variable gross amount payable in national currency to the Chairman and Vice President of the Company equivalent to 0.12% of the net liquid income earned by the Company in 2019;

(iii) A variable gross amount payable in local currency to each Company director, excluding the Chairman and Vice President of the Company, equivalent to 0.06% of the net liquid income earned by the Company in 2019.



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

Accordingly, the compensation and profit sharing paid to members of the Directors' Committee and the directors as of December 31, 2019 amounted to ThUS$ 4,527 and as of December 31, 2018 to ThUS$ 3,791.

## 3) Directors' Committee

Directors' Committee compensation differs according to the period during the corresponding year. Thus, for the Period 2018-2019, Directors' Committee compensation was determined by the annual general shareholders' meeting held on April 27, 2018. While for the Period 2019-2020, Directors' Committee compensation was determined by the annual general shareholders' meeting held on April 25, 2019. For each of these periods the compensation of the Directors Committee comprises:

## Period 2018-2019

a) The payment of a fixed, gross and monthly amount of UF 113 in favor of each of the 3 directors who were members of the Directors’ Committee, regardless of the number of meetings of the Directors’ Committee that have or have not been held during the month concerned.

b) The payment in domestic currency and in favor of each of the 3 directors of a variable and gross amount equivalent to 0.02% of total net profit that the Company effectively obtains during the 2018 fiscal year.

## Period 2019

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

(ii) The payment in domestic currency and in favor of each of the 3 directors of a variable and gross amount equivalent to 0.02% of total net profit that the Company effectively obtains during the 2019 fiscal year.

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

## 4) Health, Safety and Environmental Matters Committee:

The remuneration of this committee for the 2018–2019 period was composed of the payment of a fixed, gross, monthly amount of UF 50 for each of the 3 directors on the committee regardless of the number of meetings it has held. For the 2019 period, the remuneration for the Health, Safety and Environment Committee corresponds to a fixed, gross, monthly amount of UF 100 for each of the three Directors on the committee regardless of the number of meetings it has held.

## 5) Corporate Governance Committee

The remuneration for this committee for the 2018–2019 period was composed of the payment of a fixed, gross, monthly amount of UF 50 for each of the 3 directors on the committees regardless of the number of meetings it has held. For the 2019 period, the remuneration for the Corporate Governance Committee corresponds to a fixed, gross, monthly amount of UF 100 for each of the three Directors on the committee regardless of the number of meetings it has held.



## 6) Guarantees constituted in favor of the directors

No guarantees have been constituted in favor of the directors.

## 7) Senior management compensation:

a) This includes monthly fixed salary and variable performance bonuses. (See Note 7.2)

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

c) The Company also has retention bonuses for its executives, the value of these bonuses is linked to the Company’s stock price and is payable in cash during the first quarter of 2021 (see Note 18.6)

## 8) Guarantees pledged in favor of the Company’s management

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

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

The Company’s Management and Directors do not receive or have not received any benefit during the ended December 31, 2019 and the year ended December 31, 2018 or compensation for the concept of pensions, life insurance, paid time off, profit sharing, incentives, or benefits due to disability other than those mentioned in the preceding points.

## 7.2 Key management personnel compensation

As of December 31, 2019, there are 124 people occupying key management positions and 123 as of December 31, 2018.

<table><tr><td rowspan="2">Key management personnel compensation</td><td>For the year ended December 31, 2019</td><td>For the year ended December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Key management personnel compensation</td><td>22,598</td><td>27,907</td></tr></table>



## Note 8 Background on companies included in consolidation and non-controlling interests

## 8.1 Background on companies included in consolidation

The following tables detail general information as of December 31, 2019 and, 2018, on the companies in which the group exercises control and significant influence:

<table><tr><td rowspan="2">Subsidiaries</td><td rowspan="2">TAX ID No.</td><td rowspan="2">Address</td><td rowspan="2">Country of Incorporation</td><td rowspan="2">Functional Currency</td><td colspan="3">Ownership Interest</td></tr><tr><td>Direct</td><td>Indirect</td><td>Total</td></tr><tr><td>SQM Nitratos S.A.</td><td>96,592.190-7</td><td>El Trovador 4285 Las Condes</td><td>Chile</td><td>US\(</td><td>99.9999</td><td>0.0001</td><td>100.000</td></tr><tr><td>Proinsa Ltda. (1)</td><td>78.053.910-0</td><td>El Trovador 4285 Las Condes</td><td>Chile</td><td>Ch\)</td><td>-</td><td>-</td><td>-</td></tr><tr><td>SQM Potasio S.A.</td><td>96,651.060-9</td><td>El Trovador 4285 Las Condes</td><td>Chile</td><td>US\(</td><td>99.9999</td><td>-</td><td>100.000</td></tr><tr><td>Serv. Integrales de Tránsito y Transf. S.A.</td><td>79.770.780-5</td><td>Arturo Prat 1060, Tocopilla</td><td>Chile</td><td>US\)</td><td>0.00034</td><td>99.99966</td><td>100.000</td></tr><tr><td>Isapre Norte Grande Ltda.</td><td>79.906.120-1</td><td>Anibal Pinto 3228, Antofagasta</td><td>Chile</td><td>Ch\(</td><td>1.000</td><td>99.000</td><td>100.000</td></tr><tr><td>Ajay SQM Chile S.A.</td><td>96,592.180-K</td><td>Av. Pdt. Eduardo Frei 4900, Santiago</td><td>Chile</td><td>US\)</td><td>51.000</td><td>-</td><td>51.000</td></tr><tr><td>Almacenes y Depósitos Ltda.</td><td>79,876.080-7</td><td>El Trovador 4285 Las Condes</td><td>Chile</td><td>Ch\(</td><td>1.000</td><td>99.000</td><td>100.000</td></tr><tr><td>SQM Salar S.A.</td><td>79,626.800-K</td><td>El Trovador 4285 Las Condes</td><td>Chile</td><td>US\)</td><td>18.18</td><td>81.820</td><td>100.000</td></tr><tr><td>SQM Industrial S.A.</td><td>79,947.100-0</td><td>El Trovador 4285 Las Condes</td><td>Chile</td><td>US\(</td><td>99.047</td><td>0.953</td><td>100.000</td></tr><tr><td>Exploraciones Mineras S.A.</td><td>76,425.380-9</td><td>El Trovador 4285 Las Condes</td><td>Chile</td><td>US\)</td><td>0.27</td><td>99.73</td><td>100.000</td></tr><tr><td>Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A.</td><td>76,534.490-5</td><td>Anibal Pinto 3228, Antofagasta</td><td>Chile</td><td>Ch\(</td><td>-</td><td>100.000</td><td>100.000</td></tr><tr><td>Soquimich Comercial S.A.</td><td>79,768.170-9</td><td>El Trovador 4285 Las Condes</td><td>Chile</td><td>US\)</td><td>-</td><td>60.638</td><td>60.638</td></tr><tr><td>Comercial Agroarama Ltda. (2)</td><td>76,064.419-6</td><td>El Trovador 4285 Las Condes</td><td>Chile</td><td>Ch\(</td><td>-</td><td>42.447</td><td>42.447</td></tr><tr><td>Comercial Hydro S.A.</td><td>96,801.610-5</td><td>El Trovador 4285 Las Condes</td><td>Chile</td><td>US\)</td><td>-</td><td>60.638</td><td>60.638</td></tr><tr><td>Agrorama S.A.</td><td>76,145.229-0</td><td>El Trovador 4285 Las Condes</td><td>Chile</td><td>Ch\(</td><td>-</td><td>60.639</td><td>60.639</td></tr><tr><td>Oromoa Estudios SPA</td><td>76,359.919-1</td><td>Apoquindo 3721 OF 131 Las Condes</td><td>Chile</td><td>US\)</td><td>51.000</td><td>-</td><td>51.000</td></tr><tr><td>Oromoa SPA</td><td>76,360.575-2</td><td>Apoquindo 3721 OF 131 Las Condes</td><td>Chile</td><td>US$</td><td>100.000</td><td>-</td><td>100.000</td></tr><tr><td>SQM MaG SpA</td><td>76,686.311-9</td><td>Los Militares 4290, Las Condes</td><td>Chile</td><td>US$</td><td>-</td><td>100.000</td><td>100.000</td></tr><tr><td>SQM North America Corp.</td><td>Foreign</td><td>2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta, GA</td><td>United States of America</td><td>US$</td><td>40.000</td><td>60.000</td><td>100.000</td></tr><tr><td>RS Agro Chemical Trading Corporation A.V.V.</td><td>Foreign</td><td>Caya Ernesto O. Petronia 17, Orangestad</td><td>Aruba</td><td>US$</td><td>98.3333</td><td>1.6667</td><td>100.000</td></tr><tr><td>Nitratos Naturais do Chile Ltda.</td><td>Foreign</td><td>Al. Tocantis 75, 6° Andar, Conunto 608 Edif. West Gate, Alphaville Barrueri, CEP 06455-020, Sao Paulo</td><td>Brazil</td><td>US$</td><td>-</td><td>100.000</td><td>100.000</td></tr><tr><td>Nitrate Corporation of Chile Ltd.</td><td>Foreign</td><td>1 More London Place London SE1 2AF</td><td>United Kingdom</td><td>US$</td><td>-</td><td>100.000</td><td>100.000</td></tr><tr><td>SQM Corporation N.V.</td><td>Foreign</td><td>Pietermaaí 123, P.O. Box 897, Willemstad, Curacao</td><td>Curacao</td><td>US$</td><td>0.0002</td><td>99.9998</td><td>100.000</td></tr><tr><td>SQM Perú S.A.</td><td>Foreign</td><td>Avenida Camino Real N° 348 of. 702, San Isidro, Lima</td><td>Peru</td><td>US$</td><td>0.00907</td><td>99.99093</td><td>100.000</td></tr></table>

(1) On April 01, 2019 the company Proinsa Ltda ceased trading.

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



<table><tr><td rowspan="2">Subsidiaries</td><td rowspan="2">TAX ID No.</td><td rowspan="2">Address</td><td rowspan="2">Country of Incorporation</td><td rowspan="2">Functional Currency</td><td colspan="3">Ownership Interest</td></tr><tr><td>Direct</td><td>Indirect</td><td>Total</td></tr><tr><td>SQM Ecuador S.A.</td><td>Foreign</td><td>Av. José Orantia y Av. Juan Tanca Marengo Edificio Executive Center Piso 2 Oficina 211</td><td>Ecuador</td><td>US\(</td><td>0.004</td><td>99.996</td><td>100.000</td></tr><tr><td>SQM Brasil Ltda.</td><td>Foreign</td><td>Al. Tocantins 75, 6° Andar, Conunto 608 Edif. West Gate, Alphaville Barureri, CEP 06455-020, Sao Paulo</td><td>Brazil</td><td>US\)</td><td>0.840</td><td>99.160</td><td>100.000</td></tr><tr><td>SQI Corporation N.V.</td><td>Foreign</td><td>Pietermaa 123, P.O. Box 897, Willemstad, Curacao</td><td>Curacao</td><td>US\(</td><td>0.01587</td><td>99.98413</td><td>100.000</td></tr><tr><td>SQMC Holding Corporation.</td><td>Foreign</td><td>2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta</td><td>United States of America</td><td>US\)</td><td>0.100</td><td>99.900</td><td>100.000</td></tr><tr><td>SQM Japan Co. Ltd.</td><td>Foreign</td><td>From 1st Bldg 207, 5-3-10 Minami- Aoyama, Minato-ku, Tokio</td><td>Japan</td><td>US\(</td><td>0.1597</td><td>99.8403</td><td>100.000</td></tr><tr><td>SQM Europe N.V.</td><td>Foreign</td><td>Houtdok-Noordkaai 25a B-2030 Amheres</td><td>Belgium</td><td>US\)</td><td>0.580</td><td>99.420</td><td>100.000</td></tr><tr><td>SQM Italia SRL</td><td>Foreign</td><td>Via A. Meucci, 5 500 15 Grassina Firenze</td><td>Italy</td><td>US\(</td><td>-</td><td>100.000</td><td>100.000</td></tr><tr><td>SQM Indonesia S.A.</td><td>Foreign</td><td>Perumahan Bumi Dirgantara Permai, Jl Suryadarma Blok Aw No 15 Rt 01/09 17436 Jatisari Pondok Gede</td><td>Indonesia</td><td>US\)</td><td>-</td><td>80.000</td><td>80.000</td></tr><tr><td>North American Trading Company</td><td>Foreign</td><td>2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta, GA</td><td>United States of America</td><td>US\(</td><td>-</td><td>100.000</td><td>100.000</td></tr><tr><td>SQM Virginia LLC</td><td>Foreign</td><td>2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta, GA</td><td>United States of America</td><td>US\)</td><td>-</td><td>100.000</td><td>100.000</td></tr><tr><td>SQM Comercial de México S.A. de C.V.</td><td>Foreign</td><td>Av. Moctezuma 144-4 Ciudad del Sol. CP 45050, Zapopan, Jalisco México</td><td>Mexico</td><td>US\(</td><td>0.01</td><td>99.990</td><td>100.000</td></tr><tr><td>SQM Investment Corporation N.V.</td><td>Foreign</td><td>Pietermaa 123, P.O. Box 897, Willemstad, Curacao</td><td>Curacao</td><td>US\)</td><td>1.000</td><td>99.000</td><td>100.000</td></tr><tr><td>Royal Seed Trading Corporation A.V.V.</td><td>Foreign</td><td>Caya Ernesto O. Petronia 17, Orangestad</td><td>Aruba</td><td>US\(</td><td>1.670</td><td>98.330</td><td>100.000</td></tr><tr><td>SQM Lithium Specialties Limited Partnership</td><td>Foreign</td><td>2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta, GA</td><td>United States of America</td><td>US\)</td><td>-</td><td>100.000</td><td>100.000</td></tr><tr><td>Soquimich SRL Argentina</td><td>Foreign</td><td>Espejo 65 Oficina 6 - 5500 Mendoza</td><td>Argentina</td><td>US\(</td><td>-</td><td>100.000</td><td>100.000</td></tr><tr><td>Comercial Caimán Internacional S.A.</td><td>Foreign</td><td>Edificio Plaza Bancomer</td><td>Panama</td><td>US\)</td><td>-</td><td>100.000</td><td>100.000</td></tr><tr><td>SQM France S.A.</td><td>Foreign</td><td>ZAC des Pommiers 27930 FAUVILLE</td><td>France</td><td>US\(</td><td>-</td><td>100.000</td><td>100.000</td></tr><tr><td>Administración y Servicios Santiago S.A. de C.V.</td><td>Foreign</td><td>Av. Moctezuma 144-4 Ciudad del Sol. CP 45050, Zapopan, Jalisco México</td><td>Mexico</td><td>US\)</td><td>-</td><td>100.000</td><td>100.000</td></tr><tr><td>SQM Nitratos México S.A. de C.V.</td><td>Foreign</td><td>Av. Moctezuma 144-4 Ciudad del Sol. CP 45050, Zapopan, Jalisco México</td><td>Mexico</td><td>US\(</td><td>-</td><td>100.000</td><td>100.000</td></tr><tr><td>SQM Australia PTY</td><td>Foreign</td><td>Level 16, 201 Elizabeth Street Sydney</td><td>Australia</td><td>US\)</td><td>-</td><td>100.000</td><td>100.000</td></tr><tr><td>SACAL S.A. (3)</td><td>Foreign</td><td>Av. Leandro N. Alem 882, piso 13 Buenos Aires</td><td>Argentina</td><td>Ars</td><td>-</td><td>0.000</td><td>0.000</td></tr></table>

(3) On June 26, 2019 SACAL S.A. ceased trading.



<table><tr><td rowspan="2">Subsidiaries</td><td rowspan="2">TAX ID No.</td><td rowspan="2">Address</td><td rowspan="2">Country of Incorporation</td><td rowspan="2">Functional Currency</td><td colspan="3">Ownership Interest</td></tr><tr><td>Direct</td><td>Indirect</td><td>Total</td></tr><tr><td>Soquimich European Holding B.V.</td><td>Foreign</td><td>Loacallellikade 1 Parnassustoren 1076 AZ Amsterdam</td><td>Holland</td><td>US\(</td><td>-</td><td>100.000</td><td>100.000</td></tr><tr><td>SQM Iberian S.A</td><td>Foreign</td><td>Provenza 251 Principal 1a CP 08008, Barcelona</td><td>Spain</td><td>US\)</td><td>-</td><td>100.000</td><td>100.000</td></tr><tr><td>SQM Africa Pty Ltd.</td><td>Foreign</td><td>Tramore House, 3 Werford Office Park, Waterford Drive, 2191 Fourways, Johannesburg</td><td>South Africa</td><td>US\(</td><td>-</td><td>100.000</td><td>100.000</td></tr><tr><td>SQM Oceania Pty Ltd.</td><td>Foreign</td><td>Level 9, 50 Park Street, Sydney NSW 2000, Sydney</td><td>Australia</td><td>US\)</td><td>-</td><td>100.000</td><td>100.000</td></tr><tr><td>SQM Beijing Commercial Co. Ltd.</td><td>Foreign</td><td>Room 1001C, CBD International Mansion N 16 Yong an Dong Li, Jian Wai Ave Beijing 100022, P.R.</td><td>China</td><td>US\(</td><td>-</td><td>100.000</td><td>100.000</td></tr><tr><td>SQM Thailand Limited</td><td>Foreign</td><td>Unit 2962, Level 29, N° 388, Exchange Tower Sukhumvit Road, Klongtoey Bangkok</td><td>Thailand</td><td>US\)</td><td>-</td><td>99.996</td><td>99.996</td></tr><tr><td>SQM Colombia SAS</td><td>Foreign</td><td>Cra 7 No 32 - 33 piso 29 Pxb: (571) 3384904 Fax: (571) 3384905</td><td>Colombia</td><td>US\(</td><td>-</td><td>100.000</td><td>100.000</td></tr><tr><td>SQM International N.V.</td><td>Foreign</td><td>Bogotá D.C. - Colombia.</td><td>Belgium</td><td>US\)</td><td>0.580</td><td>99.420</td><td>100.000</td></tr><tr><td>SQM (Shanghai) Chemicals Co. Ltd.</td><td>Foreign</td><td>Houtdok-Noordkaai 25a B-2030 Amberes</td><td>China</td><td>US$</td><td>-</td><td>100.000</td><td>100.000</td></tr></table>



## 8.2 Assets, liabilities, results of consolidated subsidiaries as of December 31, 2019

<table><tr><td rowspan="3">Subsidiaries</td><td colspan="2">Assets</td><td colspan="2">Liabilities</td><td rowspan="2">Revenue</td><td rowspan="2">Profit (loss)</td><td rowspan="2">Comprehensive income (loss)</td></tr><tr><td>Currents</td><td>Non-currents</td><td>Currents</td><td>Non-currents</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>$ ThUS\)</td></tr><tr><td>SQM Nitratos S.A.</td><td>368,474</td><td>41,688</td><td>292,535</td><td>3,521</td><td>167,481</td><td>39,530</td><td>39,440</td></tr><tr><td>Proinsa Ltda.</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>SQM Potasio S.A.</td><td>14,983</td><td>978,525</td><td>116,734</td><td>23,317</td><td>3,350</td><td>125,975</td><td>125,334</td></tr><tr><td>Serv. Integrales de Tránsito y Transf. S.A.</td><td>19,317</td><td>36,025</td><td>50,229</td><td>2,075</td><td>30,061</td><td>(2,650)</td><td>(2,703)</td></tr><tr><td>Isapre Norte Grande Ltda.</td><td>809</td><td>604</td><td>684</td><td>153</td><td>3,816</td><td>25</td><td>(2)</td></tr><tr><td>Ajay SQM Chile S.A.</td><td>17,780</td><td>1,259</td><td>1,284</td><td>374</td><td>24,883</td><td>1,510</td><td>1,510</td></tr><tr><td>Almacenes y Depósitos Ltda.</td><td>243</td><td>45</td><td>-</td><td>-</td><td>-</td><td>(8)</td><td>(85)</td></tr><tr><td>SQM Salar S.A.</td><td>734,837</td><td>886,099</td><td>549,726</td><td>201,273</td><td>775,010</td><td>153,550</td><td>152,781</td></tr><tr><td>SQM Industrial S.A.</td><td>833,283</td><td>766,097</td><td>497,377</td><td>120,741</td><td>752,107</td><td>105,198</td><td>103,894</td></tr><tr><td>Exploraciones Mineras S.A.</td><td>3,099</td><td>31,081</td><td>6,296</td><td>-</td><td>-</td><td>(213)</td><td>(213)</td></tr><tr><td>Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A.</td><td>184</td><td>570</td><td>305</td><td>338</td><td>2,341</td><td>17</td><td>(14)</td></tr><tr><td>Soquimich Comercial S.A.</td><td>134,808</td><td>15,448</td><td>41,104</td><td>12,349</td><td>124,787</td><td>5,079</td><td>5,072</td></tr><tr><td>Comercial Agrorama Ltda.</td><td>862</td><td>1,313</td><td>4,467</td><td>19</td><td>2,755</td><td>(836)</td><td>(837)</td></tr><tr><td>Comercial Hydro S.A.</td><td>4,791</td><td>21</td><td>12</td><td>6</td><td>28</td><td>18</td><td>18</td></tr><tr><td>Agrorama S.A.</td><td>669</td><td>-</td><td>6,133</td><td>9</td><td>3,146</td><td>(1,407)</td><td>(1,376)</td></tr><tr><td>Orcoma SpA</td><td>-</td><td>2,360</td><td>14</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Orcoma Estudio SpA</td><td>156</td><td>4,522</td><td>29</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>SQM MaG SPA</td><td>1,955</td><td>615</td><td>1,888</td><td>2</td><td>2,888</td><td>412</td><td>412</td></tr><tr><td>SQM North America Corp.</td><td>115,924</td><td>19,656</td><td>98,332</td><td>2,751</td><td>241,102</td><td>537</td><td>(214)</td></tr><tr><td>RS Agro Chemical Trading Corporation A.V.V.</td><td>5,155</td><td>-</td><td>64</td><td>-</td><td>-</td><td>(25)</td><td>(25)</td></tr><tr><td>Nitratos Naturais do Chile Ltda.</td><td>2</td><td>135</td><td>3,314</td><td>-</td><td>-</td><td>7</td><td>7</td></tr><tr><td>Nitrate Corporation of Chile Ltd.</td><td>5,076</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>SQM Corporation N.V.</td><td>7,696</td><td>160,381</td><td>3,594</td><td>-</td><td>-</td><td>12,376</td><td>12,308</td></tr><tr><td>SQM Peru S.A.</td><td>29</td><td>-</td><td>80</td><td>-</td><td>-</td><td>(141)</td><td>(141)</td></tr><tr><td>SQM Ecuador S.A.</td><td>31,603</td><td>712</td><td>28,508</td><td>70</td><td>38,131</td><td>818</td><td>818</td></tr><tr><td>SQM Brasil Ltda.</td><td>194</td><td>-</td><td>598</td><td>2,250</td><td>-</td><td>(231)</td><td>(231)</td></tr><tr><td>SQI Corporation N.V.</td><td>56</td><td>34</td><td>77</td><td>-</td><td>-</td><td>(3)</td><td>(3)</td></tr><tr><td>Subtotal</td><td>2,301,985</td><td>2,947,190</td><td>1,703,384</td><td>369,248</td><td>2,171,886</td><td>439,538</td><td>435,750</td></tr></table>



<table><tr><td rowspan="3">Subsidiaries</td><td colspan="2">Assets</td><td colspan="2">Liabilities</td><td rowspan="2">Revenue</td><td rowspan="2">Profit (loss)</td><td rowspan="2">Comprehensive income (loss) Currents</td></tr><tr><td>Currents</td><td>Non-currents</td><td>Currents</td><td>Non-currents</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>THUS\(</td></tr><tr><td>SQMC Holding Corporation L.L.P.</td><td>28,889</td><td>16,190</td><td>1,687</td><td>-</td><td>-</td><td>2,585</td><td>2,585</td></tr><tr><td>SQM Japan Co. Ltd.</td><td>68,805</td><td>228</td><td>66,015</td><td>201</td><td>168,557</td><td>270</td><td>270</td></tr><tr><td>SQM Europe N.V.</td><td>429,926</td><td>4,608</td><td>361,059</td><td>2,824</td><td>729,730</td><td>5,387</td><td>5,387</td></tr><tr><td>SQM Italia SRL</td><td>1,158</td><td>-</td><td>15</td><td>-</td><td>-</td><td>5</td><td>5</td></tr><tr><td>SQM Indonesia S.A.</td><td>3</td><td>-</td><td>1</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>North American Trading Company</td><td>157</td><td>145</td><td>39</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>SQM Virginia LLC</td><td>14,804</td><td>14,345</td><td>14,804</td><td>-</td><td>-</td><td>(1)</td><td>(1)</td></tr><tr><td>SQM Comercial de México S.A. de C.V.</td><td>102,068</td><td>7,597</td><td>72,023</td><td>2,387</td><td>216,185</td><td>2,983</td><td>2,983</td></tr><tr><td>SQM Investment Corporation N.V.</td><td>13,811</td><td>30,888</td><td>5,518</td><td>975</td><td>-</td><td>(74)</td><td>(74)</td></tr><tr><td>Royal Seed Trading Corporation A.V.V.</td><td>44</td><td>-</td><td>18,834</td><td>-</td><td>-</td><td>(42)</td><td>(42)</td></tr><tr><td>SQM Lithium Specialties LLP</td><td>15,752</td><td>3</td><td>1,264</td><td>-</td><td>-</td><td>(1)</td><td>(1)</td></tr><tr><td>Soquimich SRL Argentina</td><td>57</td><td>-</td><td>165</td><td>-</td><td>-</td><td>(24)</td><td>(24)</td></tr><tr><td>Comercial Caimán Internacional S.A.</td><td>256</td><td>-</td><td>1,122</td><td>-</td><td>-</td><td>(5)</td><td>(5)</td></tr><tr><td>SQM France S.A.</td><td>345</td><td>6</td><td>114</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Administración y Servicios Santiago S.A. de C.V.</td><td>235</td><td>72</td><td>402</td><td>211</td><td>3,463</td><td>21</td><td>21</td></tr><tr><td>SQM Nitratos México S.A. de C.V.</td><td>140</td><td>18</td><td>97</td><td>18</td><td>1,008</td><td>13</td><td>13</td></tr><tr><td>Soquimich European Holding B.V.</td><td>5,851</td><td>174,968</td><td>1,299</td><td>30,802</td><td>-</td><td>11,750</td><td>11,682</td></tr><tr><td>SQM Iberian S.A.</td><td>52,750</td><td>2,350</td><td>41,680</td><td>4</td><td>105,634</td><td>361</td><td>361</td></tr><tr><td>SQM Africa Pty Ltd.</td><td>57,639</td><td>1,728</td><td>47,594</td><td>-</td><td>63,567</td><td>(939)</td><td>(939)</td></tr><tr><td>SQM Oceania Pty Ltd.</td><td>5,440</td><td>-</td><td>3,459</td><td>-</td><td>2,085</td><td>444</td><td>444</td></tr><tr><td>SQM Beijing Commercial Co. Ltd.</td><td>11,723</td><td>20</td><td>9,695</td><td>-</td><td>14,487</td><td>(148)</td><td>(148)</td></tr><tr><td>SQM Thailand Limited</td><td>4,912</td><td>11</td><td>1,081</td><td>-</td><td>5,354</td><td>369</td><td>369</td></tr><tr><td>SQM Colombia SAS</td><td>9,505</td><td>151</td><td>10,089</td><td>37</td><td>7,574</td><td>(439)</td><td>(439)</td></tr><tr><td>Sacal S.A.</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>SQM International</td><td>40,652</td><td>831</td><td>32,549</td><td>-</td><td>75,229</td><td>800</td><td>800</td></tr><tr><td>SQM Shanghai Chemicals Co. Ltd.</td><td>36,250</td><td>133</td><td>34,367</td><td>-</td><td>77,599</td><td>(73)</td><td>(74)</td></tr><tr><td>SQM Australia Pty Ltd.</td><td>12,113</td><td>108,068</td><td>5,661</td><td>56</td><td>-</td><td>(2,030)</td><td>(2,030)</td></tr><tr><td>Subtotal</td><td>913,285</td><td>362,360</td><td>730,633</td><td>37,515</td><td>1,470,472</td><td>21,212</td><td>21,143</td></tr><tr><td>Total</td><td>3,215,270</td><td>3,309,550</td><td>2,434,017</td><td>406,763</td><td>3,642,358</td><td>460,750</td><td>456,893</td></tr></table>



## 8.2 Assets, liabilities, results of consolidated subsidiaries as of December 31, 2018

<table><tr><td rowspan="3">Subsidiaries</td><td colspan="2">Assets</td><td colspan="2">Liabilities</td><td rowspan="2">Revenue</td><td rowspan="2">Profit (loss)</td><td rowspan="2">Comprehensive income (loss) Currents</td></tr><tr><td>Currents</td><td>Non-currents</td><td>Currents</td><td>Non-currents</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>$ ThUS\)</td></tr><tr><td>SQM Nitratos S.A.</td><td>364,492</td><td>33,716</td><td>310,062</td><td>1,621</td><td>185,487</td><td>32,532</td><td>32,546</td></tr><tr><td>Proinsa Ltda.</td><td>52</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>SQMC Internacional Ltda.</td><td>193</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(1)</td><td>(1)</td></tr><tr><td>SQM Potasio S.A.</td><td>38,237</td><td>935,027</td><td>123,838</td><td>23,180</td><td>3,270</td><td>271,247</td><td>270,514</td></tr><tr><td>Serv. Integrales de Tránsito y Transf. S.A.</td><td>62,355</td><td>37,594</td><td>92,154</td><td>2,054</td><td>33,392</td><td>134</td><td>118</td></tr><tr><td>Isapre Norte Grande Ltda.</td><td>553</td><td>754</td><td>551</td><td>152</td><td>3,444</td><td>30</td><td>(42)</td></tr><tr><td>Ajay SQM Chile S.A.</td><td>18,259</td><td>1,298</td><td>1,497</td><td>389</td><td>32,758</td><td>2,400</td><td>2,400</td></tr><tr><td>Almacenes y Depósitos Ltda.</td><td>264</td><td>46</td><td>-</td><td>-</td><td>-</td><td>(10)</td><td>(142)</td></tr><tr><td>SQM Salar S.A.</td><td>671,086</td><td>849,377</td><td>512,964</td><td>189,267</td><td>1,035,046</td><td>326,152</td><td>325,263</td></tr><tr><td>SQM Industrial S.A.</td><td>904,802</td><td>702,606</td><td>489,063</td><td>100,914</td><td>779,692</td><td>82,638</td><td>82,267</td></tr><tr><td>Exploraciones Mineras S.A.</td><td>3,137</td><td>30,999</td><td>6,039</td><td>-</td><td>-</td><td>2,071</td><td>2,071</td></tr><tr><td>Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A.</td><td>270</td><td>571</td><td>417</td><td>292</td><td>2,341</td><td>2</td><td>(19)</td></tr><tr><td>Soquimich Comercial S.A.</td><td>139,210</td><td>13,558</td><td>39,743</td><td>6,692</td><td>136,563</td><td>3,492</td><td>3,466</td></tr><tr><td>Comercial Agrorama Ltda.</td><td>3,966</td><td>1,560</td><td>7,099</td><td>30</td><td>7,639</td><td>(1,061)</td><td>(1,062)</td></tr><tr><td>Comercial Hydro S.A.</td><td>4,897</td><td>28</td><td>40</td><td>8</td><td>25</td><td>119</td><td>119</td></tr><tr><td>Agrorama S.A.</td><td>7,235</td><td>485</td><td>12,086</td><td>48</td><td>9,440</td><td>(1,716)</td><td>(1,700)</td></tr><tr><td>Orcoma SpA</td><td>-</td><td>2,360</td><td>14</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Orcoma Estudio SpA</td><td>296</td><td>4,416</td><td>63</td><td>1</td><td>-</td><td>2</td><td>2</td></tr><tr><td>SQM MaG SPA</td><td>780</td><td>340</td><td>853</td><td>-</td><td>979</td><td>257</td><td>257</td></tr><tr><td>SQM North America Corp.</td><td>113,630</td><td>16,274</td><td>94,939</td><td>254</td><td>271,869</td><td>(1,342)</td><td>(993)</td></tr><tr><td>RS Agro Chemical Trading Corporation A.V.V.</td><td>5,155</td><td>-</td><td>39</td><td>-</td><td>-</td><td>(25)</td><td>(25)</td></tr><tr><td>Nitratos Naturais do Chile Ltda.</td><td>30</td><td>136</td><td>3,349</td><td>-</td><td>-</td><td>127</td><td>127</td></tr><tr><td>Nitrate Corporation of Chile Ltd.</td><td>5,076</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>SQM Corporation N.V.</td><td>7,696</td><td>148,464</td><td>3,586</td><td>-</td><td>-</td><td>22,131</td><td>22,162</td></tr><tr><td>SQM Perú S.A.</td><td>163</td><td>-</td><td>1,166</td><td>-</td><td>-</td><td>(107)</td><td>(107)</td></tr><tr><td>SQM Ecuador S.A.</td><td>24,529</td><td>144</td><td>21,773</td><td>72</td><td>32,181</td><td>766</td><td>766</td></tr><tr><td>SQM Brasil Ltda.</td><td>108</td><td>-</td><td>706</td><td>2,254</td><td>126</td><td>(32)</td><td>(32)</td></tr><tr><td>SQI Corporation N.V.</td><td>56</td><td>31</td><td>72</td><td>-</td><td>-</td><td>(6)</td><td>(6)</td></tr><tr><td>Subtotal</td><td>2,376,527</td><td>2,779,784</td><td>1,722,113</td><td>327,228</td><td>2,534,252</td><td>739,800</td><td>737,949</td></tr></table>



<table><tr><td rowspan="2">Subsidiaries</td><td colspan="2">Assets</td><td colspan="2">Liabilities</td><td rowspan="2">Revenue</td><td rowspan="2">Profit (loss)</td><td rowspan="2">Comprehensive income (loss) Currents</td></tr><tr><td>Currents</td><td>Non-currents</td><td>Currents</td><td>Non-currents</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>SQMC Holding Corporation L.L.P.</td><td>25,692</td><td>16,115</td><td>1,000</td><td>-</td><td>-</td><td>3,084</td><td>3,084</td></tr><tr><td>SQM Japan Co. Ltd.</td><td>78,457</td><td>210</td><td>75,948</td><td>171</td><td>204,313</td><td>208</td><td>208</td></tr><tr><td>SQM Europe N.V.</td><td>412,691</td><td>1,825</td><td>349,252</td><td>-</td><td>985,278</td><td>17,180</td><td>17,180</td></tr><tr><td>SQM Italia SRL</td><td>1,176</td><td>-</td><td>15</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>SQM Indonesia S.A.</td><td>3</td><td>-</td><td>1</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>North American Trading Company</td><td>157</td><td>145</td><td>39</td><td>-</td><td>-</td><td>(1)</td><td>(1)</td></tr><tr><td>SQM Virginia LLC</td><td>14,805</td><td>14,346</td><td>14,805</td><td>-</td><td>-</td><td>(2)</td><td>(2)</td></tr><tr><td>SQM Comercial de México S.A. de C.V.</td><td>110,558</td><td>3,040</td><td>81,325</td><td>-</td><td>198,180</td><td>1,327</td><td>1,327</td></tr><tr><td>SQM Investment Corporation N.V.</td><td>44,476</td><td>86</td><td>5,336</td><td>946</td><td>-</td><td>(624)</td><td>(624)</td></tr><tr><td>Royal Seed Trading Corporation A.V.V.</td><td>86</td><td>-</td><td>18,834</td><td>-</td><td>-</td><td>31</td><td>31</td></tr><tr><td>SQM Lithium Specialties LLP</td><td>15,753</td><td>3</td><td>1,264</td><td>-</td><td>-</td><td>(2)</td><td>(2)</td></tr><tr><td>Soquimich SRL Argentina</td><td>87</td><td>-</td><td>172</td><td>-</td><td>-</td><td>(79)</td><td>(79)</td></tr><tr><td>Comercial Caimán Internacional S.A.</td><td>261</td><td>-</td><td>1,122</td><td>-</td><td>-</td><td>(1)</td><td>(1)</td></tr><tr><td>SQM France S.A.</td><td>345</td><td>6</td><td>114</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Administración y Servicios Santiago S.A. de C.V.</td><td>128</td><td>78</td><td>370</td><td>164</td><td>2,848</td><td>10</td><td>10</td></tr><tr><td>SQM Nitratos México S.A. de C.V.</td><td>90</td><td>7</td><td>56</td><td>10</td><td>763</td><td>12</td><td>12</td></tr><tr><td>Soquimich European Holding B.V.</td><td>4,999</td><td>164,484</td><td>32,047</td><td>-</td><td>-</td><td>25,437</td><td>25,468</td></tr><tr><td>SQM Iberian S.A.</td><td>68,754</td><td>2,235</td><td>57,931</td><td>-</td><td>138,855</td><td>2,995</td><td>2,995</td></tr><tr><td>SQM Africa Pty Ltd.</td><td>59,925</td><td>1,448</td><td>48,663</td><td>-</td><td>106,514</td><td>4,871</td><td>4,871</td></tr><tr><td>SQM Oceania Pty Ltd.</td><td>3,581</td><td>-</td><td>1,990</td><td>-</td><td>2,513</td><td>(527)</td><td>(527)</td></tr><tr><td>SQM Beijing Commercial Co. Ltd.</td><td>12,346</td><td>9</td><td>10,163</td><td>-</td><td>13,779</td><td>(121)</td><td>(121)</td></tr><tr><td>SQM Thailand Limited</td><td>8,302</td><td>7</td><td>4,835</td><td>-</td><td>8,348</td><td>485</td><td>485</td></tr><tr><td>SQM Colombia SAS</td><td>4,592</td><td>279</td><td>4,830</td><td>-</td><td>3,056</td><td>(887)</td><td>(887)</td></tr><tr><td>SQM Australia Pty Ltd.</td><td>29,856</td><td>88,587</td><td>5,005</td><td>26</td><td>-</td><td>562</td><td>562</td></tr><tr><td>Sacal S.A.</td><td>3</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>SQM International</td><td>10,854</td><td>781</td><td>3,502</td><td>-</td><td>3,539</td><td>102</td><td>102</td></tr><tr><td>SQM Shanghai Chemicals Co. Ltd.</td><td>8,437</td><td>36</td><td>6,212</td><td>-</td><td>6,059</td><td>(239)</td><td>(239)</td></tr><tr><td>Subtotal</td><td>916,414</td><td>293,727</td><td>724,831</td><td>1,317</td><td>1,674,045</td><td>53,821</td><td>53,852</td></tr><tr><td>Total</td><td>3,292,941</td><td>3,073,511</td><td>2,446,944</td><td>328,545</td><td>4,208,297</td><td>793,621</td><td>791,801</td></tr></table>



## 8.3 Background on non-controlling interests

<table><tr><td rowspan="3">Subsidiaries</td><td rowspan="3">% of interests in the ownership held by non-controlling interest</td><td colspan="2">Profit (loss) attributable to non-controlling interest</td><td colspan="2">Equity, non-controlling interests</td><td colspan="2">Dividends paid to noncontrolling interests</td></tr><tr><td>As of December 31, 2019</td><td>As of December 31, 2018</td><td>As of December 31, 2019</td><td>As of December 31, 2020</td><td>As of December 31, 2019</td><td>As of December 31,2020</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Proinsa Ltda.</td><td>0.1%</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>SQM Potasio S.A.</td><td>0.00001%</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Ajay SQM Chile S.A.</td><td>49%</td><td>740</td><td>1,176</td><td>8,517</td><td>8,659</td><td>882</td><td>823</td></tr><tr><td>Soquimich Comercial S.A.</td><td>39.3616784%</td><td>1,999</td><td>1,375</td><td>38,103</td><td>41,855</td><td>5,935</td><td>8.910</td></tr><tr><td>Comercial Agrorama Ltda.</td><td>30%</td><td>(251)</td><td>(318)</td><td>(693)</td><td>(481)</td><td>-</td><td>-</td></tr><tr><td>Agrorama S.A.</td><td>0.001%</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Orcoma Estudios SPA</td><td>49%</td><td>-</td><td>-</td><td>2,277</td><td>2,277</td><td>-</td><td>-</td></tr><tr><td>SQM Indonesia S.A.</td><td>20%</td><td>-</td><td>-</td><td>1</td><td>1</td><td>-</td><td>-</td></tr><tr><td>Total</td><td></td><td>2,488</td><td>2,233</td><td>48,205</td><td>52,311</td><td>6,817</td><td>9,733</td></tr></table>



## Note 9 Equity-accounted investees

## 9.1 Investments in associates recognized according to the equity method of accounting

As of December 31, 2019 and 2018, in accordance with criteria established in Note 2,

<table><tr><td rowspan="2">Associates</td><td colspan="2">Equity-accounted investees</td><td colspan="2">Share in profit (loss) of associates and joint ventures accounted for using the equity method</td><td colspan="2">Share in other comprehensive income of associates and joint ventures accounted for using the equity method, net of tax</td><td colspan="2">Share in total other comprehensive income of associates and joint ventures accounted for using the equity method</td></tr><tr><td>As of December 31, 2019</td><td>As of December 31, 2018</td><td>As of December 31, 2019</td><td>As of December 31, 2020</td><td>As of December 31, 2019</td><td>As of December 31,2018</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS$</td><td>ThUS$</td><td>ThUS$</td></tr><tr><td>Abu Dhabi Fertilizer Industries WWL</td><td>11,609</td><td>10,821</td><td>634</td><td>596</td><td>1</td><td>-</td><td>635</td><td>596</td></tr><tr><td>Doktor Tarsa Tarim Sanayi AS</td><td>26,001</td><td>21,582</td><td>3,912</td><td>241</td><td>198</td><td>489</td><td>4,110</td><td>730</td></tr><tr><td>Ajay North America</td><td>14,669</td><td>14,951</td><td>2,871</td><td>3,728</td><td>-</td><td>-</td><td>2,871</td><td>3,728</td></tr><tr><td>Ajay Europe SARL</td><td>7,451</td><td>7,845</td><td>1,165</td><td>1,373</td><td>(179)</td><td>(439)</td><td>986</td><td>934</td></tr><tr><td>Charlee SQM Thailand Co Ltd</td><td>-</td><td>-</td><td>-</td><td>316</td><td>-</td><td>-</td><td>-</td><td>316</td></tr><tr><td>SQM Eastmed Turkey</td><td>623</td><td>310</td><td>354</td><td>370</td><td>(42)</td><td>(21)</td><td>312</td><td>349</td></tr><tr><td>Kore Potash PLC</td><td>24,739</td><td>20,467</td><td>(534)</td><td>(1,543)</td><td>(549)</td><td>(1,206)</td><td>(1,083)</td><td>(2,749)</td></tr><tr><td>Total</td><td>85,092</td><td>75,976</td><td>8,402</td><td>5,081</td><td>(571)</td><td>(1,177)</td><td>7,831</td><td>3,904</td></tr></table>



<table><tr><td rowspan="2">Associate</td><td rowspan="2">Description of the nature of the relationship</td><td rowspan="2">Domicile</td><td rowspan="2">Country of incorporation</td><td rowspan="2">Share of ownership in associates</td><td colspan="2">Dividends received</td></tr><tr><td>For the year ended December 31, 2019</td><td>For the year ended December 31, 2018</td></tr><tr><td>Abu Dhabi Fertilizer Industries WWL</td><td>Distribution and commercialization of specialty plant nutrients in the Middle East.</td><td>PO Box 71871, Abu Dhabi</td><td>United Arab Emirates</td><td>37%</td><td>-</td><td>6,632</td></tr><tr><td>Doktor Tarsa Tarim Sanayi AS</td><td>Distribution and commercialization of specialty plant nutrients in Turkey.</td><td>Organize Sanayi Bölgesi, Ikinci Kısım, 22 caddc TR07100 Antalya</td><td>Turkey</td><td>50%</td><td>-</td><td>-</td></tr><tr><td>Ajay North America</td><td>Production and distribution of iodine derivatives.</td><td>1400 Industry RD Power Springs GA 30129</td><td>United States of America</td><td>49%</td><td>2,796</td><td>2,807</td></tr><tr><td>Ajay Europe SARL</td><td>Production and distribution of iodine derivatives.</td><td>Z.I. du Grand Verger BP 227 53602 Evron Cedex</td><td>France</td><td>50%</td><td>1,055</td><td>811</td></tr><tr><td>Charlee SQM Thailand Co Ltd</td><td>Distribution and commercialization of specialty plant nutrients.</td><td>31 Soi 138 (Meesuk) Llapdrawrd, Bangkapi, 10240 Bangkok</td><td>Thailand</td><td>40%</td><td>-</td><td>362</td></tr><tr><td>SQM Eastmed Turkey</td><td>Production and commercialization of specialty products.</td><td>Organize Sanayi Bölgesi, Ikinci Kısım, 22 caddc TR07100 Antalya</td><td>Turkey</td><td>50%</td><td>-</td><td>-</td></tr><tr><td>Kore Potash Ltd</td><td>Prospection, exploration and mining development.</td><td>L 3 88 William ST Perth, was 6000</td><td>Australia</td><td>19.67%</td><td>-</td><td>-</td></tr><tr><td>Total</td><td></td><td></td><td></td><td></td><td>3,851</td><td>10,612</td></tr></table>



The companies described in the table below are related parties of the following associates:

(1) Doktor Tarsa Tarim Sanayi AS

(2) Terra Tarsa B.V.

(3) Abu Dhabi Fertilizer Industries WWL

<table><tr><td rowspan="2">Associate</td><td rowspan="2">Description of the nature of the relationship</td><td rowspan="2">Domicile</td><td rowspan="2">Country of incorporation</td><td rowspan="2">Share of ownership in associates (*)</td><td colspan="2">Dividends received</td></tr><tr><td>For the year ended December 31, 2019</td><td>For the year ended December 31, 2018</td></tr><tr><td>Terra Tarsa Ukraine LLC (2)</td><td>Distribution and trading of specialty plant nutrients.</td><td>74800 Ukraine, Kakhovka, 4 Yuzhnaya Str.</td><td>Ukraine</td><td>100%</td><td>-</td><td>-</td></tr><tr><td>Terra Tarsa BV (1)</td><td>Distribution and trading of specialty plant nutrients.</td><td>Herikerbergweg 238, Luna Arena, 1101CM Amsterdam PO Box 23393, 1100DW Amsterdam Zuidoost Houtdok-Noordkaai 25a, 2030 Antwerpen, Belgium</td><td>Holland</td><td>50%</td><td>-</td><td>-</td></tr><tr><td>Plantacote NV (1)</td><td>Sale of CRF and production and sales of WSNPK.</td><td>Eski Büyükdere Cad No: 7 GIZ 2000 Plaza K:17 D:67-68 Maslak Sariyer İstambul.</td><td>Belgium</td><td>100%</td><td>-</td><td>-</td></tr><tr><td>Doctochem Tarim Sanayai Ticaret LTD (1)</td><td>Production, distribution and trading of specialty plant nutrition.</td><td>Türkey</td><td>Russian Federation</td><td>100%</td><td>-</td><td>-</td></tr><tr><td>Terra Tarsa Don LLC</td><td>Distribution and sale of specialty fertilizers</td><td>Zorge Street, house 17, 344090, Rostov-on-Don</td><td>Turkish</td><td>100%</td><td>-</td><td>-</td></tr><tr><td>Doktolab Tarim Arastirma San. (1)</td><td>Laboratory services.</td><td>27. Cd. No:2, 07190 Aosb 2. Kasm/Pöşemelat, Antalya, Turkey</td><td>Turkish</td><td>100%</td><td>-</td><td>-</td></tr><tr><td>International Technical and Trading Agencies Co WLL (3)</td><td>Distribution and trading of specialty plant nutrients, in the Middle East.</td><td>P.O Box: 950918 Amman 11195</td><td>Jordan</td><td>50%</td><td>-</td><td>-</td></tr><tr><td>Total</td><td></td><td></td><td></td><td></td><td>-</td><td>-</td></tr></table>

 \( ^{*} \)  This percentage does not consider the shareholdings of the holders of these subsidiaries.



## 9.2 Assets, liabilities, revenue and expenses of associates

<table><tr><td rowspan="4">Associate</td><td colspan="8">As of December 31, 2019</td></tr><tr><td colspan="2">Assets</td><td colspan="2">Liabilities</td><td rowspan="3">Revenue</td><td rowspan="3">Gain (loss) from continuing operations</td><td rowspan="3">Other comprehensive income</td><td rowspan="3">Comprehensive income</td></tr><tr><td colspan="2">Currents</td><td colspan="2">Non-currents</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Abu Dhabi Fertilizer Industries WWL</td><td>28,543</td><td>9,971</td><td>7,133</td><td>-</td><td>31,588</td><td>1,713</td><td>4</td><td>1,717</td></tr><tr><td>Doktor Tarsa Tarim Sanayi AS</td><td>97,797</td><td>15,196</td><td>22,420</td><td>38,522</td><td>93,768</td><td>7,824</td><td>396</td><td>8,220</td></tr><tr><td>Ajay North America</td><td>19,748</td><td>13,250</td><td>3,061</td><td>-</td><td>38,833</td><td>5,860</td><td>-</td><td>-</td></tr><tr><td>Ajay Europe SARL</td><td>19,589</td><td>1,456</td><td>6,144</td><td>-</td><td>35,709</td><td>2,329</td><td>(358)</td><td>1,971</td></tr><tr><td>SQM Eastmed Turkey</td><td>2,718</td><td>1,833</td><td>2,600</td><td>704</td><td>3,086</td><td>709</td><td>(84)</td><td>625</td></tr><tr><td>Kore Potash PLC</td><td>7,938</td><td>119,362</td><td>2,214</td><td>-</td><td>-</td><td>(2,716)</td><td>(2,791)</td><td>(5,507)</td></tr><tr><td>Total</td><td>176,333</td><td>161,068</td><td>43,572</td><td>39,226</td><td>202,984</td><td>15,719</td><td>(2,833)</td><td>7,026</td></tr></table>

<table><tr><td rowspan="4">Associate</td><td colspan="8">As of December 31, 2018</td></tr><tr><td colspan="2">Assets</td><td colspan="2">Liabilities</td><td rowspan="3">Revenue</td><td rowspan="3">Gain (loss) from continuing operations</td><td rowspan="3">Other comprehensive income</td><td rowspan="3">Comprehensive income</td></tr><tr><td colspan="2">Currents</td><td colspan="2">Non-currents</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td></tr><tr><td>Abu Dhabi Fertilizer Industries WWL</td><td>23,496</td><td>11,444</td><td>5,695</td><td>-</td><td>33,098</td><td>1,611</td><td>(1)</td><td>1,610</td></tr><tr><td>Doktor Tarsa Tarim Sanayi AS</td><td>66,498</td><td>12,242</td><td>27,067</td><td>8,509</td><td>74,144</td><td>481</td><td>978</td><td>1,459</td></tr><tr><td>Ajay North America</td><td>21,644</td><td>12,409</td><td>3,542</td><td>-</td><td>40,290</td><td>7,608</td><td>-</td><td>7,608</td></tr><tr><td>Ajay Europe SARL</td><td>21,219</td><td>1,214</td><td>6,743</td><td>-</td><td>36,337</td><td>2,747</td><td>(878)</td><td>1,869</td></tr><tr><td>SQM Eastmed Turkey</td><td>1,724</td><td>2,160</td><td>1,829</td><td>1,434</td><td>3,192</td><td>740</td><td>(42)</td><td>698</td></tr><tr><td>Kore Potash PLC</td><td>6,659</td><td>148,426</td><td>2,180</td><td>-</td><td>-</td><td>(8,198)</td><td>(6,882)</td><td>(15,080)</td></tr><tr><td>Total</td><td>141,240</td><td>187,895</td><td>47,056</td><td>9,943</td><td>187,061</td><td>4,989</td><td>(6,825)</td><td>(1,836)</td></tr></table>



## 9.3 Other information

The Company has no participation in unrecognized losses in investments in associates.

The Company has no investments that are not accounted for according to the equity method.

The basis of preparation of the financial information of associates corresponds to the amounts included in the financial statements in conformity with IFRS.

The equity method was applied to the Statement of Financial Position as of December 31, 2019 and 2018.

## 9.4 Disclosures on interest in associates

## (a) Transactions conducted in 2019:

• In the fourth quarter of 2019, Ajay North America paid total dividends of ThUS$ 5,706.

• In the first quarter of 2019, Ajay Europe SARL paid total dividends of ThUS$ 2,107.

- In July 2019, the Company a capital increase in Kore Potash PLC for ThUS$ 2,600, increasing the share to 19.67% of investment shareholdings.

- On December 11, 2019, Doktor Tarsa Tarim Sanayi AS acquired 100% of shares in Doctochem Tarim Sanayi Ticaret LTD.

## (b) Transactions conducted in 2018:

• During the first quarter, the Company increased its capital in Kore Potash PLC by ThUS$ 3,000.

- In March 2018 Abu Dhabi Fertilizer Industries WLL paid dividends of ThUS$ 10,890. 50% of the distributed dividend was charged to retained earnings generated subsequent to 2014, in line with the Company’s statutes that establish that 37% of the distributed dividend corresponds to SQM. The remaining 50% was charged to retained earnings generated between 2004 and 2014, in line with the entity’s statutes that establish that 50% of the distributed dividend corresponds to SQM.

• In March 2018 Ajay North America paid dividends of ThUS$ 1,432.

- In June 2018 Abu Dhabi Fertilizer Industries WLL paid dividends of ThUS$ 7,034. 50% of the distributed dividend was charged to retained earnings generated subsequent to 2014, in line with the Company’s statutes that establish that 37% of the distributed dividend corresponds to SQM. The remaining 50% was charged to retained earnings generated between 2004 and 2014, in line with the Company’s statutes that establish that 50% of the distributed dividend corresponds to SQM.

• At the close of the second quarter of 2018, Ajay North America paid dividends of ThUS$ 5,728.

• In June 2018 Ajay North Europe SARL paid dividends of ThUS$ 1,622.

• In June 2018 Charlee SQM Thailand Co. Ltd. paid dividends of ThUS$ 906.

- On November 14, 2018, Soquiniche European Holdings B.V. sold its share in Charlee SQM Thailand Co. Ltd., generating a loss of ThUS$ 759.

- In 2018, Doktor Tarsa Tarim Sanayi Ve Ticaret A.S., changed its functional currency from Turkish Lira to the United States Dollar.



## Note 10 Joint Ventures

## 10.1 Policy for the accounting of equity accounted investment in joint ventures

The method for recognizing joint ventures is that in which participation is initially recorded at cost, and subsequently adjusted, considering changes after the acquisition in the portion of the entity’s net assets that correspond to the investor. Profit or loss for the period will include the portion of the entity’s entire profit or loss that correspond to the investor. For these joint ventures there is no quoted market price to measure these investments. (See Note 2.6)

At the date of issuance of these financial statements, SQM is not aware of the existence of any significant contingent liabilities associated with the partnerships in joint ventures.

## 10.2 Disclosures of interest in joint ventures

## a) Operations conducted in 2019

- On January 01, 2019, SQM Vitas Perú changed its functional currency from the Peruvian sol to USD (United States dollar).

• During the fourth quarter del 2019 SQM Vitas Fzco paid dividends of ThUS$ 21,196.

## b) Operations conducted in 2018

- During the first quarter of 2018, Minera Exar S.A. increased its capital by ThUS$ 13,000. The entity is a joint venture and contributions were made on January 25, 2018 (ThUS$ 6,000) and February 14, 2018 (ThUS$ 7,000) by SQM Potasio S.A. and Lithium Americas Corporation (LAC). Both partners share 50% ownership of the respective company, each contributing the same share in these capital increases.

• On March 14, 2018, the company SQM Vitas Plantacote B.V. was closed.

- As of the date, Minera Exar S.A. has changed its functional currency from the Argentine peso to the United States dollar.

- In April 2018, Minera Exar made a new capital increase of ThUS$ 7,000, which was contributed in equal parts by its partners.

- On May 15, 2018, the subsidiary Soquimich European Holdings BV, signed a joint venture agreement with PAVONI & C., SpA in Italy, EUR 5.5 million were paid for a 50% share, generating a lower value of EUR 2.6 million. The functional currency of the joint venture is the Euro.

- On December 31, 2018, the conditions were met for Covalent Lithium Pty Ltd, to be recognized as a separate joint venture. In previous years, the financial statements for this entity were included as part of SQM Australia Pty.

- On December 31, 2018, as part of the investment in Pavoni & C., SpA. the goodwill generated in the purchase of this joint venture by an amount, of ThUS$ 3,206.

- The subsidiary SQM Industrial S.A., recorded an impairment loss of ThUS$ 8,802, corresponding to its Sichuan SQM-Migao Chemical Fertilizer Co, Ltd, joint venture. The impairment is disclosed by netting the value of the aforementioned investment, in the caption “Equity method investments”.

- During December 2018, the Company sold its shares in Minera Exar S.A. and generated a profit before taxes of ThUS$ 14,507.



## 10.3 Investment in joint ventures accounted for under the equity method of accounting

<table><tr><td rowspan="3">Joint venture</td><td rowspan="3">Description of the nature of the relationship</td><td rowspan="3">Domicile</td><td rowspan="3">Country of incorporation</td><td rowspan="3">Share of interest in ownership</td><td colspan="2">Dividends received</td></tr><tr><td>For the year ended December 31, 2019</td><td>For the year ended December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Sichuan SQM Miga0 Chemical Fertilizers Co Ltd.</td><td>Production and distribution of soluble fertilizers.</td><td>Huangjing Road, Dawan Town, Qingbaijiang District, Chengdu Municipality, Sichuan Province 1-2-10, Sardar Patel Road, Secunderabad - 500003 Andhra Pradesh</td><td>China</td><td>50%</td><td>-</td><td>-</td></tr><tr><td>Coromandel SQM India</td><td>Production and distribution of potassium nitrate.</td><td>India</td><td>50%</td><td>-</td><td>-</td><td>-</td></tr><tr><td>SQM Vitas Fzco.</td><td>Production and commercialization of specialty plant and animal nutrition and industrial hygiene.</td><td>Jebel All Free Zone P.O. Box 18222, Dubai</td><td>United Arab Emirates</td><td>50%</td><td>-</td><td>-</td></tr><tr><td>SQM Qingdao Star Corp Nutrition Co. Ltd.</td><td>Production and distribution of nutrient plant solutions with specialties NPK soluble.</td><td>Longquan Town, Jimo City, Qingdao Municipality, Shangdong Province</td><td>China</td><td>50%</td><td>10,598</td><td>-</td></tr><tr><td>SQM Vitas Holland</td><td>Without information production of specialized fertilizers and other products for distribution in Italy and other countries.</td><td>Herikerbergweg 238, 1101 CM Amsterdam Zuidoost</td><td>Holland</td><td>50%</td><td>-</td><td>-</td></tr><tr><td>Pavoni &amp; C. Spa</td><td>products for distribution in Italy and other countries.</td><td>Corso Italia 172, 95129 Catania (CT), Sicilia</td><td>Italy</td><td>50%</td><td>-</td><td>-</td></tr><tr><td>Covalent Lithium Pty Ltd.</td><td>Development and operation of the Mt Holland Lithium project, which will include the construction of a lithium extraction and refining mine</td><td>118, 109 St Georges Tce Perth WA 6000 | PO Box Z5200 St Georges Tce Perth WA 6831</td><td>Australia</td><td>50%</td><td>-</td><td>-</td></tr><tr><td>Total</td><td></td><td></td><td></td><td></td><td>10,598</td><td>-</td></tr></table>



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

(1) SQM Vitas Fzco.

(2) Pavoni & C Spa

<table><tr><td rowspan="3">Joint venture</td><td rowspan="3">Description of the nature of the relationship</td><td rowspan="3">Domicile</td><td rowspan="3">Country of incorporation</td><td rowspan="3">Share of interest in ownership (*)</td><td colspan="2">Dividends received</td></tr><tr><td>For the year ended December 31, 2019</td><td>For the year ended December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>SQM Vitas Brasil Agroindustria (1)</td><td>Production and trading of specialty vegetable and animal nutrition and industrial hygiene.</td><td>Via Cndeias, Km. 01 Sem Numero, Lote 4, Bairro Cia Norte, Candeias, Bahia.</td><td>Brazil</td><td>49.99%</td><td>-</td><td>-</td></tr><tr><td>SQM Vitas Perú S.A.C. (1)</td><td>Production and trading of specialty vegetable and animal nutrition and industrial hygiene</td><td>Av. Juan de Arona 187, Torre B, Oficina 301-II, San Isidro, Lima</td><td>Perú</td><td>50%</td><td>-</td><td>-</td></tr><tr><td>Arpa Speciali S.R.L. (2)</td><td>Production of specialty fertilizers and others for distribution in Italy and other countries.</td><td>Mantova (MN) Via Cremona 27 Int. 25</td><td>Italy</td><td>50.48%</td><td>-</td><td>-</td></tr><tr><td>Total</td><td></td><td></td><td></td><td></td><td>-</td><td>-</td></tr></table>

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



<table><tr><td rowspan="2">Joint Venture</td><td colspan="2">Equity-accounted investees</td><td colspan="2">Share in profit (loss) of associates and joint ventures accounted for using the equity method</td><td colspan="2">Share on other comprehensive income of associates and joint ventures accounted for using the equity method, net of tax</td><td colspan="2">Share on total other comprehensive income of associates and joint ventures accounted for using the equity method</td></tr><tr><td>For the year ended December 31, 2019</td><td>For the year ended December 31, 2018</td><td>For the year ended December 31, 2019</td><td>For the year ended December31, 2018</td><td>For the year ended December 31, 2019</td><td>Share in profit (loss) of associates and joint ventures accounted for using the equity method, net of tax</td><td>For the year ended December 31, 2018</td><td>For the year ended December 31, 2019</td></tr><tr><td>Sichuan SQM MigaO Chemical Fertilizers Co Ltd.</td><td>1,992</td><td>1,992</td><td>(632)</td><td>(650)</td><td>-</td><td>-</td><td>(631)</td><td>(650)</td></tr><tr><td>Coromandel SQM India</td><td>1,568</td><td>1,729</td><td>(98)</td><td>174</td><td>(38)</td><td>(159)</td><td>(136)</td><td>15</td></tr><tr><td>SQM Vitas Fzco.</td><td>9,111</td><td>20,202</td><td>1,797</td><td>1,781</td><td>437</td><td>(903)</td><td>2,234</td><td>878</td></tr><tr><td>SQM Qingdao Star Corp Nutrition Co. Ltd.</td><td>3,464</td><td>3,168</td><td>296</td><td>188</td><td>-</td><td>-</td><td>296</td><td>188</td></tr><tr><td>SQM Vitas Holland</td><td>1,304</td><td>1,345</td><td>(15)</td><td>(14)</td><td>(27)</td><td>(70)</td><td>(42)</td><td>(84)</td></tr><tr><td>Minera Exar S.A. (1)</td><td>-</td><td>-</td><td>-</td><td>(206)</td><td>-</td><td>-</td><td>-</td><td>(206)</td></tr><tr><td>Pavoni &amp; C. Spa</td><td>6,864</td><td>7,084</td><td>36</td><td>(39)</td><td>(255)</td><td>70</td><td>(219)</td><td>31</td></tr><tr><td>Covalent Lithium Pty Ltd.</td><td>40</td><td>53</td><td>-</td><td>36</td><td>(13)</td><td>-</td><td>(13)</td><td>36</td></tr><tr><td>Total</td><td>24,343</td><td>35,573</td><td>1,384</td><td>1,270</td><td>104</td><td>(1,062)</td><td>1,489</td><td>208</td></tr></table>

(1) Minera Exar S.A. was sold in December 2018,

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

<table><tr><td rowspan="2">Joint Venture</td><td colspan="2">Equity-accounted investees</td><td colspan="2">Share in profit (loss) of associates and joint ventures accounted for using the equity method</td><td colspan="2">Share on other comprehensive income of associates and joint ventures accounted for using the equity method, net of tax</td><td colspan="2">Share on total other comprehensive income of associates and joint ventures accounted for using the equity method</td></tr><tr><td>For the year ended December 31, 2019</td><td>For the year ended December 31, 2018</td><td>For the year ended December 31, 2019</td><td>For the year ended December31, 2018</td><td>For the year ended December 31, 2019</td><td>Share in profit (loss) of associates and joint ventures accounted for using the equity method, net of tax</td><td>For the year ended December 31, 2018</td><td>For the year ended December 31, 2019</td></tr><tr><td>SQM Vitas Brasil Agroindustria (1)</td><td>5,347</td><td>5,915</td><td>564</td><td>1,439</td><td>225</td><td>(792)</td><td>338</td><td>647</td></tr><tr><td>SQM Vitas Perú S.A.C. (1)</td><td>1,955</td><td>2,671</td><td>211</td><td>(275)</td><td>661</td><td>(112)</td><td>872</td><td>(387)</td></tr><tr><td>Arpa Speciali S.R.L. (2)</td><td>92</td><td>62</td><td>31</td><td>(44)</td><td>(1)</td><td>-</td><td>30</td><td>(44)</td></tr><tr><td>Total</td><td>7,394</td><td>8,648</td><td>806</td><td>1,120</td><td>435</td><td>(904)</td><td>1,240</td><td>216</td></tr></table>

The following companies are subsidiaries of:

(1) SQM Vitas Fzco.

(2) Pavoni & C. Spa



## 10.4 Assets, liabilities, revenue and expenses from joint ventures:

<table><tr><td rowspan="4">Joint Venture</td><td colspan="8">As of December 31, 2019</td></tr><tr><td colspan="2">Assets</td><td colspan="2">Liabilities</td><td rowspan="3">Revenue</td><td rowspan="3">Gain (loss) from continuing operations</td><td rowspan="3">Other comprehensive income</td><td rowspan="3">Comprehensive income</td></tr><tr><td>Current</td><td>Non-current</td><td>Current</td><td>Non-current</td></tr><tr><td>ThUSS</td><td>ThUSS</td><td>ThUSS</td><td>ThUSS</td><td>ThUSS</td></tr><tr><td>Sichuan SQM Miga Chemical Fertilizers Co Ltd.</td><td>28,668</td><td>5,129</td><td>13,472</td><td>-</td><td>7</td><td>(1,262)</td><td>-</td><td>(1,262)</td></tr><tr><td>Coromandel SQM India</td><td>4,504</td><td>633</td><td>1,704</td><td>-</td><td>8,197</td><td>(197)</td><td>(77)</td><td>(274)</td></tr><tr><td>SQM Vitas Fzco.</td><td>9,695</td><td>20,014</td><td>1,136</td><td>-</td><td>36</td><td>3,595</td><td>(876)</td><td>2,719</td></tr><tr><td>SQM Qingdao Star Corp Nutrition Co. Ltd.</td><td>7,534</td><td>26</td><td>632</td><td>-</td><td>12,003</td><td>592</td><td>-</td><td>592</td></tr><tr><td>SQM Vitas Holland</td><td>2,609</td><td>-</td><td>2</td><td>-</td><td>-</td><td>(30)</td><td>(53)</td><td>(83)</td></tr><tr><td>SQM Vitas Brasil Agroindustria</td><td>46,118</td><td>7,299</td><td>40,334</td><td>-</td><td>87,901</td><td>1,128</td><td>(451)</td><td>677</td></tr><tr><td>SQM Vitas Perú S.A.C.</td><td>29,452</td><td>8,378</td><td>24,855</td><td>6,044</td><td>28,590</td><td>421</td><td>1,322</td><td>1,743</td></tr><tr><td>Pavoni &amp; C. Spa</td><td>9,444</td><td>7,074</td><td>8,466</td><td>735</td><td>14,296</td><td>71</td><td>(510)</td><td>(439)</td></tr><tr><td>Covalent Lithium Pty Ltd.</td><td>1,616</td><td>958</td><td>2,111</td><td>383</td><td>-</td><td>-</td><td>(25)</td><td>(25)</td></tr><tr><td>Total</td><td>119,640</td><td>49,511</td><td>92,712</td><td>7,162</td><td>151,030</td><td>4,318</td><td>(670)</td><td>3,648</td></tr></table>

<table><tr><td rowspan="4">Joint Venture</td><td colspan="8">As of December 31, 2018</td></tr><tr><td colspan="2">Assets</td><td colspan="2">Liabilities</td><td rowspan="3">Revenue</td><td rowspan="3">Gain (loss) from continuing operations</td><td rowspan="3">Other comprehensive income</td><td rowspan="3">Comprehensive income</td></tr><tr><td colspan="2">Current</td><td colspan="2">Non-current</td></tr><tr><td>ThUSS</td><td>ThUSS</td><td>ThUSS</td><td>ThUSS</td></tr><tr><td>Sichuan SQM Miga Chemical Fertilizers Co Ltd.</td><td>28,577</td><td>5,913</td><td>12,902</td><td>-</td><td>16</td><td>(1,301)</td><td>-</td><td>(1,301)</td></tr><tr><td>Coromandel SQM India</td><td>5,905</td><td>852</td><td>3,050</td><td>-</td><td>11,605</td><td>348</td><td>(318)</td><td>30</td></tr><tr><td>SQM Vitas Fzco.</td><td>30,430</td><td>17,592</td><td>2,678</td><td>-</td><td>16,583</td><td>3,561</td><td>(1,806)</td><td>1,755</td></tr><tr><td>SQM Qingdao Star Corp Nutrition Co. Ltd.</td><td>7,754</td><td>114</td><td>1,533</td><td>-</td><td>13,004</td><td>377</td><td>-</td><td>377</td></tr><tr><td>SQM Vitas Holland</td><td>2,692</td><td>-</td><td>1</td><td>-</td><td>-</td><td>(28)</td><td>(139)</td><td>(167)</td></tr><tr><td>SQM Vitas Brasil Agroindustria</td><td>36,648</td><td>7,566</td><td>31,808</td><td>-</td><td>82,625</td><td>2,879</td><td>(1,585)</td><td>1,294</td></tr><tr><td>SQM Vitas Perú S.A.C.</td><td>22,365</td><td>7,785</td><td>18,996</td><td>5,966</td><td>28,619</td><td>(550)</td><td>(223)</td><td>(773)</td></tr><tr><td>Pavoni &amp; C. Spa</td><td>10,062</td><td>6,490</td><td>8,098</td><td>698</td><td>15,461</td><td>(79)</td><td>140</td><td>61</td></tr><tr><td>Covalent Lithium Pty Ltd.</td><td>239</td><td>100</td><td>233</td><td>-</td><td>-</td><td>106</td><td>-</td><td>106</td></tr><tr><td>Total</td><td>144,672</td><td>46,412</td><td>79,299</td><td>6,664</td><td>167,913</td><td>5,313</td><td>(3,931)</td><td>1,382</td></tr></table>



## 10.5 Other Joint Venture disclosures:

<table><tr><td rowspan="2">Joint Venture</td><td colspan="2">Cash and cash equivalents</td><td colspan="2">Other current financial liabilities</td><td colspan="2">Other non-current financial liabilities</td></tr><tr><td>As of December 31, 2019</td><td>As of December 31, 2018</td><td>As of December 31, 2019</td><td>As of December 31, 2020</td><td>As of December 31, 2019</td><td>As of December 31,2020</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS$</td></tr><tr><td>Sichuan SQM Miga Chemical Fertilizers Co Ltd.</td><td>33</td><td>106</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Coromandel SQM India</td><td>2,240</td><td>308</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>SQM Vitas Fzco.</td><td>3,071</td><td>19,312</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>SQM Qingdao Star Corp Nutrition Co. Ltd.</td><td>4,640</td><td>4,543</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>SQM Vitas Holland</td><td>2,609</td><td>2,692</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>SQM Vitals Brasil Agroindustria</td><td>2,101</td><td>1,869</td><td>9,106</td><td>13,380</td><td>-</td><td>-</td></tr><tr><td>SQM Vitals Perú S.A.C.</td><td>225</td><td>371</td><td>258</td><td>3,819</td><td>895</td><td>801</td></tr><tr><td>Pavoni &amp; C. Spa</td><td>314</td><td>407</td><td>5,509</td><td>5,464</td><td>-</td><td>-</td></tr><tr><td>Covalent Lithium Pty Ltd.</td><td>693</td><td>156</td><td>472</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Total</td><td>15,926</td><td>29,764</td><td>15,345</td><td>22,663</td><td>895</td><td>801</td></tr></table>

<table><tr><td rowspan="2">Joint Venture</td><td colspan="2">Depreciation and amortization expense</td><td colspan="2">Interest expense</td><td colspan="2">Income tax benefit (expense) from continuing operations</td></tr><tr><td>For the year ended December 31, 2019</td><td>For the year ended December 31, 2018</td><td>For the year ended December 31, 2019</td><td>For the year ended December31, 2018</td><td>For the year ended December 31, 2019</td><td>Deferred 31, 2018</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS$</td></tr><tr><td>Sichuan SQM Miga Chemical Fertilizers Co Ltd.</td><td>(743)</td><td>(948)</td><td>-</td><td>(1)</td><td>153</td><td>97</td></tr><tr><td>Coromandel SQM India</td><td>(291)</td><td>445</td><td>(4)</td><td>(9)</td><td>(27)</td><td>(38)</td></tr><tr><td>SQM Vitas Fzco.</td><td>-</td><td>(509)</td><td>(7)</td><td>(8)</td><td>-</td><td>-</td></tr><tr><td>SQM Qingdao Star Corp Nutrition Co. Ltd.</td><td>(62)</td><td>(67)</td><td>-</td><td>-</td><td>(241)</td><td>(187)</td></tr><tr><td>SQM Vitals Holland</td><td>-</td><td>-</td><td>(1)</td><td>-</td><td>-</td><td>-</td></tr><tr><td>SQM Vitals Brasil Agroindustria</td><td>(33)</td><td>(408)</td><td>(1,176)</td><td>(886)</td><td>181</td><td>(117)</td></tr><tr><td>SQM Vitals Perú S.A.C.</td><td>(287)</td><td>(347)</td><td>(435)</td><td>(425)</td><td>(316)</td><td>(230)</td></tr><tr><td>Pavoni &amp; C. Spa</td><td>(149)</td><td>(542)</td><td>-</td><td>(335)</td><td>(214)</td><td>-</td></tr><tr><td>Covalent Lithium Pty Ltd.</td><td>(126)</td><td>(16)</td><td>(32)</td><td>(5)</td><td>-</td><td>(46)</td></tr><tr><td>Total</td><td>(1,691)</td><td>(2,392)</td><td>(1,655)</td><td>(1,669)</td><td>(464)</td><td>(521)</td></tr></table>



## 10.6 Joint Ventures

In 2017, we continued to expand our operations outside Chile and, together with our subsidiary SQM Australia Pty, we entered into an agreement to acquire 50% of the assets of the Mount Holland lithium project in Western Australia. We entered into a 50/50 unincorporated joint operation with Kidman Resources Limited (“Kidman”), the Mt Holland Lithium Project, to design, construct and operate a mine, concentrator and refinery to produce approximately 45,000 metric tons of lithium hydroxide per year. Kidman retained the exclusive right to exploit gold within the project area. SQM Australia Pty committed to pay a price of US$ 70 million for the 50% of the Mt Holland assets, which was split into an initial payment of US$15 million and a deferred payment of US$ 55 million, both payments subject to certain conditions precedent. As agreed by the parties, US$ 40 million of a total of US$70 million paid to Kidman was provided directly to the project and SQM Australia paid an additional (i) US$ 10 million as part of the initial payment, and (ii) US$ 30 million once the deferred payment took place. An additional US$ 5 million for Kidman for resolution of legal disputes.

All payments subject to conditions under the purchase agreement with Kidman were executed by December 2018.

This business meets the conditions stipulated in IFRS 11 to be considered a "joint operation", since management has agreed that the rights of the related assets and liabilities relate to a joint arrangement, which states that the joint operators share all interests in the related assets and liabilities in specific proportions. Please refer to material events as of December 31, 2019.



## Note 11 Cash and cash equivalents

## 11.1 Types of cash and cash equivalents

As of December 31, 2019, and 2018, cash and cash equivalents are detailed as follows:

<table><tr><td rowspan="2">Cash</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Cash on hand</td><td>71</td><td>75</td></tr><tr><td>Cash in banks</td><td>105,141</td><td>101,662</td></tr><tr><td>Other demand deposits</td><td>6,986</td><td>746</td></tr><tr><td>Total cash</td><td>112,198</td><td>102,483</td></tr></table>

<table><tr><td rowspan="2">Cash equivalents</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Short-term deposits, classified as cash equivalents</td><td>149,099</td><td>187,666</td></tr><tr><td>Short-term investments, classified as cash equivalents</td><td>327,233</td><td>265,917</td></tr><tr><td>Total cash equivalents</td><td>476,332</td><td>453,583</td></tr><tr><td>Total cash and cash equivalents</td><td>588,530</td><td>556,066</td></tr></table>

## 11.2 Short-term investments, classified as cash equivalents

As of December 31, 2019 and 2018, the short-term investments classified as cash and cash equivalents relate to mutual funds (investment liquidity funds) for investments in:

<table><tr><td rowspan="2">Institution</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Legg Mason - Western Asset Institutional Cash Reserves</td><td>181,155</td><td>132,108</td></tr><tr><td>JP Morgan US dollar Liquidity Fund Institutional</td><td>146,078</td><td>133,809</td></tr><tr><td>Total</td><td>327,233</td><td>265,917</td></tr></table>

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



## 11.3 Information on cash and cash equivalents by currency

As of December 31, 2019 and 2018, information on cash and cash equivalents by currency is detailed as follows:

<table><tr><td rowspan="2">Original currency</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Chilean Peso (*)</td><td>8,240</td><td>157,500</td></tr><tr><td>US Dollar</td><td>558,572</td><td>353,674</td></tr><tr><td>Euro</td><td>3,131</td><td>4,738</td></tr><tr><td>Mexican Peso</td><td>2,103</td><td>1,242</td></tr><tr><td>South African Rand</td><td>3,929</td><td>5,219</td></tr><tr><td>Japanese Yen</td><td>1,559</td><td>1,786</td></tr><tr><td>Peruvian Sol</td><td>4</td><td>1</td></tr><tr><td>Indian rupee</td><td>6</td><td>-</td></tr><tr><td>Chinese Yuan</td><td>2,484</td><td>2,305</td></tr><tr><td>Dirham United Arab Emirates</td><td>-</td><td>1</td></tr><tr><td>Indonesian rupee</td><td>3</td><td>-</td></tr><tr><td>Argentine Peso</td><td>3</td><td>2</td></tr><tr><td>Pound Sterling</td><td>3</td><td>-</td></tr><tr><td>Australian dollar</td><td>8,492</td><td>29,598</td></tr><tr><td>Polish Zloty</td><td>1</td><td>-</td></tr><tr><td>Total</td><td>588,530</td><td>556,066</td></tr></table>

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

## 11.4 Amount restricted (unavailable) cash balances

Cash on hand and cash in banks are available resources, and their carrying value is equal to their fair value.

## Financial assets pledged as collateral

On November 4, 2004, Isapre Norte Grande has a guarantee equivalent to the total amount owed to its subsidiaries and medical suppliers, which is administered and maintained by Banco de Chile.

As of December 31, 2019 and, 2018 pledged assets are as follows

<table><tr><td rowspan="2">Restricted cash balances</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Isapre Norte Grande Ltda.</td><td>551</td><td>712</td></tr><tr><td>Total</td><td>551</td><td>712</td></tr></table>



## 11.5 Short-term deposits, classified as cash equivalents

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

<table><tr><td rowspan="2">Receiver of the deposit</td><td rowspan="2">Type of deposit</td><td rowspan="2">Original currency</td><td rowspan="2">Interest rate</td><td rowspan="2">Placement date</td><td rowspan="2">Maturity</td><td colspan="2">Principal</td><td rowspan="2">Interest accrued to-date</td><td rowspan="2">As of December 31, 2019</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Banco crédito e inversiones</td><td>Fixed term</td><td>US\(</td><td>3.45%</td><td>11-18-2019</td><td>02-13-2020</td><td>18,000</td><td>74</td><td>18,074</td><td></td></tr><tr><td>Banco crédito e inversiones</td><td>Fixed term</td><td>US\)</td><td>2.85%</td><td>12-26-2019</td><td>02-20-2020</td><td>20,000</td><td>8</td><td>20,008</td><td></td></tr><tr><td>Banco de Chile</td><td>Fixed term</td><td>US\(</td><td>3.45%</td><td>11-15-2019</td><td>01-23-2020</td><td>14,000</td><td>62</td><td>14,062</td><td></td></tr><tr><td>Banco de Chile</td><td>Fixed term</td><td>US\)</td><td>3.50%</td><td>11-15-2019</td><td>01-09-2020</td><td>18,000</td><td>80</td><td>18,080</td><td></td></tr><tr><td>Banco de Chile</td><td>Fixed term</td><td>US\(</td><td>3.45%</td><td>11-15-2019</td><td>01-16-2020</td><td>18,000</td><td>79</td><td>18,079</td><td></td></tr><tr><td>Banco Itau Chile</td><td>Fixed term</td><td>US\)</td><td>2.90%</td><td>12-26-2019</td><td>02-20-2020</td><td>33,000</td><td>13</td><td>33,013</td><td></td></tr><tr><td>Scotiabank Sud Americano</td><td>Fixed term</td><td>Ch\(</td><td>2.16%</td><td>12-30-2019</td><td>08-08-2020</td><td>6,812</td><td>-</td><td>6,812</td><td></td></tr><tr><td>Banco crédito e inversiones</td><td>Fixed term</td><td>US\)</td><td>3.51%</td><td>11-21-2019</td><td>01-28-2020</td><td>1,000</td><td>4</td><td>1,004</td><td></td></tr><tr><td>Banco crédito e inversiones</td><td>Fixed term</td><td>US\(</td><td>3.75%</td><td>12-02-2019</td><td>02-27-2020</td><td>2,000</td><td>6</td><td>2,006</td><td></td></tr><tr><td>Banco crédito e inversiones</td><td>Fixed term</td><td>US\)</td><td>3.60%</td><td>11-25-2019</td><td>01-28-2020</td><td>1,000</td><td>4</td><td>1,004</td><td></td></tr><tr><td>Banco Estado</td><td>Fixed term</td><td>US\(</td><td>2.15%</td><td>12-16-2019</td><td>01-06-2020</td><td>500</td><td>-</td><td>500</td><td></td></tr><tr><td>Banco Santander - Santiago</td><td>Fixed term</td><td>US\)</td><td>2.55%</td><td>12-05-2019</td><td>02-04-2020</td><td>1,700</td><td>3</td><td>1,703</td><td></td></tr><tr><td>Corpbanca</td><td>Fixed term</td><td>US\(</td><td>2.55%</td><td>12-16-2019</td><td>01-06-2020</td><td>2,500</td><td>3</td><td>2,503</td><td></td></tr><tr><td>Corpbanca</td><td>Fixed term</td><td>US\)</td><td>3.64%</td><td>11-29-2019</td><td>02-13-2020</td><td>1,500</td><td>5</td><td>1,505</td><td></td></tr><tr><td>Corpbanca</td><td>Fixed term</td><td>US\(</td><td>2.80%</td><td>12-11-2019</td><td>01-28-2020</td><td>2,000</td><td>8</td><td>2,008</td><td></td></tr><tr><td>Banco Santander - Santiago</td><td>Fixed term</td><td>US\)</td><td>2.33%</td><td>10-16-2019</td><td>01-12-2020</td><td>1,000</td><td>5</td><td>1,005</td><td></td></tr><tr><td>Scotiabank Sud Americano</td><td>Fixed term</td><td>US\(</td><td>2.45%</td><td>12-17-2019</td><td>01-13-2020</td><td>3,600</td><td>3</td><td>3,603</td><td></td></tr><tr><td>Scotiabank Sud Americano</td><td>Fixed term</td><td>US\)</td><td>3.20%</td><td>11-13-2019</td><td>01-30-2020</td><td>500</td><td>2</td><td>502</td><td></td></tr><tr><td>Scotiabank Sud Americano</td><td>Fixed term</td><td>US\(</td><td>3.40%</td><td>12-02-2019</td><td>02-27-2020</td><td>2,000</td><td>5</td><td>2,005</td><td></td></tr><tr><td>Scotiabank Sud Americano</td><td>Fixed term</td><td>US\)</td><td>3.45%</td><td>11-18-2019</td><td>01-30-2020</td><td>1,500</td><td>6</td><td>1,506</td><td></td></tr><tr><td>BBVA Banco Francés</td><td>Fixed term</td><td>US\(</td><td>39%</td><td>12-26-2019</td><td>01-27-2020</td><td>52</td><td>1</td><td>53</td><td></td></tr><tr><td>Banco Itaú S.A.</td><td>On demand</td><td>US\)</td><td>8%</td><td>10-17-2019</td><td>12-31-2019</td><td>64</td><td>-</td><td>64</td><td></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td>148,728</td><td>371</td><td>149,099</td><td></td></tr></table>



<table><tr><td rowspan="2">Receiver of the deposit</td><td rowspan="2">Type of deposit</td><td rowspan="2">Original currency</td><td rowspan="2">Interest rate</td><td rowspan="2">Placement date</td><td rowspan="2">Maturity</td><td rowspan="2">Principal</td><td rowspan="2">Interest accrued to-date</td><td rowspan="2">As of December 31, 2018</td></tr><tr></tr><tr><td>Scotiabank</td><td>Fixed term</td><td>Ch\(</td><td>2.50%</td><td>10-18-2018</td><td>01-16-2019</td><td>14,606</td><td>90</td><td>14,696</td></tr><tr><td>Banco Crédito e Inversiones</td><td>Fixed term</td><td>Ch\)</td><td>2.55%</td><td>11-06-2018</td><td>01-09-2019</td><td>19,632</td><td>92</td><td>19,724</td></tr><tr><td>Scotiabank</td><td>Fixed term</td><td>Ch\(</td><td>2.55%</td><td>11-30-2018</td><td>01-03-2019</td><td>14,393</td><td>38</td><td>14,431</td></tr><tr><td>Scotiabank</td><td>Fixed term</td><td>Ch\)</td><td>2.55%</td><td>12-03-2018</td><td>01-03-2019</td><td>11,515</td><td>27</td><td>11,542</td></tr><tr><td>Itau-Corpbanca</td><td>Fixed term</td><td>Ch\(</td><td>2.50%</td><td>12-03-2018</td><td>01-03-2019</td><td>14,393</td><td>34</td><td>14,427</td></tr><tr><td>Itau-Corpbanca</td><td>Fixed term</td><td>Ch\)</td><td>2.50%</td><td>12-07-2018</td><td>01-09-2019</td><td>14,393</td><td>29</td><td>14,422</td></tr><tr><td>Itau-Corpbanca</td><td>Fixed term</td><td>Ch\(</td><td>2.50%</td><td>12-10-2018</td><td>01-09-2019</td><td>12,954</td><td>23</td><td>12,977</td></tr><tr><td>Scotiabank</td><td>Fixed term</td><td>Ch\)</td><td>2.35%</td><td>12-10-2018</td><td>01-09-2019</td><td>12,954</td><td>21</td><td>12,975</td></tr><tr><td>Itau-Corpbanca</td><td>Fixed term</td><td>US\)</td><td>3.06%</td><td>12-11-2018</td><td>01-11-2019</td><td>1,300</td><td>2</td><td>1,302</td></tr><tr><td>Banco Estado</td><td>Fixed term</td><td>US\(</td><td>2.75%</td><td>12-12-2018</td><td>01-15-2019</td><td>1,000</td><td>1</td><td>1,001</td></tr><tr><td>Itau-Corpbanca</td><td>Fixed term</td><td>Ch\)</td><td>2.50%</td><td>12-14-2018</td><td>01-09-2019</td><td>14,392</td><td>20</td><td>14,412</td></tr><tr><td>Scotiabank</td><td>Fixed term</td><td>Ch\(</td><td>2.65%</td><td>12-17-2018</td><td>01-17-2019</td><td>14,393</td><td>18</td><td>14,411</td></tr><tr><td>Scotiabank</td><td>Fixed term</td><td>Ch\)</td><td>2.60%</td><td>12-17-2018</td><td>01-17-2019</td><td>10,892</td><td>13</td><td>10,905</td></tr><tr><td>Banco Crédito e Inversiones</td><td>Fixed term</td><td>US\(</td><td>2.93%</td><td>12-17-2018</td><td>01-31-2019</td><td>1,400</td><td>2</td><td>1,402</td></tr><tr><td>Itau-Corpbanca</td><td>Fixed term</td><td>US\)</td><td>3.30%</td><td>12-17-2018</td><td>01-31-2019</td><td>1,400</td><td>2</td><td>1,402</td></tr><tr><td>Itau-Corpbanca</td><td>Fixed term</td><td>US\(</td><td>3.40%</td><td>12-17-2018</td><td>01-31-2019</td><td>3,000</td><td>4</td><td>3,004</td></tr><tr><td>Banco de Chile</td><td>Fixed term</td><td>US\)</td><td>3.06%</td><td>12-17-2018</td><td>01-31-2019</td><td>1,700</td><td>2</td><td>1,702</td></tr><tr><td>Scotiabank Sud Americano</td><td>Fixed term</td><td>US\(</td><td>2.95%</td><td>12-17-2018</td><td>01-31-2019</td><td>1,500</td><td>2</td><td>1,502</td></tr><tr><td>Banco de Chile</td><td>Fixed term</td><td>US\)</td><td>3.26%</td><td>12-19-2018</td><td>01-31-2019</td><td>800</td><td>1</td><td>801</td></tr><tr><td>Banco Crédito e Inversiones</td><td>Fixed term</td><td>US\(</td><td>3.42%</td><td>12-26-2018</td><td>02-26-2019</td><td>2,800</td><td>1</td><td>2,801</td></tr><tr><td>Banco de Chile</td><td>Fixed term</td><td>US\)</td><td>3.26%</td><td>12-26-2018</td><td>02-26-2019</td><td>2,800</td><td>1</td><td>2,801</td></tr><tr><td>Scotiabank Sud Americano (*)</td><td>Fixed term</td><td>Ch\(</td><td>0.26%</td><td>12-27-2018</td><td>01-07-2019</td><td>1,439</td><td>1</td><td>1,440</td></tr><tr><td>Scotiabank Sud Americano (*)</td><td>Fixed term</td><td>Ch\)</td><td>0.26%</td><td>12-27-2018</td><td>01-14-2019</td><td>2,879</td><td>1</td><td>2,880</td></tr><tr><td>Scotiabank Sud Americano (*)</td><td>Fixed term</td><td>Ch\(</td><td>0.26%</td><td>12-27-2018</td><td>01-21-2019</td><td>1,439</td><td>1</td><td>1,440</td></tr><tr><td>Banco Estado</td><td>Fixed term</td><td>US\)</td><td>3.15%</td><td>12-28-2018</td><td>01-28-2019</td><td>2,000</td><td>1</td><td>2,001</td></tr><tr><td>Banco Estado</td><td>Fixed term</td><td>US\(</td><td>3.15%</td><td>12-28-2018</td><td>01-28-2019</td><td>600</td><td>-</td><td>600</td></tr><tr><td>Banco de Chile</td><td>Fixed term</td><td>US\)</td><td>3.16%</td><td>12-28-2018</td><td>01-28-2019</td><td>2,000</td><td>1</td><td>2,001</td></tr><tr><td>Banco Crédito e Inversiones</td><td>Fixed term</td><td>US\(</td><td>2.53%</td><td>12-28-2018</td><td>01-08-2019</td><td>1,000</td><td>-</td><td>1,000</td></tr><tr><td>Banco Crédito e Inversiones</td><td>Fixed term</td><td>US\)</td><td>3.08%</td><td>12-28-2018</td><td>01-28-2019</td><td>2,500</td><td>1</td><td>2,501</td></tr><tr><td>Banco Santander- Santiago (*)</td><td>Fixed term</td><td>Ch\(</td><td>0.20%</td><td>12-18-2018</td><td>01-04-2019</td><td>432</td><td>-</td><td>432</td></tr><tr><td>BBVA Banco Francés</td><td>Fixed term</td><td>US\)</td><td>-</td><td>12-31-2018</td><td>01-21-2019</td><td>81</td><td>3</td><td>84</td></tr><tr><td>Nedbank</td><td>On demand</td><td>US\(</td><td>-</td><td>12-31-2018</td><td>01-01-2019</td><td>647</td><td>-</td><td>647</td></tr><tr><td>Total</td><td></td><td></td><td></td><td></td><td></td><td>187,234</td><td>432</td><td>187,666</td></tr></table>

(*) Corresponds to a monthly rate.



## 11.6 Net Debt reconciliation

This section sets out an analysis of net debt and the movements in net debt for each of the periods presented.

<table><tr><td rowspan="2">Net debt</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Cash and cash equivalents</td><td>588,530</td><td>556,066</td></tr><tr><td>Other current financial assets</td><td>505,490</td><td>312,721</td></tr><tr><td>Other non-current financial hedge assets</td><td>3,918</td><td>13,425</td></tr><tr><td>Other current financial liabilities</td><td>(298,822)</td><td>(23,585)</td></tr><tr><td>Other non-current financial liabilities</td><td>(1,518,926)</td><td>(1,330,382)</td></tr><tr><td>Total</td><td>(719,810)</td><td>(471,755)</td></tr></table>

<table><tr><td rowspan="2">Cash and cash equivalents</td><td rowspan="2">As of December 31, 2018</td><td rowspan="2">Adjustment to initial balances by adoption of IFRS 16</td><td colspan="3">Monetary</td><td colspan="3">Non-monetary</td><td rowspan="2">As of December 31, 2019</td></tr><tr><td>Amounts from loans</td><td>Amounts from interest</td><td>Other cash/instruments</td><td>Hedging and non-hedging instruments</td><td>Exchange rate differences</td><td>Other</td></tr><tr><td>Obligations with the public and bank loans</td><td>(1,333,793)</td><td>-</td><td>(442,465)</td><td>65,754</td><td>6,816</td><td>-</td><td>20,839</td><td>(70,179)</td><td>(1,753,028)</td></tr><tr><td>Current and non-current lease liabilities</td><td>-</td><td>(45,115)</td><td>7,221</td><td>1,537</td><td>-</td><td>-</td><td>-</td><td>(1,540)</td><td>(37,897)</td></tr><tr><td>Financial instruments derived from hedging</td><td>(17,318)</td><td>-</td><td>(439)</td><td>5,209</td><td>-</td><td>(12,014)</td><td>-</td><td>907</td><td>(23,655)</td></tr><tr><td>Financial instruments derived from non-hedging</td><td>(2,856)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(313)</td><td>-</td><td>-</td><td>(3,169)</td></tr><tr><td>Subtotal</td><td>(1,353,967)</td><td>(45,115)</td><td>(435,683)</td><td>72,500</td><td>6,816</td><td>(12,327)</td><td>20,839</td><td>(70,812)</td><td>(1,817,749)</td></tr><tr><td>Cash and cash equivalents</td><td>556,066</td><td>-</td><td>-</td><td>-</td><td>47,396</td><td>-</td><td>(14,932)</td><td>-</td><td>588,530</td></tr><tr><td>Deposits that do not qualify as cash and cash equivalents</td><td>291,790</td><td>-</td><td>-</td><td>(25,809)</td><td>224,499</td><td>-</td><td>(31,080)</td><td>26,289</td><td>485,689</td></tr><tr><td>Derivatives from hedge assets</td><td>31,663</td><td>-</td><td>-</td><td>-</td><td>(34,434)</td><td>23,034</td><td>-</td><td>925</td><td>21,188</td></tr><tr><td>Derivatives from other financial non-hedge assets</td><td>2,693</td><td>-</td><td>-</td><td>-</td><td>(1,403)</td><td>1,242</td><td>-</td><td>-</td><td>2,532</td></tr><tr><td>Total</td><td>(471,755)</td><td>(45,115)</td><td>(435,683)</td><td>46,691</td><td>242,874</td><td>11,949</td><td>(25,173)</td><td>(43,598)</td><td>(719,810)</td></tr></table>

The definition of debt is described in Note 14.



## Note 12 Inventories

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

<table><tr><td rowspan="2">Type of inventory</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Raw material</td><td>7,287</td><td>6,764</td></tr><tr><td>Supplies for production</td><td>26,064</td><td>26,84</td></tr><tr><td>Products-in-progress</td><td>457,563</td><td>423,621</td></tr><tr><td>Finished product</td><td>492,424</td><td>456,449</td></tr><tr><td>Total</td><td>983,338</td><td>913,674</td></tr></table>

As of December 31, 2019 and 2018, the Company held caliche stockpiles, solutions in solar ponds and intermediary salts amounting ThUS$ 393,600 and ThUS$ 347,100, respectively (including products in progress).

As of December 31, 2019 and 2018, inventory allowances recognized, amounted to ThUS$ 88,174 and ThUS$ 105,282, respectively. For finished and in-process products, recognized allowances include the provision associated with the lower value of stock (considers lower realizable value, uncertain future use, reprocessing costs of off-specification products, etc.), provision for inventory differences and the provision for potential errors in the determination of inventories (e.g., errors in topography, grade, porosity, etc.), (see Note 3.13).

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

The breakdown of inventory allowances is detailed as follows:

<table><tr><td rowspan="2">Type of inventory</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Raw material and supplies for production</td><td>2,488</td><td>1,838</td></tr><tr><td>Products-in-progress</td><td>71,468</td><td>82,673</td></tr><tr><td>Finished product</td><td>14,218</td><td>20,771</td></tr><tr><td>Total</td><td>88,174</td><td>105,282</td></tr></table>

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



As of December 31, 2019 and December 31, 2018, movements in provisions are detailed as follows:

<table><tr><td rowspan="2">Conciliation</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUSS</td><td>ThUSS</td></tr><tr><td>Beginning balance</td><td>105,282</td><td>96,284</td></tr><tr><td>Increase (decrease) in lower value provision (1)</td><td>(6,987)</td><td>7,845</td></tr><tr><td>Increase (decrease) in provision relating to differences of inventory (2)</td><td>(123)</td><td>3,176</td></tr><tr><td>Increase / decrease in provision relating to eventual differences and others (3)</td><td>(6,262)</td><td>2,436</td></tr><tr><td>Provision used</td><td>(3,736)</td><td>(4,459)</td></tr><tr><td>Total changes</td><td>(17,108)</td><td>8,998</td></tr><tr><td>Final balance</td><td>88,174</td><td>105,282</td></tr></table>

(1) There are three types of Lower Value Provisions: (a) Economic Realizable Lower Value, (b) Potential Inventory with Uncertain Future Use and (c) Reprocessing Costs of Off-Specification Products.

(2) Provisions for Inventory Differences generated when physical differences are detected when taking inventory, which exceed the tolerance levels for this process. At least two annual inventories are taken in the production sites and in the port in Chile (“zero sum” systems have immediate potential adjustments).

(3) This algorithm corresponds to the provision of diverse percentages based on the complexity in the measurement and rotation of stock, as well as standard differences based on previous results, as is the case with provisions relating to Commercial Offices.



## Note 13 Related party disclosures

## 13.1 Related party disclosures

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

## 13.2 Relationships between the parent and the entity

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



## 13.3 Detailed identification of related parties and subsidiaries

As of December 31, 2019 and 2018, the detail of entities that are identified as subsidiaries or related parties of the Company is as follows:

<table><tr><td>Tax ID No.</td><td>Name</td><td>Country of origin</td><td>Functional currency</td><td>Nature</td></tr><tr><td>Foreign</td><td>Nitratos Naturais Do Chile Ltda.</td><td>Brazil</td><td>US\(</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>Nitrate Corporation Of Chile Ltd.</td><td>United Kingdom</td><td>US\)</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQM North America Corp.</td><td>United States of America</td><td>US\(</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQM Europe N.V.</td><td>Belgium</td><td>US\)</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>Soquimich S.R.L. Argentina</td><td>Argentina</td><td>US\(</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>Soquimich European Holding B.V.</td><td>Holland</td><td>US\)</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQM Corporation N.V.</td><td>Curacao</td><td>US\(</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQI Corporation N.V.</td><td>Curacao</td><td>US\)</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQM Comercial De México S.A. de C.V.</td><td>México</td><td>US\(</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>North American Trading Company</td><td>United States of America</td><td>US\)</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>Administración y Servicios Santiago S.A. de C.V.</td><td>México</td><td>US\(</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQM Perú S.A.</td><td>Perú</td><td>US\)</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQM Ecuador S.A.</td><td>Ecuador</td><td>US\(</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQM Nitratos México S.A. de C.V.</td><td>México</td><td>US\)</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQMCH Holding Corporation L.L.P.</td><td>United States of America</td><td>US\(</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQM Investment Corporation N.V.</td><td>Curacao</td><td>US\)</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQM Brasil Limitada</td><td>Brazil</td><td>US\(</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQM France S.A.</td><td>France</td><td>US\)</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQM Japan Co. Ltd.</td><td>Japan</td><td>US\(</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>Royal Seed Trading Corporation A.V.V.</td><td>Aruba</td><td>US\)</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQM Oceania Pty Limited</td><td>Australia</td><td>US\(</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>Rs Agro-Chemical Trading Corporation A.V.V.</td><td>Aruba</td><td>US\)</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQM Indonesia S.A.</td><td>Indonesia</td><td>US\(</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQM Virginia L.L.C.</td><td>United States of America</td><td>US\)</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQM Italia SRL</td><td>Italy</td><td>US\(</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>Comercial Caimán Internacional S.A.</td><td>Panama</td><td>US\)</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQM África Pty. Ltd.</td><td>South Africa</td><td>US\(</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQM Colombia SAS</td><td>Colombia</td><td>US\)</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQM Internacional N.V.</td><td>Belgium</td><td>US\(</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQM (Shanghai) Chemicals Co. Ltd.</td><td>China</td><td>US\)</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQM Lithium Specialties LLC</td><td>United States of America</td><td>US\(</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQM Iberian S.A.</td><td>Spain</td><td>US\)</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQM Beijing Commercial Co. Ltd.</td><td>China</td><td>US\(</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQM Thailand Limited</td><td>Thailand</td><td>US\)</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SQM Australia PTY</td><td>Australia</td><td>US\(</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>SACAL S.A. (1)</td><td>Argentina</td><td>Ars</td><td>Subsidiary</td></tr><tr><td>96.801.610-5</td><td>Comercial Hydro S.A.</td><td>Chile</td><td>US\(</td><td>Subsidiary</td></tr><tr><td>96.651.060-9</td><td>SQM Potasio S.A.</td><td>Chile</td><td>US\)</td><td>Subsidiary</td></tr><tr><td>96.592.190-7</td><td>SQM Nitratos S.A.</td><td>Chile</td><td>US\(</td><td>Subsidiary</td></tr><tr><td>96.592.180-K</td><td>Ajay SQM Chile S.A.</td><td>Chile</td><td>US\)</td><td>Subsidiary</td></tr><tr><td>86.630.200-6</td><td>SQMCM Internacional Ltda. (2)</td><td>Chile</td><td>US\(</td><td>Subsidiary</td></tr><tr><td>79.947.100-0</td><td>SQM Industrial S.A.</td><td>Chile</td><td>US\)</td><td>Subsidiary</td></tr><tr><td>79.906.120-1</td><td>Isapre Norte Grande Ltda.</td><td>Chile</td><td>Ch\)</td><td>Subsidiary</td></tr><tr><td>79.876.080-7</td><td>Almacenes y Depósitos Ltda.</td><td>Chile</td><td>Ch\(</td><td>Subsidiary</td></tr><tr><td>79.770.780-5</td><td>Servicios Integrales de Tránsitos y Transferencias S.A.</td><td>Chile</td><td>US\)</td><td>Subsidiary</td></tr><tr><td>79.768.170-9</td><td>Soquimich Comercial S.A.</td><td>Chile</td><td>US\(</td><td>Subsidiary</td></tr><tr><td>79.626.800-K</td><td>SQM Salar S.A.</td><td>Chile</td><td>US\)</td><td>Subsidiary</td></tr><tr><td>78.053.910-0</td><td>Proinsa Ltda. (3)</td><td>Chile</td><td>Ch\(</td><td>Subsidiary</td></tr></table>



<table><tr><td>Tax ID No.</td><td>Name</td><td>Country of origin</td><td>Functional currency</td><td>Nature</td></tr><tr><td>76.534.490-5</td><td>Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A.</td><td>Chile</td><td>Ch$</td><td>Subsidiary</td></tr><tr><td>76.425.380-9</td><td>Exploraciones Mineras S.A.</td><td>Chile</td><td>US$</td><td>Subsidiary</td></tr><tr><td>76.064.419-6</td><td>Comercial Agrorama Ltda.</td><td>Chile</td><td>Peso</td><td>Subsidiary</td></tr><tr><td>76.145.229-0</td><td>Agrorama S.A.</td><td>Chile</td><td>Peso</td><td>Subsidiary</td></tr><tr><td>76.359.919-1</td><td>Oromca Estudios SPA</td><td>Chile</td><td>US$</td><td>Subsidiary</td></tr><tr><td>76.360.575-2</td><td>Oromca SPA</td><td>Chile</td><td>US$</td><td>Subsidiary</td></tr><tr><td>76.686.311-9</td><td>SQM MaG SpA</td><td>Chile</td><td>US$</td><td>Subsidiary</td></tr><tr><td>Foreign</td><td>Abu Dhabi Fertilizer Industries WWL</td><td>Arab Emirates united</td><td>Arab Emirates dirham</td><td>Associate</td></tr><tr><td>Foreign</td><td>Doktor Tarsa Tarim Sanayi AS</td><td>Turkey</td><td>US$</td><td>Associate</td></tr><tr><td>Foreign</td><td>Ajay North America</td><td>United States of America</td><td>US$</td><td>Associate</td></tr><tr><td>Foreign</td><td>Ajay Europe SARL</td><td>France</td><td>Euro</td><td>Associate</td></tr><tr><td>Foreign</td><td>SQM Eastmed Turkey</td><td>Turkey</td><td>Euro</td><td>Associate</td></tr><tr><td>Foreign</td><td>Kore Potash PLC</td><td>United Kingdom</td><td>US$</td><td>Associate</td></tr><tr><td>Foreign</td><td>Sichuan SQM Migma Chemical Fertilizers Co Ltd.</td><td>China</td><td>US$</td><td>Joint venture</td></tr><tr><td>Foreign</td><td>Coromandel SQM India</td><td>India</td><td>Indian rupee</td><td>Joint venture</td></tr><tr><td>Foreign</td><td>SQM Vitas Fzco.</td><td>Arab Emirates united</td><td>Arab Emirates dirham</td><td>Joint venture</td></tr><tr><td>Foreign</td><td>SQM Star Qingdao Corp Nutrition Co., Ltd.</td><td>China</td><td>US$</td><td>Joint venture</td></tr><tr><td>Foreign</td><td>SQM Vitas Holland B.V.</td><td>Holland</td><td>Euro</td><td>Joint venture</td></tr><tr><td>Foreign</td><td>Covalent Lithium Pty Ltd.</td><td>Australia</td><td>Australian dollar</td><td>Joint venture</td></tr><tr><td>Foreign</td><td>Pavoni &amp; C. SPA</td><td>Italy</td><td>Euro</td><td>Joint venture</td></tr><tr><td>96.511.530-7</td><td>Sociedad de Inversiones Pampa Calichera</td><td>Chile</td><td>US$</td><td>Other related parties</td></tr><tr><td>96.529.340-K</td><td>Norte Grande S.A.</td><td>Chile</td><td>Peso</td><td>Other related parties</td></tr><tr><td>79.049.778-9</td><td>Callegari Agricola S.A.</td><td>Chile</td><td>Peso</td><td>Other related parties</td></tr><tr><td>Foreign</td><td>SQM Vitas Brasil Agroindustria (4)</td><td>Brazil</td><td>Brazilian real</td><td>Other related parties</td></tr><tr><td>Foreign</td><td>SQM Vitas Perú S.A.C. (4)</td><td>Peru</td><td>US$</td><td>Other related parties</td></tr><tr><td>Foreign</td><td>Terra Tarsa B.V. (5)</td><td>Holland</td><td>Euro</td><td>Other related parties</td></tr><tr><td>Foreign</td><td>Plantacote N.V. (5)</td><td>Belgium</td><td>Euro</td><td>Other related parties</td></tr><tr><td>Foreign</td><td>Doktolab Tarim Arastima San. Tic As (5)</td><td>Turkey</td><td>Turkish Lira</td><td>Other related parties</td></tr><tr><td>Foreign</td><td>Doctochem Tarim Sanayai Ticaret LTD (5)</td><td>Turkey</td><td>Turkish Lira</td><td>Other related parties</td></tr><tr><td>Foreign</td><td>Terra Tarsa Ukraine LLC (5)</td><td>Ukraine</td><td>Ukrainian grivna</td><td>Other related parties</td></tr><tr><td>Foreign</td><td>Terra Tarsa Don LLC (5)</td><td>Russian Federation</td><td>Russian ruble</td><td>Other related parties</td></tr><tr><td>Foreign</td><td>Abu Dhabi Fertilizer Industries WWL (6)</td><td>Oman</td><td>Arab Emirates dirham</td><td>Other related parties</td></tr><tr><td>Foreign</td><td>International Technical and Trading Agencies CO WLL (6)</td><td>Jordan</td><td>Arab Emirates dirham</td><td>Other related parties</td></tr><tr><td>Foreign</td><td>Arpa Speciali S.R.L (7)</td><td>Italy</td><td>Euro</td><td>Other related parties</td></tr></table>

(1) On 06/26/2019 the company SACAL S.A. ceased trading.

(2) On March 1, 2019, Soquimich Commercial S.A. has obtained ownership of 100% of corporate rights in SQMC International Ltd.

(3) On 04/01/2019 the company Pronisa Ltda ceased trading.

(4) These Companies are subsidiaries of the joint venture SQM Vitas Fzco.

(5) These Companies are subsidiaries of the associate Doktor Tarsa Tarim Sanayi AS.

(6) These Companies are subsidiaries of the joint venture Abu Dhabi Fertilizer Industries WWL.

(7) These Companies are subsidiaries of the joint venture Pavoni & C. SPA.



The following other related parties correspond to mining contractual corporations.

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



## 13.4 Detail of related parties and related party transactions

Transactions between the Parent and its subsidiaries, associated businesses, joint ventures and other related parties are part of the Company's common transactions. Their conditions are those customary for this type of transactions in respect of terms and market prices. In addition, these have been eliminated in consolidation and are not detailed in this note. Maturity terms for each case vary by virtue of the transaction giving rise to them.

As of December 31, 2019 and 31, 2018, the detail of significant transactions with related parties is as follows

<table><tr><td rowspan="2">Tax ID No.</td><td rowspan="2">Company</td><td rowspan="2">Nature</td><td rowspan="2">Country of origin</td><td rowspan="2">Transaction</td><td>For the year ended December 31, 2019</td><td>For the year ended December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Foreign</td><td>Doktor Tarsa Tarim Sanayi AS</td><td>Associate</td><td>Turkey</td><td>Sale of products</td><td>14,767</td><td>16,726</td></tr><tr><td>Foreign</td><td>Ajay Europe S.A.R.L.</td><td>Associate</td><td>France</td><td>Sale of products</td><td>21,348</td><td>19,470</td></tr><tr><td>Foreign</td><td>Ajay Europe S.A.R.L.</td><td>Associate</td><td>France</td><td>Dividends</td><td>1,055</td><td>811</td></tr><tr><td>Foreign</td><td>Ajay North America L.L.C.</td><td>Associate</td><td>United States of America</td><td>Sale of products</td><td>16,932</td><td>16,810</td></tr><tr><td>Foreign</td><td>Ajay North America L.L.C.</td><td>Associate</td><td>United States of America</td><td>Dividends</td><td>2,796</td><td>2,807</td></tr><tr><td>Foreign</td><td>Abu Dhabi Fertilizer Industries WWL</td><td>Associate</td><td>Arab Emirates</td><td>Sale of products</td><td>3,749</td><td>5,811</td></tr><tr><td>Foreign</td><td>Abu Dhabi Fertilizer Industries WWL</td><td>Associate</td><td>Arab Emirates</td><td>Dividends</td><td>-</td><td>6,632</td></tr><tr><td>Foreign</td><td>Charlee SQM Thailand Co Ltd. (1)</td><td>Associate</td><td>Thailand</td><td>Sale of products</td><td>-</td><td>4,960</td></tr><tr><td>Foreign</td><td>Charlee SQM Thailand Co Ltd. (1)</td><td>Associate</td><td>Thailand</td><td>Dividends</td><td>-</td><td>362</td></tr><tr><td>Foreign</td><td>SQM Vitas Brasil Agroindustria</td><td>Other related parties</td><td>Brazil</td><td>Sale of products</td><td>46,876</td><td>44,827</td></tr><tr><td>Foreign</td><td>SQM Vitas Perú S.A.C.</td><td>Other related parties</td><td>Peru</td><td>Sale of products</td><td>24,138</td><td>17,204</td></tr><tr><td>Foreign</td><td>SQM Vitas Fzco</td><td>Joint venture</td><td>Arab Emirates</td><td>Dividends</td><td>10,598</td><td>-</td></tr><tr><td>Foreign</td><td>Coromandel SQM India</td><td>Joint venture</td><td>India</td><td>Sale of products</td><td>3,955</td><td>7,696</td></tr><tr><td>Foreign</td><td>SQM Star Qingdao Corp Nutrition Co. Ltd.</td><td>Joint venture</td><td>China</td><td>Sale of products</td><td>1,929</td><td>-</td></tr><tr><td>Foreign</td><td>Terra Tarsa Ukraine LLC</td><td>Other related parties</td><td>Ukraine</td><td>Sale of products</td><td>1,280</td><td>1,674</td></tr><tr><td>Foreign</td><td>Terra Tarsa Don LLC</td><td>Other related parties</td><td>Russian Federation</td><td>Sale of products</td><td>40</td><td>187</td></tr><tr><td>Foreign</td><td>Plantacote NV</td><td>Other related parties</td><td>Belgium</td><td>Sale of products</td><td>4,096</td><td>4,554</td></tr><tr><td>Foreign</td><td>Pavoni &amp; C. SpA</td><td>Joint venture</td><td>Italy</td><td>Sale of products</td><td>3,152</td><td>201</td></tr><tr><td>Foreign</td><td>SQM Eastmed Turkey</td><td>Associate</td><td>Turkey</td><td>Sale of products</td><td>47</td><td>30</td></tr><tr><td>Foreign</td><td>Arpa Speciali S.R.L.</td><td>Other related parties</td><td>Italy</td><td>Sale of products</td><td>2,359</td><td>207</td></tr><tr><td colspan="6">Total</td><td>159,117</td><td>150,969</td></tr></table>

(1) During November 2018, shares held in Charlee SQM Thailand were sold.

(2) During December 2018, shares held in Minera Exar S.A. were sold.



## 13.5 Trade receivables due from related parties, current:

Transactions between the Company, its subsidiaries, joint ventures and other related parties are considered customary transactions. These transactions are carried out under arm’s length conditions, or those that are normally in effect for this type of transaction in terms of time frames and market prices

<table><tr><td rowspan="2">Tax ID No</td><td rowspan="2">Company</td><td rowspan="2">Nature</td><td rowspan="2">Country of origin</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Foreign</td><td>Doktor Tarsa Tarim Sanayi AS</td><td>Associate</td><td>Turkey</td><td>110</td><td>6,497</td></tr><tr><td>Foreign</td><td>Ajay Europe S.A.R.L.</td><td>Associate</td><td>France</td><td>3,712</td><td>3,756</td></tr><tr><td>Foreign</td><td>Ajay North America LL.C.</td><td>Associate</td><td>United States of America</td><td>2,290</td><td>2,080</td></tr><tr><td>Foreign</td><td>Abu Dhabi Fertilizer Industries WWL</td><td>Associate</td><td>United Arab Emirates</td><td>803</td><td>857</td></tr><tr><td>96.511.530-7</td><td>Soc. de Inversiones Pampa Calichera</td><td>Other related parties</td><td>Chile</td><td>6</td><td>6</td></tr><tr><td>Foreign</td><td>SQM Vitas Brasil Agroindustria</td><td>Other related parties</td><td>Brazil</td><td>27,275</td><td>15,818</td></tr><tr><td>Foreign</td><td>SQM Vitas Peru&#x27;s S.A.C.</td><td>Other related parties</td><td>Peru</td><td>23,475</td><td>12,767</td></tr><tr><td>Foreign</td><td>Coromandel SQM India</td><td>Joint venture</td><td>India</td><td>1,792</td><td>2,025</td></tr><tr><td>Foreign</td><td>SQM Vitas Fzco</td><td>Joint venture</td><td>United Arab Emirates</td><td>234</td><td>105</td></tr><tr><td>Foreign</td><td>SQM Star Qingdao Corp Nutrition Co. Ltd.</td><td>Joint venture</td><td>China</td><td>-</td><td>248</td></tr><tr><td>Foreign</td><td>Terra Tarsa Ukraine LLC</td><td>Other related parties</td><td>Ukraine</td><td>7</td><td>-</td></tr><tr><td>Foreign</td><td>Terra Tarsa Don LLC</td><td>Other related parties</td><td>Federation of Russia</td><td>13</td><td>41</td></tr><tr><td>Foreign</td><td>Plantacote NV</td><td>Other related parties</td><td>Belgium</td><td>657</td><td>312</td></tr><tr><td>Foreign</td><td>SQM Eastmed Turkey</td><td>Associate</td><td>Turkey</td><td>47</td><td>30</td></tr><tr><td>Foreign</td><td>Pavoni &amp; C. SpA</td><td>Joint venture</td><td>Italy</td><td>1,028</td><td>12</td></tr><tr><td>Foreign</td><td>Arpa Speciali S.R.L.</td><td>Other related parties</td><td>Italy</td><td>134</td><td>-</td></tr><tr><td></td><td>Allowance</td><td></td><td></td><td>(356)</td><td>(1,764)</td></tr><tr><td>Total</td><td></td><td></td><td></td><td>61,227</td><td>42,790</td></tr></table>

The receivables for Sichuan SQM Miga Chemical Fertilizers Co Ltd. are presented net of provisions (provisions as of December 31, 2019 ThUS$ 10,965 and December 31, 2018 ThUS$ 10,965).

## 13.6 Trade payables due to related parties, current:

<table><tr><td rowspan="2">Tax ID No</td><td rowspan="2">Company</td><td rowspan="2">Nature</td><td rowspan="2">Country of origin</td><td rowspan="2">Currency</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Foreign</td><td>SQM Star Qingdao Corp Nutrition Co., Ltd.</td><td>Joint venture</td><td>China</td><td>USD</td><td>243</td><td>-</td></tr><tr><td>Foreign</td><td>Covalent Lithium Pty Ltd</td><td>Joint venture</td><td>Australia</td><td>Australian dollar</td><td>232</td><td>9</td></tr><tr><td>Total</td><td></td><td></td><td></td><td></td><td>475</td><td>9</td></tr></table>



## Note 14 Financial instruments

Financial instruments in accordance with IFRS 9 are detailed as follows, except for liabilities under IFRS 16 in number 14.4 f):

## 14.1 Types of other financial assets

<table><tr><td rowspan="2">Description of other financial assets</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Financial assets at amortized cost (1))</td><td>485,689</td><td>291,790</td></tr><tr><td>Derivative financial instruments</td><td></td><td></td></tr><tr><td>- For hedging</td><td>17,270</td><td>18,238</td></tr><tr><td>- Non-hedging (2)</td><td>2,531</td><td>2,693</td></tr><tr><td>Total other current financial assets</td><td>505,490</td><td>312,721</td></tr><tr><td>Financial assets at fair value through other comprehensive income</td><td>4,785</td><td>3,631</td></tr><tr><td>Derivative financial instruments</td><td></td><td></td></tr><tr><td>- For hedging</td><td>3,918</td><td>13,425</td></tr><tr><td>Financial assets at amortized cost</td><td>75</td><td>75</td></tr><tr><td>Total other non-current financial assets</td><td>8,778</td><td>17,131</td></tr></table>

<table><tr><td rowspan="2">Institution</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Banco de Crédito e Inversiones</td><td>185,400</td><td>145,834</td></tr><tr><td>Banco Santander (3)</td><td>74,365</td><td>23,124</td></tr><tr><td>Banco Itaú CorpBanca</td><td>120,628</td><td>70,719</td></tr><tr><td>Banco Security</td><td>17,964</td><td>27,215</td></tr><tr><td>Banco de Chile</td><td>18,026</td><td>-</td></tr><tr><td>Banco Estado</td><td>15,126</td><td>-</td></tr><tr><td>Scotiabank Sud Americano</td><td>54,180</td><td>24,898</td></tr><tr><td>Total</td><td>485,689</td><td>291,790</td></tr></table>

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

(2) Correspond to forwards and options that were not classified as hedging instruments (See detail in Note 14.3).

(3) This balance includes ThUS$ 1,870 corresponding to margin calls, which are considered as collateral guarantees.



## 14.2 Trade and other receivables

<table><tr><td rowspan="3">Trade and other receivables</td><td colspan="4">As of December 31, 2019</td><td colspan="4">As of December 31, 2018</td></tr><tr><td>Currents</td><td>Non-current</td><td>Total</td><td>Currents</td><td>Non-current</td><td>Total</td><td></td><td></td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td></td><td></td></tr><tr><td>Trade receivables, current</td><td>367,583</td><td>-</td><td>367,583</td><td>430,914</td><td>-</td><td>430,914</td><td></td><td></td></tr><tr><td>Prepayments, current</td><td>20,309</td><td>-</td><td>20,309</td><td>16,147</td><td>-</td><td>16,147</td><td></td><td></td></tr><tr><td>Other receivables, current</td><td>11,250</td><td>1,710</td><td>12,960</td><td>19,558</td><td>2,275</td><td>21,833</td><td></td><td></td></tr><tr><td>Total trade and other receivables</td><td>399,142</td><td>1,710</td><td>400,852</td><td>466,619</td><td>2,275</td><td>468,894</td><td></td><td></td></tr></table>

<table><tr><td rowspan="3">Trade and other receivables</td><td colspan="4">As of December 31, 2019</td><td colspan="4">As of December 31, 2018</td></tr><tr><td>Assets before allowances</td><td>Allowance for doubtful trade receivables</td><td>Assets for trade receivables, net</td><td>Assets before allowances</td><td>Allowance for doubtful trade receivables</td><td>Assets for trade receivables, net</td><td></td><td></td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td></td><td></td></tr><tr><td>Receivables related to credit operations, current</td><td>383,775</td><td>(16,192)</td><td>367,583</td><td>445,670</td><td>(14,756)</td><td>430,914</td><td></td><td></td></tr><tr><td>Trade receivables, current</td><td>383,775</td><td>(16,192)</td><td>367,583</td><td>445,670</td><td>(14,756)</td><td>430,914</td><td></td><td></td></tr><tr><td>Prepayments, current</td><td>21,092</td><td>(783)</td><td>20,309</td><td>16,990</td><td>(843)</td><td>16,147</td><td></td><td></td></tr><tr><td>Other receivables, current</td><td>15,659</td><td>(4,409)</td><td>11,250</td><td>23,863</td><td>(4,305)</td><td>19,558</td><td></td><td></td></tr><tr><td>Current other receivables</td><td>36,751</td><td>(5,192)</td><td>31,559</td><td>40,853</td><td>(5,148)</td><td>35,705</td><td></td><td></td></tr><tr><td>Other receivables, non-current</td><td>1,710</td><td>-</td><td>1,710</td><td>2,275</td><td>-</td><td>2,275</td><td></td><td></td></tr><tr><td>Non-current receivables</td><td>1,710</td><td>-</td><td>1,710</td><td>2,275</td><td>-</td><td>2,275</td><td></td><td></td></tr><tr><td>Total trade and other receivables</td><td>422,236</td><td>(21,384)</td><td>400,852</td><td>488,798</td><td>(19,904)</td><td>468,894</td><td></td><td></td></tr></table>



## (a) Portfolio stratification

The Company’s policy is to require guarantees (such as letters of credit, guarantee clauses and others) and/or maintaining insurance policies for certain account receivables as deemed necessary by management.

## (b) Uncollateralized portfolio

As of December 31, 2019 and December 31, 2018 the detail of the uncollateralized portfolio is as follows:

<table><tr><td colspan="5">As of December 31, 2019</td></tr><tr><td colspan="5">Total uncollateralized portfolio</td></tr><tr><td>Past due segments</td><td>Number of customers with non-renegotiated portfolio</td><td>Gross non-renegotiated portfolio THUS\(</td><td>Number of customers with renegotiated portfolio</td><td>Gross renegotiated portfolio THUS\)</td></tr><tr><td>Current</td><td>1,486</td><td>351,931</td><td>69</td><td>892</td></tr><tr><td>1 - 30 days</td><td>166</td><td>20,195</td><td>72</td><td>526</td></tr><tr><td>31 - 60 days</td><td>26</td><td>1,279</td><td>4</td><td>10</td></tr><tr><td>61 - 90 days</td><td>12</td><td>519</td><td>3</td><td>54</td></tr><tr><td>91 - 120 days</td><td>5</td><td>1,026</td><td>2</td><td>66</td></tr><tr><td>121 - 150 days</td><td>5</td><td>361</td><td>7</td><td>49</td></tr><tr><td>151 - 180 days</td><td>7</td><td>190</td><td>2</td><td>33</td></tr><tr><td>181 - 210 days</td><td>4</td><td>51</td><td>-</td><td>-</td></tr><tr><td>211 - 250 days</td><td>6</td><td>48</td><td>8</td><td>11</td></tr><tr><td>&gt;250 days</td><td>144</td><td>5,449</td><td>137</td><td>1,085</td></tr><tr><td>Total</td><td>1,861</td><td>381,049</td><td>304</td><td>2,726</td></tr></table>

<table><tr><td colspan="5">As of December 31, 2018</td></tr><tr><td colspan="5">Total uncollateralized portfolio</td></tr><tr><td>Past due segments</td><td>Number of customers with non-renegotiated portfolio</td><td>Gross non-renegotiated portfolio THUS\(</td><td>Number of customers with renegotiated portfolio</td><td>Gross renegotiated portfolio THUS\)</td></tr><tr><td>Current</td><td>1,390</td><td>404,670</td><td>136</td><td>668</td></tr><tr><td>1 - 30 days</td><td>1,229</td><td>19,422</td><td>390</td><td>596</td></tr><tr><td>31 - 60 days</td><td>801</td><td>5,705</td><td>154</td><td>118</td></tr><tr><td>61 - 90 days</td><td>648</td><td>2,279</td><td>41</td><td>75</td></tr><tr><td>91 - 120 days</td><td>489</td><td>1,220</td><td>27</td><td>47</td></tr><tr><td>121 - 150 days</td><td>80</td><td>423</td><td>16</td><td>29</td></tr><tr><td>151 - 180 days</td><td>43</td><td>186</td><td>21</td><td>176</td></tr><tr><td>181 - 210 days</td><td>7</td><td>1,291</td><td>41</td><td>231</td></tr><tr><td>211 - 250 days</td><td>7</td><td>108</td><td>101</td><td>242</td></tr><tr><td>&gt;250 days</td><td>140</td><td>7,036</td><td>305</td><td>1,148</td></tr><tr><td>Total</td><td>4,834</td><td>442,340</td><td>1,232</td><td>3,330</td></tr></table>



<table><tr><td colspan="8">As of December 31, 2019</td></tr><tr><td rowspan="2">Trade and other receivables</td><td colspan="5">Trade accounts receivable days past due</td><td rowspan="2">Trade receivables due from related parties</td><td rowspan="2"></td></tr><tr><td>Current</td><td>1 to 30 days</td><td>31 to 60 days</td><td>61 to 90 days</td><td>Over 90 days</td></tr><tr><td>Expected loss rate</td><td>1%</td><td>18%</td><td>34%</td><td>44%</td><td>78%</td><td>-</td><td>-</td></tr><tr><td>Total gross carrying amount</td><td>352,823</td><td>20,721</td><td>1,288</td><td>573</td><td>8,370</td><td>383,775</td><td>72,859</td></tr><tr><td>Impairment estimate</td><td>5,285</td><td>3,664</td><td>440</td><td>251</td><td>6,552</td><td>16,192</td><td>11,323</td></tr></table>

<table><tr><td colspan="8">As of December 31, 2018</td></tr><tr><td rowspan="2">Trade and due from related parties receivables</td><td colspan="5">Trade accounts receivable days past due</td><td rowspan="2">Trade receivables due from related parties</td><td rowspan="2"></td></tr><tr><td>Current</td><td>1 to 30 days</td><td>31 to 60 days</td><td>61 to 90 days</td><td>Over 90 days</td></tr><tr><td>Expected loss rate</td><td>1%</td><td>9%</td><td>5%</td><td>4%</td><td>65%</td><td>-</td><td>-</td></tr><tr><td>Total gross carrying amount</td><td>408,300</td><td>20,018</td><td>2,861</td><td>2,354</td><td>12,137</td><td>445,670</td><td>55,520</td></tr><tr><td>Allowance for doubtful accounts</td><td>4,811</td><td>1,858</td><td>146</td><td>89</td><td>7,852</td><td>14,756</td><td>12,730</td></tr></table>

As of December 31, 2019 and 2018, movements in provisions are as follows:

<table><tr><td rowspan="2">Provisions</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Allowance for doubtful accounts at the beginning of the Period</td><td>32,634</td><td>34,936</td></tr><tr><td>Adjustment to initial balance derived from the adoption of IFRS 9</td><td>-</td><td>2,301</td></tr><tr><td>Increase / (decrease) of impairment provision</td><td>1,057</td><td>(2,967)</td></tr><tr><td>Provision used</td><td>(984)</td><td>(1,636)</td></tr><tr><td>Allowance for doubtful accounts at the end of the year</td><td>32,707</td><td>32,634</td></tr><tr><td>(1) Trade and Other Receivables allowance current</td><td>16,192</td><td>14,756</td></tr><tr><td>(2) Other receivables allowance current</td><td>5,192</td><td>5,148</td></tr><tr><td>(3) Related party receivables allowance current</td><td>11,323</td><td>12,730</td></tr><tr><td>Recovery of Insurance</td><td>320</td><td>827</td></tr><tr><td>Total allowance for doubtful accounts</td><td>32,707</td><td>32,634</td></tr><tr><td>Renegotiated allowance</td><td>1,905</td><td>2,056</td></tr><tr><td>Non-renegotiated allowance</td><td>30,802</td><td>30,578</td></tr></table>



## 14.3 Hedging assets and liabilities

The balance represents derivative financial instruments measured at fair value which have been classified as hedges for exchange and interest rate risks relating to the total obligations with the public associated with bonds in UF and investments in Chilean pesos. As of December 31, 2019 and 2018, the notional amount of cash flows agreed upon in US dollars of the cross-currency swap contracts amounted to ThUS$ 435,167 and ThUS$ 461,659, respectively.

<table><tr><td>ThUS$</td><td>Assets / (Liabilities) Derivative financial instruments</td><td>Total Realized</td><td>Hedging Reserve in Gross Equity</td></tr><tr><td>Hedging of underlying debt at December 31, 2019</td><td></td><td></td><td></td></tr><tr><td>Hedging Assets</td><td>3,918</td><td>(4,194)</td><td>8,112</td></tr><tr><td>Hedging Liabilities</td><td>(22,771)</td><td>(25,363)</td><td>2,592</td></tr><tr><td>Hedge of underlying Debit</td><td>(18,853)</td><td>(29,557)</td><td>10,704</td></tr><tr><td>Hedge of underlying investment at December 31, 2019</td><td></td><td></td><td></td></tr><tr><td>Hedging Assets</td><td>17,270</td><td>17,857</td><td>(587)</td></tr><tr><td>Hedging Liabilities</td><td>(889)</td><td>(711)</td><td>(178)</td></tr><tr><td>Hedge of underlying Investments</td><td>16,381</td><td>17,146</td><td>(765)</td></tr></table>

<table><tr><td>Expressed in ThUS$</td><td>Assets / (Liabilities) Derivative financial instruments</td><td>Total Realized</td><td>Hedging Reserve in Gross Equity</td></tr><tr><td>Hedge of underlying debt at December 31, 2018</td><td></td><td></td><td></td></tr><tr><td>Hedging Assets</td><td>13,425</td><td>5,244</td><td>8,181</td></tr><tr><td>Hedging Liabilities</td><td>(17,318)</td><td>(18,859)</td><td>1,541</td></tr><tr><td>Underlying Debt Coverage</td><td>(3,893)</td><td>(13,615)</td><td>9,722</td></tr><tr><td>Hedge of underlying investment at December 31, 2018</td><td></td><td></td><td></td></tr><tr><td>Hedging Assets</td><td>18,146</td><td>19,911</td><td>(1,765)</td></tr><tr><td>Hedge of Underlying Investments</td><td>18,146</td><td>19,911</td><td>(1,765)</td></tr></table>

<table><tr><td>Hedging effect in profit and loss and equity for the year ended December 31, 2019</td><td>Total variation</td><td>Profit and loss</td><td>Hedging reserve due to variation of hedge gross</td></tr><tr><td>Analysis effect by type of hedging</td><td></td><td></td><td></td></tr><tr><td>Hedge of underlying debt</td><td>(14,960)</td><td>(15,942)</td><td>982</td></tr><tr><td>Hedge of underlying investments</td><td>(1,765)</td><td>(2,765)</td><td>1,000</td></tr><tr><td>Total hedging effect on profit or loss and equity for the year</td><td>(16,725)</td><td>(18,707)</td><td>1,982</td></tr><tr><td>Analysis Effect by type of asset</td><td></td><td></td><td></td></tr><tr><td>Hedging in Current and Non-Current Assets</td><td>(10,383)</td><td>(11,492)</td><td>1,109</td></tr><tr><td>Hedging in Current and Non-Current Liabilities</td><td>(6,342)</td><td>(7,215)</td><td>873</td></tr><tr><td>Total hedging effect in Profit or Loss and Shareholders&#x27; Equity for the year</td><td>(16,725)</td><td>(18,707)</td><td>1,982</td></tr></table>



The balances in the “total realized” column consider the intermediate effects of the contracts in force from January 1 to December 31, 2019 and from January 1 to December 31, 2018.

Derivative contract maturities are detailed as follows:

<table><tr><td rowspan="2">Series</td><td>Contract amount</td><td rowspan="2">Currency</td><td rowspan="2">Maturity date</td></tr><tr><td>ThUS$</td></tr><tr><td>H</td><td>148,159</td><td>UF</td><td>01-04-2023</td></tr><tr><td>O</td><td>58,748</td><td>UF</td><td>02-01-2022</td></tr><tr><td>P</td><td>134,228</td><td>UF</td><td>01-15-2028</td></tr></table>

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

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

## Effectiveness

Effectiveness tests have verified that hedges are effective as of the reporting date. This note describes the fair values of derivative instruments classified as hedges.



## 14.4 Financial liabilities

## Other current and non-current financial liabilities

As of December 31, 2019 and 2018, the detail is as follows:

<table><tr><td rowspan="3">Other current and non-current financial liabilities</td><td colspan="3">As of December 31, 2019</td><td colspan="3">As of December 31, 2018</td></tr><tr><td>Current</td><td>Non-current</td><td>Total</td><td>Current</td><td>Non-current</td><td>Total</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Liabilities at amortized cost</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Bank borrowings</td><td>199</td><td>69,138</td><td>69,337</td><td>300</td><td>68,870</td><td>69,170</td></tr><tr><td>Obligations with the public (bonds)</td><td>280,578</td><td>1,403,108</td><td>1,683,686</td><td>15,145</td><td>1,249,479</td><td>1,264,624</td></tr><tr><td>Derivative financial instruments</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>For hedging</td><td>7,183</td><td>16,477</td><td>23,660</td><td>5,285</td><td>12,033</td><td>17,318</td></tr><tr><td>Non-Hedging liabilities</td><td>3,168</td><td>-</td><td>3,168</td><td>2,855</td><td>-</td><td>2,855</td></tr><tr><td>Liabilities for lease</td><td>7,694</td><td>30,203</td><td>37,897</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Total</td><td>298,822</td><td>1,518,926</td><td>1,817,748</td><td>23,585</td><td>1,330,382</td><td>1,353,967</td></tr></table>

## Current and non-current bank borrowings

As of December 31, 2019 and 2018, the detail is as follows:

<table><tr><td rowspan="2">Current and non-current bank borrowings</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Long-term bank borrowings</td><td>69,138</td><td>68,870</td></tr><tr><td>Current portion of long-term loans</td><td>199</td><td>300</td></tr><tr><td>Short-term borrowings and current portion of long-term borrowings</td><td>69,337</td><td>69,170</td></tr></table>



## a) Bank borrowings, current:

As of December 31, 2019 and 2018, the detail of this caption is as follows:

<table><tr><td colspan="3">Debtor</td><td colspan="3">Creditor</td><td rowspan="2">Currency or adjustment index</td><td rowspan="2">Repayment</td><td rowspan="2">maturity</td><td rowspan="2">Effective rate</td><td rowspan="2">Nominal rate</td></tr><tr><td>Tax ID No</td><td>Company</td><td>Country</td><td>Tax ID No</td><td>Financial institution</td><td>Country</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>Foreign</td><td>Scotiabank Cayman</td><td>USA</td><td>US\(</td><td>Upon maturity</td><td>05-29-2023</td><td>2.11%</td><td>3.01%</td></tr><tr><td>Foreign</td><td>Nitratos Naturais do Chile Lim.</td><td>Brazil</td><td>Foreign</td><td>Banco Itau Brasil</td><td>Brazil</td><td>BRL</td><td>Upon maturity</td><td>12-31-2019</td><td>13.57%</td><td>4.25%</td></tr></table>

<table><tr><td>Debtor</td><td colspan="2">Creditor</td><td colspan="3">Nominal amounts as of December 31, 2019</td><td colspan="5">Current amounts as of December 31, 2019</td></tr><tr><td rowspan="2">Company</td><td rowspan="2" colspan="2">Financial institution</td><td>Up to 90 days</td><td>90 days to 1 year</td><td>Total</td><td>Up to 90 days</td><td>90 days to 1 year</td><td>Subtotal</td><td>Borrowing costs</td><td>Total</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td></td><td></td></tr><tr><td>SQM S.A.</td><td colspan="2">Scotiabank Cayman</td><td>-</td><td>-</td><td>-</td><td>-</td><td>187</td><td>187</td><td>-</td><td>187</td></tr><tr><td>Nitratos Naturais do Chile</td><td colspan="2">Banco Itau Brasil</td><td>-</td><td>-</td><td>-</td><td>12</td><td>-</td><td>12</td><td>-</td><td>12</td></tr><tr><td>Total</td><td></td><td></td><td>-</td><td>-</td><td>-</td><td>12</td><td>187</td><td>199</td><td>-</td><td>199</td></tr></table>



<table><tr><td colspan="3">Debtor</td><td colspan="3">Creditor</td><td rowspan="2">Currency or adjustment index</td><td rowspan="2">Repayment</td><td rowspan="2">maturity</td><td rowspan="2">Effective rate</td><td rowspan="2">Nominal rate</td></tr><tr><td>Tax ID No</td><td>Company</td><td>Country</td><td>Tax ID No</td><td>Financial institution</td><td>Country</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>Foreign</td><td>Scotiabank Cayman</td><td>USA</td><td>US\(</td><td>Upon maturity</td><td>05-29-2023</td><td>3.60%</td><td>3.98%</td></tr><tr><td>Foreign</td><td>Nitratos Naturais do Chile Lim</td><td>Brazil</td><td>Foreign</td><td>Banco ITAU Brasil</td><td>Brazil</td><td>BRL</td><td>Upon maturity</td><td>01-31-2019</td><td>5.17%</td><td>5.17%</td></tr><tr><td>Foreign</td><td>SQM Brasil Limitada</td><td>Brazil</td><td>Foreign</td><td>Banco ITAU Brasil</td><td>Brazil</td><td>BRL</td><td>Upon maturity</td><td>01-31-2019</td><td>5.5%</td><td>5.5%</td></tr></table>

<table><tr><td>Debtor</td><td colspan="2">Creditor</td><td colspan="3">Nominal amounts as of December 31, 2018</td><td colspan="5">Current amounts as of December 31, 2018</td></tr><tr><td rowspan="2">Company</td><td rowspan="2" colspan="2">Financial institution</td><td>Up to 90 days</td><td>90 days to 1 year</td><td>Total</td><td>Up to 90 days</td><td>90 days to 1 year</td><td>Subtotal</td><td>Borrowing costs</td><td>Total</td></tr><tr><td>ThUSS</td><td>ThUSS</td><td>ThUSS</td><td>ThUSS</td><td>ThUSS</td><td>ThUSS</td><td></td><td></td></tr><tr><td>SQM S.A.</td><td colspan="2">Scotiabank Cayman</td><td>-</td><td>-</td><td>-</td><td>-</td><td>248</td><td>248</td><td>-</td><td>248</td></tr><tr><td>Nitratos Naturais do Chile Lim</td><td colspan="2">Banco ITAU Brasil</td><td>-</td><td>-</td><td>-</td><td>11</td><td>-</td><td>11</td><td>-</td><td>11</td></tr><tr><td>SQM Brasil Limitada</td><td colspan="2">Banco ITAU Brasil</td><td>-</td><td>-</td><td>-</td><td>41</td><td>-</td><td>41</td><td>-</td><td>41</td></tr><tr><td>Total</td><td></td><td></td><td>-</td><td>-</td><td>-</td><td>52</td><td>248</td><td>300</td><td>-</td><td>300</td></tr></table>



## b) Unsecured obligations, current:

As of December 31, 2019 and 2018, the detail of current unsecured interest-bearing obligations is composed of promissory notes and bonds, as follows:

<table><tr><td colspan="3">Debtor</td><td rowspan="2">Number of registration or ID of the instrument</td><td rowspan="2">Series</td><td rowspan="2">Maturity date</td><td rowspan="2">Currency or adjustment index</td><td colspan="2">Periodicity</td><td rowspan="2">Effective rate</td><td rowspan="2">Nominal rate</td></tr><tr><td>Tax ID No.</td><td>Company</td><td>Country</td><td>Payment of interest</td><td>Repayment</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>-</td><td>MUS$250</td><td>04-21-2020</td><td>US\)</td><td>Semannual</td><td>Upon maturity</td><td>0.43%</td><td>5.50%</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>-</td><td>MUS$250</td><td>01-28-2020</td><td>US\)</td><td>Semannual</td><td>Upon maturity</td><td>2.35%</td><td>4.38%</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>-</td><td>MUS$300</td><td>04-03-2020</td><td>US\(</td><td>Semannual</td><td>Upon maturity</td><td>1.42%</td><td>3.63%</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>-</td><td>MUS$450</td><td>05-07-2020</td><td>US\(</td><td>Semannual</td><td>Upon maturity</td><td>4.07%</td><td>4.25%</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>564</td><td>H</td><td>01-05-2020</td><td>UF</td><td>Semannual</td><td>Semiannual</td><td>1.36%</td><td>4.90%</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>699</td><td>O</td><td>02-01-2020</td><td>UF</td><td>Semannual</td><td>Upon maturity</td><td>2.41%</td><td>3.80%</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>563</td><td>P</td><td>01-15-2020</td><td>UF</td><td>Semannual</td><td>Upon maturity</td><td>2.71%</td><td>3.25%</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>700</td><td>Q</td><td>06-01-2020</td><td>UF</td><td>Semannual</td><td>Upon maturity</td><td>3.11%</td><td>3.45%</td></tr></table>

<table><tr><td rowspan="3">Company</td><td rowspan="3">Country</td><td rowspan="3">Series</td><td colspan="4">Nominal maturities as of December 31, 2019</td><td colspan="5">Current maturities as of December 31, 2019</td></tr><tr><td rowspan="2">Up to 90 days</td><td>91 days to 1 year</td><td rowspan="2">Total</td><td rowspan="2">Up to 90 days</td><td>91 days to 1 year</td><td>Subtotal</td><td rowspan="2">Bond issuance costs</td><td rowspan="2">Total</td><td></td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td></tr><tr><td>SQM S.A.</td><td>Chile</td><td>MUS$250</td><td>-</td><td>252,674</td><td>252,674</td><td>-</td><td>252,674</td><td>252,674</td><td>(386)</td><td>252,288</td><td></td></tr><tr><td>SQM S.A.</td><td>Chile</td><td>MUS$250</td><td>4,648</td><td>-</td><td>4,648</td><td>4,648</td><td>-</td><td>4,648</td><td>(433)</td><td>4,215</td><td></td></tr><tr><td>SQM S.A.</td><td>Chile</td><td>MUS$300</td><td>-</td><td>2,658</td><td>2,658</td><td>-</td><td>2,658</td><td>2,658</td><td>(614)</td><td>2,044</td><td></td></tr><tr><td>SQM S.A.</td><td>Chile</td><td>MUS$450</td><td>-</td><td>2,869</td><td>2,869</td><td>-</td><td>2,869</td><td>2,869</td><td>(679)</td><td>2,190</td><td></td></tr><tr><td>SQM S.A.</td><td>Chile</td><td>H</td><td>17,166</td><td>-</td><td>17,166</td><td>17,166</td><td>-</td><td>17,166</td><td>(139)</td><td>17,027</td><td></td></tr><tr><td>SQM S.A.</td><td>Chile</td><td>O</td><td>890</td><td>-</td><td>890</td><td>890</td><td>-</td><td>890</td><td>(67)</td><td>823</td><td></td></tr><tr><td>SQM S.A.</td><td>Chile</td><td>P</td><td>1,686</td><td>-</td><td>1,686</td><td>1,686</td><td>-</td><td>1,686</td><td>(12)</td><td>1,674</td><td></td></tr><tr><td>SQM S.A.</td><td>Chile</td><td>Q</td><td>-</td><td>323</td><td>323</td><td>-</td><td>323</td><td>323</td><td>(6)</td><td>317</td><td></td></tr><tr><td>Total</td><td></td><td></td><td>24,390</td><td>258,524</td><td>282,914</td><td>24,390</td><td>258,524</td><td>282,914</td><td>(2,336)</td><td>280,578</td><td></td></tr></table>

Effective rates of bonds in Chilean pesos and UF are expressed and calculated in U.S. dollars based on the flows agreed in Cross Currency Swap Agreements.



<table><tr><td colspan="3">Debtor</td><td rowspan="2">Number of registration or ID of instrument</td><td rowspan="2">Series</td><td rowspan="2">Maturity date</td><td rowspan="2">Currency or adjustment index</td><td colspan="2">Periodicity</td><td rowspan="2">Effective rate</td><td rowspan="2">Nominal rate</td></tr><tr><td>Tax I No.</td><td>Company</td><td>Country</td><td>Payment of interest</td><td>Repayment</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>-</td><td>MUS$250</td><td>04-21-2019</td><td>US\)</td><td>Semiannual</td><td>Upon maturity</td><td>0.95%</td><td>5.50%</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>-</td><td>MUS$250</td><td>01-28-2019</td><td>US\(</td><td>Semiannual</td><td>Upon maturity</td><td>2.75%</td><td>4.38%</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>-</td><td>MUS$300</td><td>04-03-2019</td><td>US\(</td><td>Semiannual</td><td>Upon maturity</td><td>1.77%</td><td>3.63%</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>564</td><td>H</td><td>01-05-019</td><td>UF</td><td>Semiannual</td><td>Semiannual</td><td>1.90%</td><td>4.90%</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>699</td><td>O</td><td>02-01-2019</td><td>UF</td><td>Semiannual</td><td>Upon maturity</td><td>2.60%</td><td>3.80%</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>563</td><td>P</td><td>01-15-2019</td><td>UF</td><td>Semiannual</td><td>Upon maturity</td><td>3.07%</td><td>3.25%</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>700</td><td>Q</td><td>06-01-2019</td><td>UF</td><td>Semiannual</td><td>Upon maturity</td><td>3.34%</td><td>3.45%</td></tr></table>

<table><tr><td rowspan="3">Company</td><td rowspan="3">Country</td><td rowspan="3">Series</td><td colspan="3">Nominal maturities as of December 31, 2018</td><td colspan="6">Current maturities as of December 31, 2018</td></tr><tr><td rowspan="2">Up to 90 days</td><td rowspan="2">91 days to 1 year</td><td rowspan="2">Total</td><td rowspan="2">Up to 90 days</td><td rowspan="2">91 days to 1 year</td><td rowspan="2">Subtotal</td><td rowspan="2">Bond issuance costs</td><td rowspan="2">Total</td><td></td></tr><tr><td></td></tr><tr><td>SQM S.A.</td><td>Chile</td><td>MUS$250</td><td>2,674</td><td>-</td><td>2,674</td><td>2,674</td><td>-</td><td>2,674</td><td>(386)</td><td>2,288</td></tr><tr><td>SQM S.A.</td><td>Chile</td><td>MUS$250</td><td>-</td><td>4,648</td><td>4,648</td><td>-</td><td>4,648</td><td>4,648</td><td>(433)</td><td>4,215</td></tr><tr><td>SQM S.A.</td><td>Chile</td><td>MUS$300</td><td>2,658</td><td>-</td><td>2,658</td><td>2,658</td><td>-</td><td>2,658</td><td>(614)</td><td>2,044</td></tr><tr><td>SQM S.A.</td><td>Chile</td><td>H</td><td>-</td><td>3,756</td><td>3,756</td><td>-</td><td>3,756</td><td>3,756</td><td>(139)</td><td>3,617</td></tr><tr><td>SQM S.A.</td><td>Chile</td><td>O</td><td>-</td><td>934</td><td>934</td><td>-</td><td>934</td><td>934</td><td>(67)</td><td>867</td></tr><tr><td>SQM S.A.</td><td>Chile</td><td>P</td><td>-</td><td>1,784</td><td>1,784</td><td>-</td><td>1,784</td><td>1,784</td><td>(12)</td><td>1,772</td></tr><tr><td>SQM S.A.</td><td>Chile</td><td>Q</td><td>342</td><td>-</td><td>342</td><td>342</td><td>-</td><td>342</td><td>-</td><td>342</td></tr><tr><td>Total</td><td></td><td></td><td>5,674</td><td>11,122</td><td>16,796</td><td>5,674</td><td>11,122</td><td>16,796</td><td>(1,651)</td><td>15,145</td></tr></table>

Effective rates of bonds in Chilean pesos and UF are expressed and calculated in U.S. dollars based on the flows agreed in Cross Currency Swap Agreements.



## c) Classes of interest-bearing loans, non-current

The following table shows the details of bank loans that accrue non-current interest as of December 31, 2019. As of December 31, 2018 there were no loans:

<table><tr><td colspan="3">Debtor</td><td colspan="3">Creditor</td><td rowspan="2">Currency or adjustment index</td><td rowspan="2">Type of amortization</td><td rowspan="2">Effective rate</td><td rowspan="2">Nominal rate</td></tr><tr><td>Tax ID No.</td><td>Company</td><td>Country</td><td>Tax ID No.</td><td>Financial institution</td><td>Country</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>Foreign</td><td>Scotiabank Cayman</td><td>USA</td><td>USD</td><td>Maturity</td><td>2.84%</td><td>3.01%</td></tr></table>

<table><tr><td>Debtor</td><td colspan="2">Creditor</td><td colspan="6">Nominal non-current maturities as of December 31, 2019</td><td colspan="6">Non-current maturities as of December 31, 2019</td></tr><tr><td rowspan="2">Company</td><td rowspan="2" colspan="2">Financial institution</td><td>Between 1 and 2</td><td>Between 2 and 3</td><td>Between 3 and 4</td><td>Total</td><td>Between 1 and 2</td><td>Between 2 and 3</td><td>Between3 and 4</td><td>Subtotal</td><td>Costs of obtaining loans</td><td>Total</td><td></td><td></td></tr><tr><td>THUS\(</td><td>THUS\)</td><td>THUS\(</td><td>THUS\)</td><td>THUS\(</td><td>THUS\)</td><td>ThUS\(</td><td>THUS\(</td><td>THUS\)</td><td>THUS\(</td><td>THUS\(</td><td>THUS\)</td></tr><tr><td>SQM S.A.</td><td colspan="2">Scotiabank Cayman</td><td>-</td><td>-</td><td>70,000</td><td>70,000</td><td>-</td><td>-</td><td>70,000</td><td>70,000</td><td>(862)</td><td>69,138</td><td></td><td></td></tr><tr><td>Total</td><td></td><td></td><td>-</td><td>-</td><td>70,000</td><td>70,000</td><td>-</td><td>-</td><td>70,000</td><td>70,000</td><td>(862)</td><td>69,138</td><td></td><td></td></tr></table>

<table><tr><td colspan="3">Debtor</td><td colspan="3">Creditor</td><td rowspan="2">Currency or adjustment index</td><td rowspan="2">Type of amortization</td><td rowspan="2">Effective rate</td><td rowspan="2">Nominal rate</td></tr><tr><td>Tax ID No.</td><td>Company</td><td>Country</td><td>Tax ID No.</td><td>Financial institution</td><td>Country</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>Foreign</td><td>Scotiabank Cayman</td><td>USA</td><td>USD</td><td>Maturity</td><td>3,98%</td><td>3,98%</td></tr></table>

<table><tr><td>Debtor</td><td colspan="2">Creditor</td><td colspan="6">Nominal non-current maturities as of December 31, 2018</td><td colspan="6">Non-current maturities as of December 31, 2018</td></tr><tr><td rowspan="2">Company</td><td rowspan="2">Financial institution</td><td>Between 1 and 2</td><td>Between 2 and 3</td><td>Between 3 and 4</td><td>Total</td><td>Between 1 and 2</td><td>Between 2 and 3</td><td>Between3 and 4</td><td>Subtotal</td><td>Costs of obtaining loans</td><td>Total</td><td></td><td></td></tr><tr><td>THUS\(</td><td>THUS\)</td><td>THUS\(</td><td>THUS\)</td><td>THUS\(</td><td>THUS\)</td><td>ThUS\(</td><td>THUS\(</td><td>THUS\)</td><td>THUS\(</td><td>THUS\(</td><td>THUS\)</td></tr><tr><td>SQM S.A.</td><td colspan="2">Scotiabank Cayman</td><td>-</td><td>-</td><td>70,000</td><td>70,000</td><td>-</td><td>-</td><td>70,000</td><td>70,000</td><td>(1,130)</td><td>68,870</td><td></td><td></td></tr><tr><td>Total</td><td></td><td></td><td>-</td><td>-</td><td>70,000</td><td>70,000</td><td>-</td><td>-</td><td>70,000</td><td>70,000</td><td>(1,130)</td><td>68,870</td><td></td><td></td></tr></table>



## d) Non-current unsecured interest-bearing bonds

The following table shows the details of bank loans that accrue non-current interest as of December 31, 2019, As of December 31, 2018 there were no loans:

<table><tr><td colspan="2">Debtor</td><td rowspan="2">Country</td><td rowspan="2">Number of registration or ID of the instrument</td><td rowspan="2">Series</td><td rowspan="2">Maturity date</td><td rowspan="2">Currency or adjustment index</td><td colspan="2">Periodicity</td><td rowspan="2">Effective rate</td><td rowspan="2">Nominal rate</td></tr><tr><td>Tax ID No.</td><td>Company</td><td>Payment of interest</td><td>Repayment</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>-</td><td>MUS$250</td><td>01-28-2025</td><td>US\)</td><td>Semiannual</td><td>Upon maturity</td><td>4.08%</td><td>4.38%</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>-</td><td>MUS$300</td><td>04-03-2023</td><td>US\(</td><td>Semiannual</td><td>Upon maturity</td><td>3.43%</td><td>3.63%</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>-</td><td>MUS$450</td><td>05-07-2029</td><td>US\(</td><td>Semiannual</td><td>Upon maturity</td><td>4.19%</td><td>4.25%</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>564</td><td>H</td><td>01-05-2030</td><td>UF</td><td>Semiannual</td><td>Semiannual</td><td>4.78%</td><td>4.90%</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>699</td><td>O</td><td>02-01-2033</td><td>UF</td><td>Semiannual</td><td>Upon maturity</td><td>3.70%</td><td>5.50%</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>563</td><td>P</td><td>01-15-2028</td><td>UF</td><td>Semiannual</td><td>Upon maturity</td><td>3.24%</td><td>3.25%</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>700</td><td>Q</td><td>06-01-2038</td><td>UF</td><td>Semiannual</td><td>Upon maturity</td><td>3.45%</td><td>3.45%</td></tr></table>

<table><tr><td rowspan="2">Series</td><td colspan="6">Nominal non-current maturities as of December 31, 2019</td><td colspan="6">Non-current maturities as of December 31, 2019</td></tr><tr><td>Over 1 year to 2</td><td>Over 2 years to 3</td><td>Over 3 Years to 4</td><td>Over 4 Years to 5</td><td>Over 5 years</td><td>Total</td><td>Over 1 year to 2</td><td>Over 2 years to 3</td><td>Over 3 Years to 4</td><td>Over 4 Years to 5</td><td>Over 5 years</td><td>Subtotal</td></tr><tr><td></td><td>MUS$250</td><td>MUS\)</td><td>MUS\(</td><td>MUS\)</td><td>MUS\(</td><td>MUS\)</td><td>MUS$</td><td>MUS$</td><td>MUS$</td><td>MUS$</td><td>MUS\(</td><td>MUS\)</td></tr><tr><td>MUS$250</td><td>-</td><td>-</td><td>-</td><td>-</td><td>250,000</td><td>250,000</td><td>-</td><td>-</td><td>-</td><td>-</td><td>250,000</td><td>(1,514)</td></tr><tr><td>MUS$300</td><td>-</td><td>-</td><td>300,000</td><td>-</td><td>-</td><td>300,000</td><td>-</td><td>-</td><td>-</td><td>300,000</td><td>-</td><td>298,607</td></tr><tr><td>MUS$450</td><td>-</td><td>-</td><td>-</td><td>-</td><td>450,000</td><td>450,000</td><td>-</td><td>-</td><td>-</td><td>450,000</td><td>450,000</td><td>(5,923)</td></tr><tr><td>H</td><td>13,749</td><td>13,749</td><td>13,749</td><td>13,749</td><td>75,621</td><td>130,617</td><td>13,749</td><td>13,749</td><td>13,749</td><td>13,649</td><td>75,621</td><td>(1,253)</td></tr><tr><td>O</td><td>-</td><td>-</td><td>-</td><td>-</td><td>56,715</td><td>56,715</td><td>-</td><td>-</td><td>-</td><td>-</td><td>56,715</td><td>(811)</td></tr><tr><td>P</td><td>-</td><td>-</td><td>-</td><td>-</td><td>113,430</td><td>113,430</td><td>-</td><td>-</td><td>-</td><td>-</td><td>113,430</td><td>(89)</td></tr><tr><td>Q</td><td>-</td><td>-</td><td>-</td><td>-</td><td>113,430</td><td>113,430</td><td>-</td><td>-</td><td>-</td><td>-</td><td>113,430</td><td>(101)</td></tr><tr><td></td><td>Total</td><td>13,749</td><td>13,749</td><td>313,749</td><td>13,749</td><td>1,059,196</td><td>1,414,192</td><td>13,749</td><td>13,749</td><td>313,749</td><td>1,059,196</td><td>1,414,192</td><td>(11,084)</td></tr></table>



<table><tr><td colspan="3">Debtor</td><td rowspan="2">Number of registration or ID of the instrument</td><td rowspan="2">Series</td><td rowspan="2">Maturity date</td><td rowspan="2">Currency or adjustment index</td><td colspan="3">Periodicity</td><td rowspan="2">Effective rate</td><td rowspan="2">Nominal rate</td></tr><tr><td>Tax ID No.</td><td>Company</td><td>Country</td><td>Payment of interest</td><td>Repayment</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>-</td><td>MUS$250</td><td>04-21-2020</td><td>US\)</td><td>Semiannual</td><td>Upon maturity</td><td>5.50%</td><td>5.50%</td><td></td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>-</td><td>MUS$250</td><td>01-28-2025</td><td>US\(</td><td>Semiannual</td><td>Upon maturity</td><td>4.38%</td><td>4.38%</td><td></td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>-</td><td>MUS$300</td><td>04-03-2023</td><td>US\(</td><td>Semiannual</td><td>Upon maturity</td><td>3.63%</td><td>3.63%</td><td></td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>564</td><td>H</td><td>01-05-2030</td><td>UF</td><td>Semiannual</td><td>Semiannual</td><td>4.90%</td><td>4.90%</td><td></td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>699</td><td>O</td><td>02-01-2033</td><td>UF</td><td>Semiannual</td><td>Upon maturity</td><td>3.80%</td><td>5.50%</td><td></td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>563</td><td>P</td><td>01-15-2028</td><td>UF</td><td>Semiannual</td><td>Upon maturity</td><td>3.25%</td><td>3.25%</td><td></td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Chile</td><td>700</td><td>Q</td><td>06-01-2038</td><td>UF</td><td>Semiannual</td><td>Upon maturity</td><td>3.45%</td><td>3.45%</td><td></td></tr></table>

<table><tr><td rowspan="3">Series</td><td colspan="6">Nominal non-current maturities as of December 31, 2018</td><td colspan="6">Non-current maturities as of December 31, 2018</td></tr><tr><td>Over 1 year to 2</td><td>Over 2 years to 3</td><td>Over 3 Years to 4</td><td>Over 4 Years to 5</td><td>Over 5 years</td><td>Total</td><td>Over 1 year to 2</td><td>Over 2 years to 3</td><td>Over 3 Years to 4</td><td>Over 4 Years to 5</td><td>Over 5 years</td><td>Subtotal</td><td>Bond issuance costs</td><td>Total</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>THUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>$ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td></tr><tr><td>MUS$250</td><td>250,000</td><td>-</td><td>-</td><td>-</td><td>-</td><td>250,000</td><td>250,000</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>250,000</td><td>(131)</td></tr><tr><td>MUS$250</td><td>-</td><td>-</td><td>-</td><td>-</td><td>250,000</td><td>250,000</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>250,000</td><td>(2,202)</td><td>247,798</td></tr><tr><td>MUS$300</td><td>-</td><td>-</td><td>300,000</td><td>-</td><td>-</td><td>300,000</td><td>-</td><td>-</td><td>-</td><td>300,000</td><td>-</td><td>-</td><td>(2,006)</td><td>297,994</td></tr><tr><td>H</td><td>14,428</td><td>14,428</td><td>14,428</td><td>14,428</td><td>100,992</td><td>158,704</td><td>14,428</td><td>14,428</td><td>14,428</td><td>14,442</td><td>14,428</td><td>100,992</td><td>158,704</td><td>(1,392)</td></tr><tr><td>U</td><td>-</td><td>-</td><td>-</td><td>-</td><td>59,514</td><td>59,514</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>59,514</td><td>(87)</td><td>58,636</td></tr><tr><td>P</td><td>-</td><td>-</td><td>-</td><td>-</td><td>119,028</td><td>119,028</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>119,028</td><td>(101)</td><td>118,927</td></tr><tr><td>Q</td><td>-</td><td>-</td><td>-</td><td>-</td><td>119,028</td><td>119,028</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>119,028</td><td>(85)</td><td>118,943</td></tr><tr><td>Total</td><td>264,428</td><td>14,428</td><td>314,428</td><td>14,428</td><td>648,562</td><td>1,256,274</td><td>264,428</td><td>14,428</td><td>314,428</td><td>14,428</td><td>648,562</td><td>1,256,274</td><td>(6,795)</td><td>1,249,479</td></tr></table>



## e) Additional information

## Bonds

As of December 31, 2019 and, 2018, the details of each issuance are as follows:

## (i) Series “H” bonds

On January 13, 2009, the Company placed the Series H bond for UF 4,000,000 (ThUS$ 139,216) at an annual interest rate of 4.9%, with a term of 21 years and amortizations of principal beginning in 2019.

On July 5, 2019, amortization of principal amounted to UF 181,818.18. (ThUS$ 7.494) with an associated cross currency swap hedge income of ThUS$ 439.

As of December 31, 2019, and December 31, 2018, the Company has made the following payments with a charge to the Series H bonds:

<table><tr><td rowspan="2">Payments made</td><td>For the year ended December 31, 2019</td><td>For the year ended December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Payments of interest, Series H bonds</td><td>7,868</td><td>8,325</td></tr><tr><td>CCS Coverage</td><td>1,952</td><td>495</td></tr></table>

## (ii) Single series bonds, second issue ThUS$ 250,000

On April 21, 2010, the Company informed the CMF of its placement in international markets of an unsecured bond of ThUS$ 250,000 with a maturity of 10 years beginning on the aforementioned date with an annual interest rate of 5.5% and destined to refinance long-term liabilities.

As of December 31, 2019, and December 31, 2018, the detail of payments charged to the line of single series bonds, second issue is as follows

<table><tr><td rowspan="2">Payments made</td><td>For the year ended December 31, 2019</td><td>For the year ended December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Interest payment</td><td>13,750</td><td>13,750</td></tr></table>



## (iii) Series “O” bonds

On April 4, 2012, the Company issued “Series O” for UF 1,500,000 (ThUS$ 69,901) was placed at a term of 21 years with a single payment at the maturity of the term and an annual interest rate of 3.80%.

As of December 31, 2019, and December 31, 2018, the Company has made the following payments with a charge to Series O bonds and their associated CCS hedging:

<table><tr><td rowspan="2">Payments made</td><td>For the year ended December 31, 2019</td><td>For the year ended December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Payment of interest, Series O bonds</td><td>2,308</td><td>2,457</td></tr><tr><td>CCS Coverage</td><td>354</td><td>205</td></tr></table>

## (iv) Single series bonds, third issue MUS$ 300

On April 3, 2013, the Company issued a non-secured bond in the United States with a value of US$ 300 million. The bond is for a 10-year term with an annual coupon rate of 3.625%. The funds raised were used to refinance long term liabilities and finance general corporate objectives.

As of December 31, 2019, and December 31, 2018, the following payments have been made with a debit to the line of single-series bonds, third issue:

<table><tr><td rowspan="2">Payments made</td><td>For the year ended December 31, 2019</td><td>For the year ended December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Payment of interest</td><td>10,875</td><td>10,875</td></tr></table>



## (v) Single series bonds, fourth issuance ThUS $250,000

On October 23, 2014, the Company informed the CMF the issuance and placement of unsecured bonds amounting ThUS$ 250,000 in international markets. These bonds mature in 2025 and have annual interest rate of 4.375%, which were offered to investors at a price of 99.410% with respect to capital. The aforementioned agreement was performed in conformity with the provisions of Rule 144A of the US Securities Act of 1933 and these bonds were publicly offered in Chile.

For the years ended December 31, 2019, and 2018, the following payments have been made.

<table><tr><td rowspan="2">Payments made</td><td>For the year ended December 31, 2019</td><td>For the year ended December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Payment of interest</td><td>10,938</td><td>10,938</td></tr></table>

## (vi) Series “P” bonds

On April 5, 2018, the Company informed the CMF that on March 29, 2018, it was authorized the placement on the stock market of the Series “P” bond with a value of UF 3,000,000, with a charge to the 10 year Bonds Line registered in the CMF Securities Registry under number 563.

The bonds Series P (i) mature on January 15, 2028; (ii) will accrue on the unpaid principal, expressed in UF, at an annual interest rate of 3.25% from January 15, 2018; and (iii) can be early redeemed by the Company starting from the date of placement, that was, as of April 5, 2018.

For the years ended December 31, 2019 and 2018, the following payments and their associated CCS have been made:

<table><tr><td rowspan="2">Payments made</td><td>For the year ended December 31, 2019</td><td>For the year ended December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Payment of interest</td><td>3,960</td><td>1,085</td></tr><tr><td>CCS Coverage</td><td>2,995</td><td>1,421</td></tr></table>



## (vii) Series Q bonds

On October 31, 2018, the issuance of Series Q bonds (the "Bonds "Series Q") was authorized in the general stock market for the amount of UF 3,000,000, which were registered in the Securities Registry of your Commission on February 14, 2012 under number 700.

The bonds Series Q (i) mature on the first day of June 2038; (ii) will earn an interest rate of 3.45% per annum on the outstanding capital, expressed in Unidades de Fomento, from June 1, 2018 thereon; and (iii) may be early redeemed by the Company starting from the placement date, that was, as of November 8, 2018.

On November 8, 2018, all the Series Q Bonds have been placed and sold to Euroamerica S.A. for a total amount of $ 83,567,623,842, which was paid in full and in cash by Euroamerica S.A. to the Company.

The funds obtained from the aforementioned placement will be used approximately 90% to finance the expansion program of lithium, potassium nitrate and iodine plants in Chile; the remainder will be used for the investment plan of the Company and its subsidiaries, and to finance working capital.

For the years ended December 31, 2019 and 2018, the following payments have been made:

<table><tr><td>Payments made</td><td>For the year ended December 31, 2019</td><td>For the year ended December 31, 2018</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Payment of interest</td><td>3,791</td><td>319</td></tr></table>

## (viii) Single series fifth issue bonds ThUS$ 450,000

On May 7, 2019 the CMF was informed that the Company issued and placed unsecured bonds for ThUS$ 450,000 on international markets. Essentially, these bonds will mature in 2029, carry an interest rate of 4.25% per annum, and were offered to investors at a price of 99.984% with respect to the capital. This agreement was signed on May 7, 2019 and the bonds were issued and placed in accordance with the provisions of Rule 144A of the US Securities Act of 1933 and they will not be traded in Chile.

<table><tr><td rowspan="2">Payments made</td><td>For the year ended December 31, 2019</td><td>For the year ended December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Payment of interest</td><td>9,563</td><td>-</td></tr></table>



## f) Current and non-current lease liabilities

<table><tr><td rowspan="3">Associated leasing</td><td colspan="4">Currents</td><td colspan="4">Non-Currents</td><td rowspan="3">Balance as of December 31, 2019</td></tr><tr><td>Up to 1 month</td><td>1 to 3 months</td><td>3 to 12 months</td><td>Total</td><td>1 to 5 years</td><td>5 or more years</td><td>Total</td><td></td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>THUS\(</td><td>ThUS\)</td></tr><tr><td>Buildings</td><td>262</td><td>795</td><td>1,830</td><td>2,887</td><td>13,507</td><td>9,792</td><td>23,299</td><td>26,186</td><td></td></tr><tr><td>Transport equipment</td><td>70</td><td>211</td><td>571</td><td>852</td><td>2,530</td><td>-</td><td>2,530</td><td>3,382</td><td></td></tr><tr><td>Machinery, plant and equipment</td><td>327</td><td>993</td><td>2,635</td><td>3,955</td><td>3,993</td><td>381</td><td>4,374</td><td>8,329</td><td></td></tr><tr><td>Total</td><td>659</td><td>1,999</td><td>5,036</td><td>7,694</td><td>20,030</td><td>10,173</td><td>30,203</td><td>37,897</td><td></td></tr></table>

<table><tr><td rowspan="2">Changes in Lease Liabilities</td><td>As of December 31, 2018</td><td>Adoption of IFRS 16</td><td colspan="2">Monetary</td><td>Non-Monetary</td><td>Balance as of December 31, 2019</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>Principal paid</td><td>Interest paid</td><td>Interest accrued</td><td></td></tr><tr><td>Buildings</td><td>-</td><td>29,289</td><td>(3,101)</td><td>(840)</td><td>838</td><td>26,186</td></tr><tr><td>Machinery, plant and equipment</td><td>-</td><td>11,933</td><td>(3,605)</td><td>(635)</td><td>636</td><td>8,329</td></tr><tr><td>Transport equipment</td><td>-</td><td>3,893</td><td>(515)</td><td>(62)</td><td>66</td><td>3,382</td></tr><tr><td>Total</td><td>-</td><td>45,115</td><td>(7,221)</td><td>(1,537)</td><td>1,540</td><td>37,897</td></tr></table>

## Lease amounts that were not included in liabilities under IFRS 16

The weighted average of the incremental lease loan rate applied to lease liabilities recognized in the statement of financial position on December 31, 2019 is 8.08%. Total related expenses with lease payments under 1 year and low-value asset leases together with variable payments not included in the measurement of lease liabilities were ThUS$ 50,660 for the period ended December 31, 2019.



## 14.5 Trade and other payables

## a) Details trade and other payables

<table><tr><td rowspan="3">Details trade and Other payables</td><td colspan="3">As of December 31, 2019</td><td colspan="3">As of December 31, 2018</td></tr><tr><td>Current</td><td>Non-current</td><td>Total</td><td>Current</td><td>Non-current</td><td>Total</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Accounts payable</td><td>205,414</td><td>-</td><td>205,414</td><td>163,373</td><td>-</td><td>163,373</td></tr><tr><td>Other accounts payable</td><td>376</td><td>-</td><td>376</td><td>378</td><td>-</td><td>378</td></tr><tr><td>Total</td><td>205,790</td><td>-</td><td>205,790</td><td>163,751</td><td>-</td><td>163,751</td></tr></table>

As of December 31, 2019 and 2018, the balance of current and past due suppliers is as follows:

## Suppliers current on all payments

<table><tr><td rowspan="2">Type of Supplier</td><td colspan="6">Amounts according to payment periods as of December 31, 2019</td></tr><tr><td>Up to 30 days</td><td>31-60 days</td><td>61-90 days</td><td>91 - 120 days</td><td>121 - 365 days</td><td>366 and more days</td></tr><tr><td>Goods</td><td>126,577</td><td>4,655</td><td>128</td><td>116</td><td>2,019</td><td>-</td></tr><tr><td>Services</td><td>51,785</td><td>168</td><td>-</td><td>-</td><td>87</td><td>-</td></tr><tr><td>Others</td><td>8,741</td><td>146</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Total</td><td>187,103</td><td>4,969</td><td>128</td><td>116</td><td>2,106</td><td>-</td></tr></table>

<table><tr><td rowspan="2">Type of Supplier</td><td colspan="6">Amounts according to payment periods as of December 31, 2018</td></tr><tr><td>Up to 30 days</td><td>31-60 days</td><td>61-90 days</td><td>91 - 120 days</td><td>121 - 365 days</td><td>366 and more days</td></tr><tr><td>Goods</td><td>48,969</td><td>1,919</td><td>912</td><td>25</td><td>280</td><td>-</td></tr><tr><td>Services</td><td>37,376</td><td>314</td><td>157</td><td>107</td><td>54</td><td>-</td></tr><tr><td>Others</td><td>54,978</td><td>161</td><td>20</td><td>-</td><td>3</td><td>-</td></tr><tr><td>Total</td><td>141,323</td><td>2,394</td><td>1,089</td><td>132</td><td>337</td><td>-</td></tr></table>

## Suppliers past due on payments

<table><tr><td rowspan="2">Type of Supplier</td><td colspan="6">Amounts according to payment periods as of December 31, 2019</td></tr><tr><td>Up to 30 days</td><td>31-60 days</td><td>61-90 days</td><td>91 - 120 days</td><td>121 - 365 days</td><td>366 and more days</td></tr><tr><td>Goods</td><td>2,086</td><td>264</td><td>35</td><td>65</td><td>1,060</td><td>-</td></tr><tr><td>Services</td><td>3,073</td><td>329</td><td>116</td><td>387</td><td>580</td><td>-</td></tr><tr><td>Others</td><td>1,918</td><td>45</td><td>311</td><td>215</td><td>508</td><td>-</td></tr><tr><td>Total</td><td>7,077</td><td>638</td><td>462</td><td>667</td><td>2,148</td><td>-</td></tr></table>

<table><tr><td rowspan="2">Type of Supplier</td><td colspan="6">Amounts according to payment periods as of December 31, 2018</td></tr><tr><td>Up to 30 days</td><td>31-60 days</td><td>61-90 days</td><td>91 - 120 days</td><td>121 - 365 days</td><td>366 and more days</td></tr><tr><td>Goods</td><td>1,533</td><td>209</td><td>210</td><td>255</td><td>462</td><td>-</td></tr><tr><td>Services</td><td>12,229</td><td>838</td><td>109</td><td>111</td><td>450</td><td>-</td></tr><tr><td>Others</td><td>1,039</td><td>385</td><td>92</td><td>6</td><td>170</td><td>-</td></tr><tr><td>Total</td><td>14,801</td><td>1,432</td><td>411</td><td>372</td><td>1,082</td><td>-</td></tr></table>

Purchase commitments held by the Company are recognized as liabilities when the goods and services are received by the Company. As of December 31, 2019, the Company has purchase orders amounting to ThUS$ 101,280 (ThUS$ 59,919 as of December 31, 2018).



## 14.6 Financial liabilities at fair value through profit or loss

This balance relates to derivative instruments measured at their fair value, which have generated balances against the Company. The detail of this type of instrument is as follows:

<table><tr><td rowspan="2">Financial liabilities at fair value with an impact on profit or loss</td><td>As of December 31, 2019</td><td>Effect on profit or loss for the year ended December 31, 2019</td><td>As of December 31, 2018</td><td>Effect on profit or loss for the year ended December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Current</td><td></td><td></td><td></td><td></td></tr><tr><td>Derivative instruments (IRS)</td><td>-</td><td>(16)</td><td>91</td><td>16</td></tr><tr><td>Total</td><td>-</td><td>(16)</td><td>91</td><td>16</td></tr></table>



## 14.7 Financial asset and liability categories

## a) Financial Assets

<table><tr><td rowspan="3">Description of financial assets</td><td colspan="4">As of December 31, 2019</td><td colspan="4">As of December 31, 2018</td></tr><tr><td>Current</td><td>Non-current</td><td>Total</td><td>Current</td><td>Non-current</td><td>Total</td><td></td><td></td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td></td><td></td></tr><tr><td>Cash and cash equivalent</td><td>588,530</td><td>-</td><td>588,530</td><td>556,066</td><td>-</td><td>556,066</td><td></td><td></td></tr><tr><td>Trade receivables due from related parties</td><td>61,227</td><td>-</td><td>61,227</td><td>42,790</td><td>-</td><td>42,790</td><td></td><td></td></tr><tr><td>Financial assets measured at amortized cost</td><td>485,689</td><td>75</td><td>485,764</td><td>291,790</td><td>75</td><td>291,865</td><td></td><td></td></tr><tr><td>Loans and receivables measured at amortized cost</td><td>399,142</td><td>1,710</td><td>400,852</td><td>466,619</td><td>2,275</td><td>468,894</td><td></td><td></td></tr><tr><td>Total financial assets measured at amortized cost</td><td>1,534,588</td><td>1,785</td><td>1,536,373</td><td>1,357,265</td><td>2,350</td><td>1,359,615</td><td></td><td></td></tr><tr><td>For hedging purposes</td><td>17,270</td><td>3,918</td><td>21,188</td><td>18,238</td><td>13,425</td><td>31,663</td><td></td><td></td></tr><tr><td>Held for trading at fair value through profit or loss</td><td>2,531</td><td>-</td><td>2,531</td><td>2,693</td><td>-</td><td>2,693</td><td></td><td></td></tr><tr><td>Financial assets classified as available for sale at fair value through equity</td><td>-</td><td>4,785</td><td>4,785</td><td>-</td><td>3,631</td><td>3,631</td><td></td><td></td></tr><tr><td>Total financial assets at fair value</td><td>19,801</td><td>8,703</td><td>28,504</td><td>20,931</td><td>17,056</td><td>37,987</td><td></td><td></td></tr><tr><td>Total financial assets</td><td>1,554,389</td><td>10,488</td><td>1,564,877</td><td>1,378,196</td><td>19,406</td><td>1,397,602</td><td></td><td></td></tr></table>



## b) Financial Liabilities

<table><tr><td rowspan="3">Description of financial liabilities</td><td colspan="3">As of December 31, 2019</td><td colspan="3">As of December 31, 2018</td></tr><tr><td>Current</td><td>Non-current</td><td>Total</td><td>Current</td><td>Non-current</td><td>Total</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>For hedging purposes</td><td>7,183</td><td>16,477</td><td>23,660</td><td>5,285</td><td>12,033</td><td>17,318</td></tr><tr><td>Held for trading at fair value through profit or loss</td><td>3,168</td><td>-</td><td>3,168</td><td>2,855</td><td>-</td><td>2,855</td></tr><tr><td>Financial liabilities at fair value through profit or loss</td><td>10,351</td><td>16,477</td><td>26,828</td><td>8,140</td><td>12,033</td><td>20,173</td></tr><tr><td>Bank loans</td><td>199</td><td>69,138</td><td>69,337</td><td>300</td><td>68,870</td><td>69,170</td></tr><tr><td>Obligations to the public</td><td>280,578</td><td>1,403,108</td><td>1,683,686</td><td>15,145</td><td>1,249,479</td><td>1,264,624</td></tr><tr><td>Lease Liabilities</td><td>7,694</td><td>30,203</td><td>37,897</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Financial liabilities at amortized cost (trade and other payables)</td><td>205,790</td><td>-</td><td>205,790</td><td>163,751</td><td>-</td><td>163,751</td></tr><tr><td>Trade payables due to related parties</td><td>475</td><td>-</td><td>475</td><td>9</td><td>-</td><td>9</td></tr><tr><td>Total financial liabilities at amortized cost</td><td>494,736</td><td>1,502,449</td><td>1,997,185</td><td>179,205</td><td>1,318,349</td><td>1,497,554</td></tr><tr><td>Total financial liabilities</td><td>505,087</td><td>1,518,926</td><td>2,024,013</td><td>187,345</td><td>1,330,382</td><td>1,517,727</td></tr></table>



## 14.8 Fair value measurement of assets and liabilities

Financial assets and liabilities measured at fair value consist of Options and Forwards hedging the mismatch in the balance sheet and cash flows, CCS to hedge bonds issued in local currency (Peso/UF).

The value of the Company’s assets and liabilities recognized by CCS contracts is calculated as the difference between the present value of discounted cash flows of the asset (Ch/UF) and liability (US\() parts of the derivative. In the case of the IRS, the asset value recognized is calculated as the difference between the discounted cash flows of the asset (variable rate) and liability (fixed rate) parts of the derivative. Forwards are calculated as the difference between the strike price of the contract and the spot price plus the forwards points at the date of the contract financial options: the value recognized is calculated using the Black-Scholes method.

In the case of CCS, the entry data used for the valuation models are UF, peso, USD and basis swap rates. In the case of fair value calculations for IRS, the Forward Rate Agreement rate and ICVS 23 Curve (Bloomberg: cash/deposits rates, futures, swaps). In the case of forwards, the forwards curve for the currency in question is used, Finally, with options, the spot price, risk-free rate and volatility of exchange rate are used, all in accordance with the currencies used in each valuation. The financial information used as entry data for the Company’s valuation models is obtained from Bloomberg, the well-known financial software company. Conversely, the fair value provided by the counterparties of derivatives contracts is used only as a control and not for valuation.

The effects on profit or loss of movements in these amounts may be recognized in the caption Finance costs, foreign currency translation gain (loss) or cash flow hedges in the statement of comprehensive income, depending on each particular case.

The fair value measurement of debt is only performed to determine the present market value of secured and unsecured long-term obligations; bonds denominated in local currency (Ch\$/UF) and foreign currency (US\\)), credits denominated in foreign currency (US\\)), which is classified under Level 2 in the fair value hierarchy established by IFRS.

The value of the Company’s reported liabilities is calculated as the present value of discounted cash flows at market rates at the time of valuation, considering the maturity date and exchange rate. The entry data used for the model includes the UF and peso rates, which are obtained using Bloomberg, the well-known financial software company and Association of Banks and Financial Institutions.

The fair value hierarchy is detailed as follows:

a) Level 1: using quoted prices (unadjusted) only in active markets.

b) Level 2: when in any phase in the valuation process inputs other than quoted prices have been used in Level 1 that are observable directly in markets.

c) Level 3: inputs for the asset or liability that are not based on observable market data.



<table><tr><td rowspan="3">Fair value measurement of assets and liabilities</td><td colspan="3">As of December 31, 2019</td><td colspan="3">Measurement Methodology</td></tr><tr><td>Carrying Amount at Amortized</td><td>Fair value (informative)</td><td>Fair value</td><td>Level 1</td><td>Level 2</td><td>Level 3</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Financial Assets</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Cash and cash equivalents</td><td>588,530</td><td>588,530</td><td>-</td><td>-</td><td>588,530</td><td>-</td></tr><tr><td>Trade and other receivables, current</td><td>399,142</td><td>399,142</td><td>-</td><td>-</td><td>-</td><td>399,142</td></tr><tr><td>Trade receivables due from related parties, current</td><td>61,227</td><td>61,227</td><td>-</td><td>-</td><td>-</td><td>61,227</td></tr><tr><td>Other current financial assets:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>- Time deposits</td><td>485,689</td><td>485,689</td><td>-</td><td>-</td><td>485,689</td><td>-</td></tr><tr><td>- Derivative instruments</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>- Forwards</td><td>-</td><td>-</td><td>2,420</td><td>-</td><td>2,420</td><td>-</td></tr><tr><td>- Options</td><td>-</td><td>-</td><td>111</td><td>-</td><td>111</td><td>-</td></tr><tr><td>- Hedging assets</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>- Investment hedge swaps</td><td>-</td><td>-</td><td>17,270</td><td>-</td><td>17,270</td><td>-</td></tr><tr><td>Non-current accounts receivable</td><td>1,710</td><td>1,710</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Other non-current financial assets:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>- Other</td><td>94</td><td>94</td><td>-</td><td>-</td><td>94</td><td>-</td></tr><tr><td>- Actions</td><td>-</td><td>-</td><td>4,785</td><td>4,785</td><td>-</td><td>-</td></tr><tr><td>- Hedging assets - Swaps</td><td>-</td><td>-</td><td>3,918</td><td>-</td><td>3,918</td><td>-</td></tr><tr><td>Other current financial liabilities</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>- Bank loans</td><td>199</td><td>199</td><td>-</td><td>-</td><td>199</td><td>-</td></tr><tr><td>- Derivative instruments</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>- Forwards</td><td>-</td><td>-</td><td>2,837</td><td>-</td><td>2,837</td><td>-</td></tr><tr><td>- Options</td><td>-</td><td>-</td><td>289</td><td>-</td><td>289</td><td>-</td></tr><tr><td>- Hedging liabilities</td><td>-</td><td>-</td><td>7,183</td><td>-</td><td>7,183</td><td>-</td></tr><tr><td>- inversiones</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>- Unsecured obligations</td><td>280,578</td><td>280,578</td><td>-</td><td>-</td><td>280,578</td><td>-</td></tr><tr><td>- Current lease liabilities</td><td>7,694</td><td>7,694</td><td>-</td><td>-</td><td>7,694</td><td>-</td></tr><tr><td>Trade and other payables, current and non-current</td><td>205,790</td><td>205,790</td><td>-</td><td>-</td><td>205,790</td><td>-</td></tr><tr><td>Trade payables due to related parties, current</td><td>475</td><td>475</td><td>-</td><td>-</td><td>475</td><td>-</td></tr><tr><td>Other non-current financial liabilities:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>- Bank loans</td><td>69,138</td><td>71,033</td><td>-</td><td>-</td><td>71,033</td><td>-</td></tr><tr><td>- Unsecured obligations</td><td>1,403,108</td><td>1,658,506</td><td>-</td><td>-</td><td>1,658,506</td><td>-</td></tr><tr><td>- Non-current hedging liabilities</td><td>-</td><td>-</td><td>16,477</td><td>-</td><td>16,477</td><td>-</td></tr><tr><td>- Non-current lease liabilities</td><td>30,203</td><td>33,187</td><td>-</td><td>-</td><td>33,187</td><td>-</td></tr></table>



<table><tr><td rowspan="3">Fair value measurement of assets and liabilities</td><td colspan="3">As of December 31, 2018</td><td colspan="3">Measurement Methodology</td></tr><tr><td>Carrying Amount at Amortized</td><td>Fair value (informative)</td><td>Fair value</td><td>Level 1</td><td>Level 2</td><td>Level 3</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Financial Assets</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Cash and cash equivalents</td><td>556,066</td><td>556,066</td><td>-</td><td>-</td><td>556,066</td><td>-</td></tr><tr><td>Trade and other receivables, current</td><td>466,619</td><td>466,619</td><td>-</td><td>-</td><td>-</td><td>466,619</td></tr><tr><td>Trade receivables due from related parties, current</td><td>42,790</td><td>42,790</td><td>-</td><td>-</td><td>-</td><td>42,790</td></tr><tr><td>Other current financial assets:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>- Time deposits</td><td>291,790</td><td>291,790</td><td>-</td><td>-</td><td>291,790</td><td>-</td></tr><tr><td>- Forwards</td><td>-</td><td>-</td><td>2,637</td><td>-</td><td>2,637</td><td>-</td></tr><tr><td>- Options</td><td>-</td><td>-</td><td>56</td><td>-</td><td>56</td><td>-</td></tr><tr><td>- Hedging assets</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>- Investment hedge swaps</td><td>-</td><td>-</td><td>18,238</td><td>-</td><td>18,238</td><td>-</td></tr><tr><td>Non-current accounts receivable</td><td>2,275</td><td>2,275</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Other non-current financial assets:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>- Other</td><td>75</td><td>75</td><td>-</td><td>-</td><td>75</td><td>-</td></tr><tr><td>- Actions</td><td>-</td><td>-</td><td>3,631</td><td>-</td><td>-</td><td>-</td></tr><tr><td>- Hedging assets - Swaps</td><td>-</td><td>-</td><td>13,425</td><td>-</td><td>13,425</td><td>-</td></tr><tr><td>Other current financial liabilities</td><td></td><td></td><td></td><td></td><td></td><td>-</td></tr><tr><td>- Bank loans</td><td>300</td><td>300</td><td>-</td><td>-</td><td>300</td><td>-</td></tr><tr><td>- Forwards</td><td>-</td><td>-</td><td>2,723</td><td>-</td><td>2,723</td><td>-</td></tr><tr><td>- Options</td><td>-</td><td>-</td><td>132</td><td>-</td><td>132</td><td>-</td></tr><tr><td>- Hedging liabilities - Swaps</td><td>-</td><td>-</td><td>5,285</td><td>-</td><td>5,285</td><td>-</td></tr><tr><td>- Unsecured obligations</td><td>15,145</td><td>15,145</td><td>-</td><td>-</td><td>15,145</td><td>-</td></tr><tr><td>Trade and other payables, current and non-current</td><td>163,751</td><td>163,751</td><td>-</td><td>-</td><td>163,751</td><td>-</td></tr><tr><td>Trade payables due to related parties, current</td><td>9</td><td>9</td><td>-</td><td>-</td><td>9</td><td>-</td></tr><tr><td>Other non-current financial liabilities:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>- Bank loans</td><td>68,870</td><td>71,826</td><td>-</td><td>-</td><td>71,826</td><td>-</td></tr><tr><td>- Unsecured obligations</td><td>1,249,479</td><td>1,357,640</td><td>-</td><td>-</td><td>1,357,640</td><td>-</td></tr><tr><td>- Non-current hedging liabilities</td><td>-</td><td>-</td><td>12,033</td><td>-</td><td>12,033</td><td>-</td></tr></table>



## 14.9 Estimated fair value of financial instruments and financial derivatives

As required by IFRS 7, the following information is presented for the disclosure of the estimated fair value of financial assets and liabilities.

Although inputs represent Management's best estimate, they are subjective and involve significant estimates related to the current economic and market conditions, as well as risk features.

Methodologies and assumptions used depend on the risk terms and characteristics of instruments and include the following as a summary:

- Cash equivalent approximates fair value due to the short-term maturities of these instruments.

- The fair value of trade receivables, current is considered to be equal to the carrying amount due to the maturity of such accounts at short-term.

- The fair value of other current financial liabilities is considered to be equal to their carrying values.

- For interest-bearing liabilities with original maturity of more than a year, fair values are calculated by discounting contractual cash flows at their original current market rates with similar terms.

- The fair value of debt is considered in Level 2.

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

As indicated in paragraphs 33 to 42 of IFRS 7 the disclosure of information associated with the nature and scope of risks arising from financial instruments is presented in Note 5.



## Note 15 Intangible assets and goodwill

## 15.1 Balances

<table><tr><td rowspan="2">Balances</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Intangible assets other than goodwill</td><td>188,358</td><td>189,350</td></tr><tr><td>Goodwill</td><td>34,726</td><td>34,866</td></tr><tr><td>Total</td><td>223,084</td><td>224,216</td></tr></table>

## 15.2 Disclosures on intangible assets and goodwill

Intangible assets relate to goodwill, water rights, trademarks, industrial patents, rights of way, software, and mining claims which correspond to exploitation rights acquired from third parties.

Balances and movements in the main classes of intangible assets as of December 31, 2019 and December 31, 2018 are detailed as follows:

<table><tr><td rowspan="3">Intangible assets and goodwill</td><td rowspan="3">Useful life</td><td colspan="4">As of December 31, 2019</td></tr><tr><td>Gross Value</td><td>Accumulated amortization</td><td>Accumulated impairment</td><td>Net value</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>IT programs</td><td>Finite</td><td>34,471</td><td>(28,460)</td><td>-</td><td>6,011</td></tr><tr><td>Intellectual property rights, patents and other industrial property rights, service.</td><td>Finite</td><td>1,259</td><td>(1,131)</td><td>(7)</td><td>121</td></tr><tr><td>Mining claims, water rights and rights of way</td><td>Indefinite</td><td>182,260</td><td>-</td><td>(2,642)</td><td>179,618</td></tr><tr><td>Mining claims</td><td>Finite</td><td>1,500</td><td>(206)</td><td>-</td><td>1,294</td></tr><tr><td>Customer-related intangible assets</td><td>Finite</td><td>1,778</td><td>(505)</td><td>-</td><td>1,273</td></tr><tr><td>Other intangible assets.</td><td>Finite</td><td>929</td><td>(888)</td><td>-</td><td>41</td></tr><tr><td>Intangible assets other than goodwill</td><td></td><td>222,197</td><td>(31,190)</td><td>(2,649)</td><td>188,358</td></tr><tr><td>Goodwill</td><td>Indefinite</td><td>38,120</td><td>-</td><td>(3,394)</td><td>34,726</td></tr><tr><td>Total Intangible Assets</td><td></td><td>260,317</td><td>(31,190)</td><td>(6,043)</td><td>223,084</td></tr></table>



<table><tr><td rowspan="2">Intangible assets and goodwill</td><td rowspan="2">Useful life</td><td colspan="4">As of December 31, 2018</td></tr><tr><td>Gross Value</td><td>Accumulated amortization</td><td>Accumulated impairment</td><td>Net value</td></tr><tr><td></td><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>IT programs</td><td>Finite</td><td>29,137</td><td>(24,569)</td><td>-</td><td>4,568</td></tr><tr><td>Intellectual property rights, patents and other industrial property rights, service.</td><td>Finite</td><td>1,254</td><td>(1,096)</td><td>(7)</td><td>151</td></tr><tr><td>Mining claims, water rights and rights of way</td><td>Indefinite</td><td>183,349</td><td>-</td><td>(1,729)</td><td>181,620</td></tr><tr><td>Mining claims</td><td>Finite</td><td>1,500</td><td>(88)</td><td>-</td><td>1,412</td></tr><tr><td>Customer-related intangible assets</td><td>Indefinite</td><td>1,778</td><td>(205)</td><td>-</td><td>1,573</td></tr><tr><td>Other intangible assets</td><td>Indefinite</td><td>911</td><td>(885)</td><td>-</td><td>26</td></tr><tr><td>Intangible assets other than goodwill</td><td></td><td>217,929</td><td>(26,843)</td><td>(1,736)</td><td>189,350</td></tr><tr><td>Goodwill</td><td>Indefinite</td><td>38,120</td><td>-</td><td>(3,254)</td><td>34,866</td></tr><tr><td>Total Intangible Assets</td><td></td><td>256,049</td><td>(26,843)</td><td>(4,990)</td><td>224,216</td></tr></table>

## a) Estimated useful lives or amortization rates used for finite identifiable intangible assets

Finite useful life measures the length of, or number of production or similar units constituting that useful life.

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

Intellectual property rights, patents and other industrial property, service and exploitation rights, mainly relate to water rights and have a finite useful life to the extent to which they are subject to a fixed-term contract or otherwise they are considered to be indefinite.

The company owns mining claims granted by Corfo, which correspond to assets subject to restitution. For this reason, they are considered assets with a finite useful life and their useful life is assigned until the year 2030 when the contract ends.

## b) Method used to assess identifiable intangible assets with indefinite useful life

The recoverable value of the cash-generating unit has been determined based on a calculation of value-in-use using cash flow projections for a period of 5 years, plus perpetuity annually on December 31.

The current value of future cash flows generated by these assets has been estimated given the variation in sales volumes, market prices and costs, discounted at a weighted average cost of capital (WACC) rate of 8.48% as of December 31, 2019.

This group of intangible assets includes water rights acquired in Chile, and mining concessions held by the company in Chile and Australia, and these rights are recorded at acquisition cost.



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

<table><tr><td>Estimated useful life or amortization rate</td><td>Minimum Life or Rate</td><td>Maximum Life or Rate</td></tr><tr><td>Mining property, water rights and rights of way</td><td>Indefinite</td><td>Indefinite</td></tr><tr><td>Mining claims</td><td>1 year</td><td>11 years</td></tr><tr><td>Intellectual property rights, patents and other industrial property rights, service</td><td>1 year</td><td>16 years</td></tr><tr><td>Commercial trademarks</td><td>1 year</td><td>5 years</td></tr><tr><td>IT programs</td><td>2 years</td><td>6 years</td></tr></table>

The following table shows the movements in goodwill as of December 31, 2019:

<table><tr><td rowspan="2">Company</td><td>Gross value</td><td rowspan="2">Additional recognition</td><td rowspan="2">Accumulated impairment losses</td><td colspan="2">Net value</td></tr><tr><td>As of December 31, 2018</td><td>As of December 31, 2019</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td></td></tr><tr><td>SQM Industrial S.A.</td><td>3,214</td><td>-</td><td>(3,214)</td><td>-</td><td></td></tr><tr><td>SQM S.A.</td><td>22,255</td><td>-</td><td>-</td><td>22,255</td><td></td></tr><tr><td>SQM Iberian S.A.</td><td>148</td><td>-</td><td>-</td><td>148</td><td></td></tr><tr><td>SQM Investment Corporation</td><td>86</td><td>-</td><td>-</td><td>86</td><td></td></tr><tr><td>Soquimich Comercial S.A.</td><td>320</td><td>-</td><td>(180)</td><td>140</td><td></td></tr><tr><td>Soquimich European Holding</td><td>11,373</td><td>-</td><td>-</td><td>11,373</td><td></td></tr><tr><td>SQM Potasio S.A.</td><td>724</td><td>-</td><td>-</td><td>724</td><td></td></tr><tr><td>Total</td><td>38,120</td><td>-</td><td>(3,394)</td><td>34,726</td><td></td></tr></table>

d) Information to be disclosed on assets generated internally

The Company has no intangible assets generated internally.

Impairment of goodwill and intangible value

As of December 31, 2019 an intangible asset impairment of ThUS$ 913 was generated and a goodwill impairment of ThUS$ 140 was generated.



## e) Movements in identifiable intangible assets as of December 31, 2019:

<table><tr><td rowspan="2">Gross Value Movements in identifiable intangible assets</td><td>IT programs</td><td>Intellectual property rights, patents and other industrial property rights, service, Finite</td><td>Mining claims property, water rights, and rights of way, Indefinite</td><td>Mining claims finite</td><td>Customer-related intangible assets</td><td>Other intangible assets</td><td>Goodwill</td><td>Identifiable intangible assets</td></tr><tr><td>THUS\(</td><td>THUS\)</td><td>THUS\(</td><td>THUS\(</td><td>THUS\)</td><td>THUS\(</td><td>THUS\)</td><td>THUS\(</td></tr><tr><td>Opening Balance</td><td>29,137</td><td>1,254</td><td>183,349</td><td>1,500</td><td>1,778</td><td>911</td><td>38,120</td><td>256,049</td></tr><tr><td>Additions</td><td>2,606</td><td>5</td><td>227</td><td>-</td><td>-</td><td>18</td><td>-</td><td>2,856</td></tr><tr><td>Other increases / decreases for foreign currency</td><td>(7)</td><td>-</td><td>(2)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(9)</td></tr><tr><td>Decreases through sale</td><td>-</td><td>-</td><td>(1,314)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(1,314)</td></tr><tr><td>Other increases (decreases)</td><td>2,735</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>2,735</td></tr><tr><td>Total increases (decreases)</td><td>5,334</td><td>5</td><td>(1,089)</td><td>-</td><td>-</td><td>18</td><td>-</td><td>4,268</td></tr><tr><td>Closing balance</td><td>34,471</td><td>1,259</td><td>182,260</td><td>1,500</td><td>1,778</td><td>929</td><td>38,120</td><td>260,317</td></tr><tr><td rowspan="2">Accumulated amortization and impairment Movements in identifiable intangible assets</td><td>IT programs</td><td>Intellectual property rights, patents and other industrial property rights, service, Finite</td><td>Mining claims property, water rights, and rights of way, Indefinite</td><td>Mining claims finite</td><td>Customer-related intangible assets</td><td>Other intangible assets</td><td>Goodwill</td><td>Identifiable intangible assets</td></tr><tr><td>THUS\(</td><td>THUS\)</td><td>THUS\(</td><td>THUS\)</td><td>THUS\(</td><td>THUS\)</td><td>THEUS\(</td><td>THUS\)</td></tr><tr><td>Opening Balance</td><td>(24,569)</td><td>(1,103)</td><td>(1,729)</td><td>(88)</td><td>(205)</td><td>(885)</td><td>(3,254)</td><td>(31,833)</td></tr><tr><td>Other increases / decreases for foreign currency</td><td>3</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>3</td></tr><tr><td>Other increases (decreases)</td><td>(256)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(256)</td></tr><tr><td>Impairment losses recognized in profit or loss for the year</td><td>-</td><td>-</td><td>(913)</td><td>-</td><td>-</td><td>-</td><td>(140)</td><td>(1,053)</td></tr><tr><td>Amortization</td><td>(3,638)</td><td>(35)</td><td>-</td><td>(118)</td><td>(300)</td><td>(3)</td><td>-</td><td>(4,094)</td></tr><tr><td>Total increases (decreases)</td><td>(3,891)</td><td>(35)</td><td>(913)</td><td>(118)</td><td>(300)</td><td>(3)</td><td>(140)</td><td>(5,400)</td></tr><tr><td>Closing balance</td><td>(28,460)</td><td>(1,138)</td><td>(2,642)</td><td>(206)</td><td>(505)</td><td>(888)</td><td>(3,394)</td><td>(37,233)</td></tr></table>



<table><tr><td rowspan="2">Net value
Movements in Identifiable intangible assets</td><td rowspan="2">IT programs</td><td rowspan="2">Intellectual property rights, patents and other industrial property rights, service, Finite</td><td rowspan="2">Mining claims property, water rights, and rights of way, Indefinite</td><td rowspan="2">Mining property finite</td><td rowspan="2">Customer-related intangible assets</td><td rowspan="2">Other intangible assets</td><td rowspan="2">Goodwill</td><td rowspan="2">Identifiable intangible assets</td></tr><tr></tr><tr><td></td><td>THUS\(</td><td>THUS\)</td><td>THUS\(</td><td>THUS\)</td><td>THUS\(</td><td>THUS\(</td><td>THUS\)</td><td>THUS\(</td></tr><tr><td>Opening Balance</td><td>4,568</td><td>151</td><td>181,620</td><td>1,412</td><td>1,573</td><td>26</td><td>34,866</td><td>224,216</td></tr><tr><td>Additions</td><td>2,606</td><td>5</td><td>227</td><td>-</td><td>-</td><td>18</td><td>-</td><td>2,856</td></tr><tr><td>Amortization</td><td>(3,638)</td><td>(35)</td><td>-</td><td>(118)</td><td>(300)</td><td>(3)</td><td>-</td><td>(4,094)</td></tr><tr><td>Impairment losses recognized in profit or loss for the year</td><td>-</td><td>-</td><td>(913)</td><td>-</td><td>-</td><td>-</td><td>(140)</td><td>(1,053)</td></tr><tr><td>Other increases / decreases for foreign currency</td><td>(4)</td><td>-</td><td>(2)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(6)</td></tr><tr><td>Decreases through sale</td><td>-</td><td>-</td><td>(1,314)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(1,314)</td></tr><tr><td>Other increases (decreases)</td><td>2,479</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>2,479</td></tr><tr><td>Total increases (decreases)</td><td>1,443</td><td>(30)</td><td>(2,002)</td><td>(118)</td><td>(300)</td><td>15</td><td>(140)</td><td>(1,132)</td></tr><tr><td>Closing balance</td><td>6,011</td><td>121</td><td>179,618</td><td>1,294</td><td>1,273</td><td>41</td><td>34,726</td><td>223,084</td></tr></table>

Movements in identifiable intangible assets as of December 31, 2018:

<table><tr><td rowspan="2">Gross Value Movements in identifiable intangible assets</td><td rowspan="2">IT programs</td><td rowspan="2">Intellectual property rights, patents and other industrial property rights, service, Finite</td><td rowspan="2">Mining claims property, water rights, and rights of way, Indefinite</td><td rowspan="2">Mining property finite</td><td rowspan="2">Customer-related intangible assets</td><td rowspan="2">Other intangible assets</td><td rowspan="2">Goodwill</td><td rowspan="2">Identifiable intangible assets</td></tr><tr></tr><tr><td></td><td>THUS\(</td><td>THUS\)</td><td>THUS\(</td><td>THUS\)</td><td>THUS\(</td><td>THUS\(</td><td>THUS\)</td></tr><tr><td>Additions</td><td>25,060</td><td>1,250</td><td>104,858</td><td>1,500</td><td>1,778</td><td>171</td><td>37,972</td><td>172,589</td></tr><tr><td>Other increases / decreases for foreign currency</td><td>1,159</td><td>5</td><td>77,201</td><td>-</td><td>-</td><td>11</td><td>-</td><td>78,376</td></tr><tr><td>Other increases (decreases)</td><td>(5)</td><td>(1)</td><td>(4)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(10)</td></tr><tr><td>Total increases (decreases)</td><td>2,923</td><td>-</td><td>1,294</td><td>-</td><td>-</td><td>729</td><td>148</td><td>5,094</td></tr><tr><td>Closing balance</td><td>4,077</td><td>4</td><td>78,491</td><td>-</td><td>-</td><td>740</td><td>148</td><td>83,460</td></tr><tr><td></td><td>29,137</td><td>1,254</td><td>183,349</td><td>1,500</td><td>1,778</td><td>911</td><td>38,120</td><td>256,049</td></tr></table>



<table><tr><td>Accumulated amortization and impairment Movements in identifiable intangible assets</td><td>IT programs</td><td>Intellectual property rights, patents and other industrial property rights, service, Finite</td><td>Mining claims property, water rights, and rights of way, Indefinite</td><td>Mining claims finite</td><td>Customer-related intangible assets</td><td>Other intangible assets</td><td>Goodwill</td><td>Identifiable intangible assets</td></tr><tr><td></td><td>THUS\(</td><td>THUS\)</td><td>THUS\(</td><td>THUS\)</td><td>THUS\(</td><td>THUS\(</td><td>THUS\)</td><td>THUS\(</td></tr><tr><td>Opening Balance</td><td>(19.769)</td><td>(1.061)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(20.830)</td></tr><tr><td>Other increases / decreases for foreign currency exchange rates</td><td>4</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>4</td></tr><tr><td>Impairment losses recognized in profit or loss for the year</td><td>-</td><td>(7)</td><td>(1,729)</td><td>-</td><td>-</td><td>-</td><td>(3,254)</td><td>(4,990)</td></tr><tr><td>Amortization</td><td>(2,880)</td><td>(35)</td><td>-</td><td>(88)</td><td>(205)</td><td>-</td><td>-</td><td>(3,208)</td></tr><tr><td>Reclassification of/for construction in progress</td><td>(1,924)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(885)</td><td>-</td><td>(2,809)</td></tr><tr><td>Total increases (decreases)</td><td>(4,800)</td><td>(42)</td><td>(1,729)</td><td>(88)</td><td>(205)</td><td>(885)</td><td>(3,254)</td><td>(11,003)</td></tr><tr><td>Closing balance</td><td>(24,569)</td><td>(1,103)</td><td>(1,729)</td><td>(88)</td><td>(205)</td><td>(885)</td><td>(3,254)</td><td>(31,833)</td></tr></table>

<table><tr><td>Net value Movements in Identifiable intangible assets</td><td>IT programs</td><td>Intellectual property rights, patents and other industrial property rights, service, Finite</td><td>Mining claims property, water rights, and rights of way, Indefinite</td><td>Mining claims finite</td><td>Customer-related intangible assets</td><td>Other intangible assets</td><td>Goodwill</td><td>Identifiable intangible assets</td></tr><tr><td></td><td>THUS\(</td><td>THUS\)</td><td>THUS\(</td><td>THUS\)</td><td>THUS\(</td><td>THUS\(</td><td>THUS\)</td><td>THUS\(</td></tr><tr><td>Opening Balance</td><td>5,291</td><td>189</td><td>104,858</td><td>1,500</td><td>1,778</td><td>171</td><td>37,972</td><td>151,759</td></tr><tr><td>Additions</td><td>1,159</td><td>5</td><td>77,201</td><td>-</td><td>-</td><td>11</td><td>-</td><td>78,376</td></tr><tr><td>Amortization</td><td>(2,880)</td><td>(35)</td><td>-</td><td>(88)</td><td>(205)</td><td>-</td><td>-</td><td>(3,208)</td></tr><tr><td>Impairment losses recognized in profit or loss for the year</td><td>-</td><td>(7)</td><td>(1,729)</td><td>-</td><td>-</td><td>-</td><td>(3,254)</td><td>(4,990)</td></tr><tr><td>Other increases / decreases for foreign currency exchange rates</td><td>(1)</td><td>(1)</td><td>(4)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(6)</td></tr><tr><td>Reclassification of/for construction in progress</td><td>999</td><td>-</td><td>1,294</td><td>-</td><td>-</td><td>(156)</td><td>148</td><td>2,285</td></tr><tr><td>Total increases (decreases)</td><td>(723)</td><td>(38)</td><td>76,762</td><td>(88)</td><td>(205)</td><td>(145)</td><td>(3,106)</td><td>72,457</td></tr><tr><td>Closing balance</td><td>4,568</td><td>151</td><td>181,620</td><td>1,412</td><td>1,573</td><td>26</td><td>34,866</td><td>224,216</td></tr></table>



g) Movements in identifiable goodwill as of December 31, 2019:

<table><tr><td rowspan="2">Gross Value Movements in identifiable goodwill</td><td>Goodwill at the start of the period January 01, 2019</td><td>Additional recognition</td><td>Recognition subsequent to deferred tax assets (-)</td><td>Decreases for classification as held for sale (-)</td><td>Goodwill write-off without having been included previously in disposal groups classified as held for sale (-)</td><td>Impairment losses recognized in profit or loss for the year (-)</td><td>Increase (decrease) for net exchange differences</td><td>Increase (decrease) due to other changes</td><td>Total increase (decrease)</td><td>Goodwill at end of period</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>THUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>SQM Industrial S.A.</td><td>3,214</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>3,214</td><td></td></tr><tr><td>SQM S.A.</td><td>22,255</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>22,255</td><td></td></tr><tr><td>SQM Iberian S.A.</td><td>148</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>148</td><td></td></tr><tr><td>SQM Investment Corporation</td><td>86</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>86</td><td></td></tr><tr><td>Soquimich Comercial S.A.</td><td>320</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>320</td><td></td></tr><tr><td>Soquimich European Holding B.V.</td><td>11,373</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>11,373</td><td></td></tr><tr><td>SQM Potasio S.A.</td><td>724</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>724</td><td></td></tr><tr><td>Total increases (decreases)</td><td>38,120</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>38,120</td><td></td></tr><tr><td>Closing balance</td><td>38,120</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>38,120</td><td></td></tr></table>

<table><tr><td rowspan="2">Accumulated impairment Movements in identifiable goodwill</td><td>Goodwill at the start of the period January 01, 2019</td><td>Additional recognition</td><td>Recognition subsequent to deferred tax assets (-)</td><td>Decreases for classification as held for sale (-)</td><td>Goodwill write-off without having been included previously in disposal groups classified as held for sale (-)</td><td>Impairment losses recognized in profit or loss for the year (-)</td><td>Increase (decrease) for net exchange differences</td><td>Increase (decrease) due to other differences</td><td>Total increase (decrease)</td><td>Goodwill at end of period</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>THUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>SQM Industrial S.A.</td><td>(3,214)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(3,214)</td><td></td></tr><tr><td>SQM S.A.</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td>-</td><td></td></tr><tr><td>SQM Iberian S.A.</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td>-</td><td></td></tr><tr><td>SQM Investment Corporation</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(140)</td><td>-</td><td>-</td><td>(140)</td><td>(180)</td></tr><tr><td>Soquimich Comercial S.A.</td><td>(40)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td></td></tr><tr><td>Soquimich European Holding B.V.</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td>-</td><td></td></tr><tr><td>SQM Potasio S.A.</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(140)</td><td>-</td><td>-</td><td>(140)</td><td>(3,394)</td></tr><tr><td>Total increases (decreases)</td><td>(3,254)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(140)</td><td>-</td><td>-</td><td>(140)</td><td>(3,394)</td></tr><tr><td>Closing balance</td><td>(3,254)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(140)</td><td>-</td><td>-</td><td>(140)</td><td>(3,394)</td></tr></table>



<table><tr><td rowspan="2">Net Value
Movements in identifiable goodwill</td><td>Goodwill at the start of the period
January 01, 2019</td><td>Additional recognition</td><td>Recognition subsequent to deferred tax assets (-)</td><td>Decreases for classification as held for sale (-)</td><td>Goodwill write-off without having been included previously in disposal groups classified as held for sale (-)</td><td>Impairment losses recognized in profit or loss for the year (-)</td><td>Increase (decrease) for net exchange differences</td><td>Increase (decrease) due to other changes</td><td>Total increase (decrease)</td><td>Goodwill at end of period</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td></tr><tr><td>SQM Industrial S.A.</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td>-</td><td>-</td></tr><tr><td>SQM S.A.</td><td>22,255</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>22,255</td><td>-</td></tr><tr><td>SQM Iberian S.A.</td><td>148</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>148</td><td>-</td></tr><tr><td>SQM Investment Corporation</td><td>86</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>86</td><td>-</td></tr><tr><td>Soquimich Comercial S.A.</td><td>280</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(140)</td><td>-</td><td>-</td><td>(140)</td><td>140</td></tr><tr><td>Soquimich European Holding B.V.</td><td>11,373</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>11,373</td><td>-</td></tr><tr><td>SQM Potasio S.A.</td><td>724</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(140)</td><td>-</td><td>-</td><td>724</td><td>-</td></tr><tr><td>Total increases (decreases)</td><td>34,866</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(140)</td><td>-</td><td>-</td><td>(140)</td><td>34,726</td></tr><tr><td>Closing balance</td><td>34,866</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(140)</td><td>-</td><td>-</td><td>(140)</td><td>34,726</td></tr></table>

h) Movements in identifiable goodwill as of December 31, 2018: 

<table><tr><td rowspan="2">Gross Value
Movements in identifiable goodwill</td><td>Goodwill at the start of the period
January 01, 2018</td><td>Additional recognition</td><td>Recognition subsequent to deferred tax assets (-)</td><td>Decreases for classification as held for sale (-)</td><td>Goodwill write-off without having been included previously in disposal groups classified as held for sale (-)</td><td>Impairment losses recognized in profit or loss for the year (-)</td><td>Increase (decrease) for net exchange differences</td><td>Increase (decrease) due to other changes</td><td>Total increase (decrease)</td><td>Goodwill at end of period</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td></tr><tr><td>SQM Industrial S.A.</td><td>3,214</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>3,214</td></tr><tr><td>SQM S.A.</td><td>22,255</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>22,255</td></tr><tr><td>SQM Iberian S.A.</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>148</td><td>148</td></tr><tr><td>SQM Investment Corporation</td><td>86</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>86</td></tr><tr><td>Soquimich Comercial S.A.</td><td>320</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>320</td></tr><tr><td>Soquimich European Holding B.V.</td><td>11,373</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>11,373</td></tr><tr><td>SQM Potasio S.A.</td><td>724</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>724</td></tr><tr><td>Total increases (decreases)</td><td>37,972</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>148</td><td>38,120</td></tr><tr><td>Closing balance</td><td>37,972</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>148</td><td>38,120</td></tr></table>



<table><tr><td>Accumulated impairment Movements in identifiable goodwill</td><td>Goodwill at the start of the period January 01, 2018</td><td>Additional recognition</td><td>Recognition subsequent to deferred tax assets (-)</td><td>Decreases for classification as held for sale (-)</td><td>Goodwill released without having been included previously in disposal groups classified as held for sale (-)</td><td>Impairment losses recognized in profit or loss for the year (-)</td><td>Increase (decrease) for net exchange differences</td><td>Increase (decrease) due to other changes</td><td>Total increase (decrease)</td><td>Goodwill at end of period</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS$</td><td>ThUS$</td></tr><tr><td>SQM Industrial S.A.</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(3,214)</td><td>(3,214)</td><td>(3,214)</td></tr><tr><td>SQM S.A.</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td></td><td></td></tr><tr><td>SQM Iberian S.A.</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td></td><td></td></tr><tr><td>SQM Investment Corporation</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(40)</td><td>(40)</td><td>(40)</td></tr><tr><td>Soquimich Comercial S.A.</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td></td><td></td></tr><tr><td>Soquimich European Holding B.V.</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td></td><td></td></tr><tr><td>SQM Potasio S.A.</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td></td><td></td></tr><tr><td>Total increases (decreases)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(3,254)</td><td>(3,254)</td><td>(3,254)</td></tr><tr><td>Closing balance</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(3,254)</td><td>(3,254)</td><td>(3,254)</td></tr></table>

<table><tr><td>Net Value
Movements in identifiable goodwill</td><td>Goodwill at the start of the period January 01, 2018</td><td>Additional recognition</td><td>Recognition subsequent to deferred tax assets (-)</td><td>Decreases for classification as held for sale (-)</td><td>Goodwill released without having been included previously in disposal groups classified as held for sale (-)</td><td>Impairment losses recognized in profit or loss for the year (-)</td><td>Increase (decrease) for net exchange differences</td><td>Increase (decrease) due to other changes</td><td>Total increase (decrease)</td><td>Goodwill at end of period</td></tr><tr><td></td><td>ThUSS</td><td>ThUSS</td><td>ThUSS</td><td>ThUSS</td><td>ThUSS</td><td>ThUS\(</td><td>ThUSS</td><td>ThUSS</td><td>ThUSS</td><td>ThUSS</td></tr><tr><td>SQM Industrial S.A.</td><td>3,214</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(3,214)</td><td>(3,214)</td><td>-</td></tr><tr><td>SQM S.A.</td><td>22,255</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>22,255</td><td>-</td></tr><tr><td>SQM Iberian S.A.</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>148</td><td>148</td><td>148</td></tr><tr><td>SQM Investment Corporation</td><td>86</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>86</td><td>-</td></tr><tr><td>Soquimich Comercial S.A.</td><td>320</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(40)</td><td>(40)</td><td>280</td></tr><tr><td>Soquimich European Holding B.V.</td><td>11,373</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>11,373</td><td>-</td></tr><tr><td>SQM Potasio S.A.</td><td>724</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>724</td><td>-</td></tr><tr><td>Total increases (decreases)</td><td>37,972</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(3,106)</td><td>(3,106)</td><td>34,866</td></tr><tr><td>Closing balance</td><td>37,972</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(3,106)</td><td>(3,106)</td><td>34,866</td></tr></table>



## Note 16 Property, plant and equipment

As of December 31, 2019 and December 31, 2018, the detail of property, plant and equipment is as follows:

## 16.1 Types of property, plant and equipment

<table><tr><td rowspan="2">Description of types of property, plant and equipment</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Property, plant and equipment, net</td><td></td><td></td></tr><tr><td>Land</td><td>23,620</td><td>24,695</td></tr><tr><td>Buildings (1)</td><td>252,969</td><td>238,808</td></tr><tr><td>Other property, plant and equipment</td><td>32,604</td><td>28,175</td></tr><tr><td>Transport equipment (2)</td><td>6,042</td><td>2,892</td></tr><tr><td>Supplies and accessories</td><td>4,579</td><td>4,722</td></tr><tr><td>Office equipment</td><td>420</td><td>513</td></tr><tr><td>Network and communication equipment</td><td>663</td><td>692</td></tr><tr><td>Mining assets</td><td>23,174</td><td>11,501</td></tr><tr><td>IT equipment</td><td>4,359</td><td>4,980</td></tr><tr><td>Energy generating assets</td><td>5,998</td><td>6,117</td></tr><tr><td>Constructions in progress</td><td>375,316</td><td>207,830</td></tr><tr><td>Machinery, plant and equipment (3)</td><td>877,326</td><td>923,898</td></tr><tr><td>Total</td><td>1,607,070</td><td>1,454,823</td></tr><tr><td colspan="3">(1) The buildings line item includes ThUS$ 25,742 corresponding to right-of-use assets; (2) The line item “Transport equipment” Includes ThUS$ 3,356. corresponding to right-of-use assets; (3) the property, plant and equipment line item includes ThUS$ 8,066 corresponding to right-of-use assets; the total includes ThUS$ 37,164. corresponding to right-of-use assets (IFRS 16)</td></tr><tr><td>Property, plant and equipment, gross</td><td></td><td></td></tr><tr><td>Land</td><td>23,620</td><td>24,695</td></tr><tr><td>Buildings (1)</td><td>695,316</td><td>648,719</td></tr><tr><td>Other property, plant and equipment</td><td>257,206</td><td>245,731</td></tr><tr><td>Transport equipment (2)</td><td>16,036</td><td>11,668</td></tr><tr><td>Supplies and accessories</td><td>25,531</td><td>24,456</td></tr><tr><td>Office equipment</td><td>11,441</td><td>11,377</td></tr><tr><td>Network and communication equipment</td><td>8,009</td><td>7,505</td></tr><tr><td>Mining assets</td><td>161,619</td><td>132,309</td></tr><tr><td>IT equipment</td><td>28,693</td><td>29,955</td></tr><tr><td>Energy generating assets</td><td>38,495</td><td>36,930</td></tr><tr><td>Constructions in progress</td><td>375,316</td><td>207,830</td></tr><tr><td>Machinery, plant and equipment (3)</td><td>3,154,435</td><td>3,068,862</td></tr><tr><td>Total</td><td>4,795,717</td><td>4,450,037</td></tr><tr><td colspan="3">(1) The buildings line item includes ThUS$ 29,289 corresponding to right-of-use assets; (2) The line item “Transport equipment” Includes ThUS$ 3,893 corresponding to right-of-use assets; (3) the property, plant and equipment line item includes ThUS$ 11,933 corresponding to right-of-use assets; the total includes ThUS$ 45,115 corresponding to right-of-use assets (IFRS 16)</td></tr><tr><td>Accumulated depreciation and value impairment of property, plant and equipment, total</td><td></td><td></td></tr><tr><td>Accumulated depreciation and impairment of buildings (1)</td><td>(442,347)</td><td>(409,911)</td></tr><tr><td>Accumulated depreciation and impairment of other property, plant and equipment</td><td>(224,602)</td><td>(217,556)</td></tr><tr><td>Accumulated depreciation and impairment of transport equipment (2)</td><td>(9,994)</td><td>(8,776)</td></tr><tr><td>Accumulated depreciation and impairment of supplies and accessories</td><td>(20,952)</td><td>(19,734)</td></tr><tr><td>Accumulated depreciation and impairment of office equipment</td><td>(11,021)</td><td>(10,864)</td></tr><tr><td>Accumulated depreciation and impairment of network and communication equipment</td><td>(7,346)</td><td>(6,813)</td></tr><tr><td>Accumulated depreciation and impairment of mining assets</td><td>(138,445)</td><td>(120,808)</td></tr><tr><td>Accumulated depreciation and impairment of IT equipment</td><td>(24,334)</td><td>(24,975)</td></tr><tr><td>Accumulated depreciation and impairment of energy generating assets</td><td>(32,497)</td><td>(30,813)</td></tr><tr><td>Accumulated depreciation and impairment of machinery, plant and equipment (3)</td><td>(2,277,109)</td><td>(2,144,964)</td></tr><tr><td>Total</td><td>(3,188,647)</td><td>(2,995,214)</td></tr></table>

(1) The buildings line item includes ThUS(3,547) corresponding to depreciation of right-of-use assets; (2) The line item “Transport equipment”. Includes ThUS(537) corresponding to right-of-use assets; (3) The property, plant and equipment line item includes ThUS(3,867) corresponding to depreciation of right-of-use assets; the total includes ThUS(7,951) corresponding to depreciation of right-of-use assets (IFRS 16).



<table><tr><td rowspan="2">Description of types of property, plant and equipment</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Property, plant and equipment, net</td><td></td><td></td></tr><tr><td>Pumps</td><td>32,525</td><td>34,145</td></tr><tr><td>Conveyor Belt</td><td>21,911</td><td>22,082</td></tr><tr><td>Crystallizer</td><td>24,102</td><td>27,112</td></tr><tr><td>Plant Equipment</td><td>170,263</td><td>188,934</td></tr><tr><td>Tanks</td><td>14,159</td><td>14,876</td></tr><tr><td>Filter</td><td>27,080</td><td>29,300</td></tr><tr><td>Electrical equipment/facilities</td><td>92,090</td><td>96,179</td></tr><tr><td>Other Property, Plant &amp; Equipment</td><td>53,396</td><td>58,997</td></tr><tr><td>Site Closure</td><td>12,056</td><td>12,967</td></tr><tr><td>Right-of-use assets</td><td>8,066</td><td>-</td></tr><tr><td>Piping</td><td>96,402</td><td>98,498</td></tr><tr><td>Well</td><td>238,670</td><td>250,045</td></tr><tr><td>Pond</td><td>41,319</td><td>42,903</td></tr><tr><td>Spare Parts</td><td>45,287</td><td>47,860</td></tr><tr><td>Total</td><td>877,326</td><td>923,898</td></tr></table>



## 16.2 Conciliation of changes in property, plant and equipment by type:

Conciliation of changes in property, plant and equipment by class as of December 31, 2019 and December 31, 2018:

<table><tr><td rowspan="2">Conciliation of changes in property, plant and equipment by class as of December 31, 2019, gross amount</td><td>Land</td><td>Buildings</td><td>Other property, plant and equipment</td><td>Transport equipment</td><td>Supplies and accessories</td><td>Equipment office</td><td>Network and communication equipment</td><td>Mining assets</td><td>IT equipment</td><td>Energy generating assets</td><td>Assets under construction</td><td>Machinery, plant and equipment</td><td>Property, plant and equipment</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>THUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>thUS\(</td><td>ThUS\)</td><td>ThUS\(</td></tr><tr><td>Opening balance</td><td>24,695</td><td>648,719</td><td>245,731</td><td>11,668</td><td>24,456</td><td>11,377</td><td>7,505</td><td>132,309</td><td>29,955</td><td>36,930</td><td>207,830</td><td>3,068,862</td><td>4,450,037</td></tr><tr><td>Initial recognition of IFRS 16</td><td>-</td><td>29,289</td><td>-</td><td>3,893</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>11,933</td><td>45,115</td></tr><tr><td>Balance with recognition NIIF 16</td><td>24,695</td><td>678,008</td><td>245,731</td><td>15,561</td><td>24,456</td><td>11,377</td><td>7,505</td><td>132,309</td><td>29,955</td><td>36,930</td><td>207,830</td><td>3,080,795</td><td>4,495,152</td></tr><tr><td>Additions</td><td>-</td><td>290</td><td>332</td><td>-</td><td>37</td><td>43</td><td>159</td><td>-</td><td>492</td><td>-</td><td>314,236</td><td>6,077</td><td>321,666</td></tr><tr><td>Disposals</td><td>-</td><td>-</td><td>(858)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(3)</td><td>-</td><td>-</td><td>(17)</td><td>(878)</td></tr><tr><td>Increase (decrease) in foreign currency translation difference</td><td>(35)</td><td>(72)</td><td>(4)</td><td>(2)</td><td>(9)</td><td>(3)</td><td>-</td><td>-</td><td>(6)</td><td>-</td><td>-</td><td>(72)</td><td>(203)</td></tr><tr><td>Reclassifications</td><td>132</td><td>18,526</td><td>12,456</td><td>477</td><td>745</td><td>-</td><td>89</td><td>16,901</td><td>1,289</td><td>1,565</td><td>(140,104)</td><td>88,088</td><td>164</td></tr><tr><td>Other increases (decreases)</td><td>-</td><td>-</td><td>(451)</td><td>-</td><td>302</td><td>24</td><td>256</td><td>12,409</td><td>(3,034)</td><td>-</td><td>(6,646)</td><td>(20,436)</td><td>(17,576)</td></tr><tr><td>Decreases for classification as held for sale</td><td>(1,172)</td><td>(1,436)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td></td><td></td><td>(2,608)</td></tr><tr><td>Total changes</td><td>(1,075)</td><td>17,308</td><td>11,475</td><td>475</td><td>1,075</td><td>64</td><td>504</td><td>29,310</td><td>(1,262)</td><td>1,565</td><td>167,486</td><td>73,640</td><td>300,565</td></tr><tr><td>Closing balance</td><td>23,620</td><td>695,316</td><td>257,206</td><td>16,036</td><td>25,531</td><td>11,441</td><td>8,009</td><td>161,619</td><td>28,693</td><td>38,495</td><td>375,316</td><td>3,154,435</td><td>4,795,717</td></tr></table>

<table><tr><td rowspan="2">Conciliation of changes in property, plant and equipment by class as of December 31, 2019, accumulated depreciation</td><td>Land</td><td>Buildings</td><td>Other property, plant and equipment</td><td>Transport equipment</td><td>Supplies and accessories</td><td>Equipment office</td><td>Network and communication equipment</td><td>Mining assets</td><td>IT equipment</td><td>Energy generating assets</td><td>Assets under construction</td><td>Machinery, plant and equipment</td><td>Property, plant and equipment</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>THUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>thUS\(</td><td>ThUS\)</td><td>ThUS\(</td></tr><tr><td>Opening balance</td><td>-</td><td>(409,911)</td><td>(217,556)</td><td>(8,776)</td><td>(19,734)</td><td>(10,864)</td><td>(6,813)</td><td>(120,808)</td><td>(24,975)</td><td>(30,813)</td><td>-</td><td>(2,144,964)</td><td>(2,995,214)</td></tr><tr><td>Changes</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Disposals</td><td>-</td><td>-</td><td>858</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>1</td><td>-</td><td>-</td><td>-</td><td>859</td></tr><tr><td>Depreciation expense</td><td>-</td><td>(32,547)</td><td>(8,013)</td><td>(1,220)</td><td>(1,144)</td><td>(161)</td><td>(426)</td><td>(7,033)</td><td>(1,158)</td><td>(1,676)</td><td>-</td><td>(142,866)</td><td>(196,244)</td></tr><tr><td>Impairment</td><td>-</td><td>(49)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td>-</td><td>-</td><td>(49)</td></tr><tr><td>Increase (decrease) in foreign currency translation difference</td><td>-</td><td>28</td><td>3</td><td>1</td><td>7</td><td>1</td><td>-</td><td>-</td><td>5</td><td>-</td><td>-</td><td>34</td><td>79</td></tr><tr><td>Reclassifications</td><td>-</td><td>7</td><td>(6)</td><td>1</td><td>6</td><td>-</td><td>1</td><td>-</td><td>(5)</td><td>-</td><td>-</td><td>(207)</td><td>(203)</td></tr><tr><td>Other increases (decreases) (*)</td><td>-</td><td>(155)</td><td>112</td><td>-</td><td>(87)</td><td>3</td><td>(108)</td><td>(10,604)</td><td>1,798</td><td>(8)</td><td>-</td><td>10,894</td><td>1,845</td></tr><tr><td>Decreases for classification as held for sale</td><td>-</td><td>280</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td>-</td><td>-</td><td>280</td></tr><tr><td>Total changes</td><td>-</td><td>(32,436)</td><td>(7,046)</td><td>(1,218)</td><td>(1,218)</td><td>(157)</td><td>(533)</td><td>(17,637)</td><td>641</td><td>(1,684)</td><td>-</td><td>(132,145)</td><td>(193,433)</td></tr><tr><td>Closing balance</td><td>-</td><td>(442,347)</td><td>(224,602)</td><td>(9,994)</td><td>(20,952)</td><td>(11,021)</td><td>(7,346)</td><td>(138,445)</td><td>(24,334)</td><td>(32,497)</td><td>-</td><td>(2,277,109)</td><td>(3,188,647)</td></tr></table>



<table><tr><td rowspan="2">Conciliation of changes in property, plant and equipment by class as of December 31, 2019, net amount</td><td>Land</td><td>Buildings</td><td>Other property, plant and equipment</td><td>Transport equipment</td><td>Supplies and accessories</td><td>Equipment office</td><td>Network and communication equipment</td><td>Mining assets</td><td>IT equipment</td><td>Energy generating assets</td><td>Assets under construction</td><td>Machinery, plant and equipment</td><td>Property, plant and equipment</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>THUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>$ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Opening balance</td><td>24,695</td><td>238,808</td><td>28,175</td><td>2,892</td><td>4,722</td><td>513</td><td>692</td><td>11,501</td><td>4,980</td><td>6,117</td><td>207,830</td><td>923,898</td><td>1,454,823</td></tr><tr><td>Initial recognition of IFRS 16</td><td>-</td><td>29,289</td><td>-</td><td>3,893</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>11,933</td><td>45,115</td></tr><tr><td>Balance with recognition NIIF 16</td><td>24,695</td><td>268,097</td><td>28,175</td><td>6,785</td><td>4,722</td><td>513</td><td>692</td><td>11,501</td><td>4,980</td><td>6,117</td><td>207,830</td><td>935,831</td><td>1,499,938</td></tr><tr><td>Additions</td><td>-</td><td>290</td><td>332</td><td>-</td><td>37</td><td>43</td><td>159</td><td>-</td><td>492</td><td>-</td><td>314,236</td><td>6,077</td><td>321,666</td></tr><tr><td>Disposals</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(2)</td><td>-</td><td>-</td><td>-</td><td>(17)</td><td>(19)</td></tr><tr><td>Depreciation expense</td><td>-</td><td>(32,547)</td><td>(8,013)</td><td>(1,220)</td><td>(1,144)</td><td>(161)</td><td>(426)</td><td>(7,033)</td><td>(1,158)</td><td>(1,676)</td><td>-</td><td>(142,866)</td><td>(196,244)</td></tr><tr><td>Impairment</td><td>-</td><td>(49)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(1)</td><td>-</td><td>-</td><td>(49)</td></tr><tr><td>Increase (decrease) in foreign currency translation difference</td><td>(35)</td><td>(44)</td><td>(1)</td><td>(1)</td><td>(2)</td><td>(2)</td><td>-</td><td>-</td><td>(1)</td><td>-</td><td>-</td><td>(38)</td><td>(124)</td></tr><tr><td>Reclassifications</td><td>132</td><td>18,533</td><td>12,450</td><td>478</td><td>751</td><td>-</td><td>90</td><td>16,901</td><td>1,284</td><td>1,565</td><td>(140,104)</td><td>87,881</td><td>(39)</td></tr><tr><td>Other increases (decreases) (1)</td><td>-</td><td>(155)</td><td>(339)</td><td>-</td><td>215</td><td>27</td><td>148</td><td>1,805</td><td>(1,236)</td><td>(8)</td><td>(6,646)</td><td>(9,542)</td><td>(15,731)</td></tr><tr><td>Decreases for classification as held for sale (2)</td><td>(1,172)</td><td>(1,156)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(1)</td><td>-</td><td>-</td><td>(2,328)</td></tr><tr><td>Total changes</td><td>(1,075)</td><td>(15,128)</td><td>4,429</td><td>(743)</td><td>(143)</td><td>(93)</td><td>(29)</td><td>11,673</td><td>(621)</td><td>(119)</td><td>167,486</td><td>(58,505)</td><td>107,132</td></tr><tr><td>Closing balance</td><td>23,620</td><td>252,969</td><td>32,604</td><td>6,042</td><td>4,579</td><td>420</td><td>663</td><td>23,174</td><td>4,359</td><td>5,998</td><td>375,316</td><td>877,326</td><td>1,607,070</td></tr></table>

(1) The net balance of “Other Increases (Decreases)” corresponds to all those items that are reclassified to or from “Property, Plant and Equipment”, They can have the following origin: (i) work in progress which is expensed to profit or loss, forming part of operating costs or other expenses per function, as appropriate; (ii) the variation representing the purchase and use of materials and spare parts; (iii) projects corresponding mainly to exploration expenditures and ground studies that are reclassified to the item other non-current financial assets; (iv) software that is reclassified to “Intangibles”.

(2) The Company classifies as non-current held for sale property, plant and equipment (disposal group) that, at the closing date of the financial statements, is subject to a commitment for sale or where the sales process has been initiated and where the sale is expected to occur within twelve months of that date, is classified by the Company as non-current assets held for sale.

These assets or disposal groups are valued at the lower of carrying amount or the estimated sales value less the costs to sell and stop being amortized from the moment they are classified as non-current assets held for sale.



<table><tr><td rowspan="2">Conciliation of changes in property, plant and equipment by class as of December 31, 2018, gross amount</td><td>Land</td><td>Buildings</td><td>Other property, plant and equipment</td><td>Transport equipment</td><td>Supplies and accessories</td><td>Equipment office</td><td>Network and communication equipment</td><td>Mining assets</td><td>IT equipment</td><td>Energy generating assets</td><td>Assets under construction</td><td>Machinery, plant and equipment</td><td>Property, plant and equipment</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>THUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>TThUS\(</td><td>ThUS\)</td><td>ThUS\(</td></tr><tr><td>Opening balance</td><td>24,900</td><td>610,264</td><td>244,831</td><td>11,195</td><td>19,498</td><td>11,105</td><td>7,356</td><td>129,028</td><td>27,038</td><td>36,643</td><td>165,054</td><td>2,938,287</td><td>4,225,199</td></tr><tr><td>Additions</td><td>-</td><td>28</td><td>833</td><td>-</td><td>41</td><td>15</td><td>-</td><td>-</td><td>489</td><td>-</td><td>263,290</td><td>1,448</td><td>266,144</td></tr><tr><td>Disposals</td><td>-</td><td>(38)</td><td>(7,811)</td><td>(51)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(10)</td><td>-</td><td>(6,582)</td><td>(1,666)</td><td>(16,158)</td></tr><tr><td>Increase (decrease) in foreign currency translation difference</td><td>(64)</td><td>(134)</td><td>(8)</td><td>(3)</td><td>(19)</td><td>(6)</td><td>-</td><td>-</td><td>(11)</td><td>-</td><td>-</td><td>(153)</td><td>(398)</td></tr><tr><td>Reclassifications</td><td>-</td><td>38,746</td><td>10,330</td><td>529</td><td>4,889</td><td>268</td><td>150</td><td>3,281</td><td>2,100</td><td>75</td><td>(184,095)</td><td>123,726</td><td>(1)</td></tr><tr><td>Other increases (decreases)</td><td>-</td><td>(147)</td><td>(2,444)</td><td>(2)</td><td>47</td><td>(5)</td><td>(1)</td><td>-</td><td>349</td><td>212</td><td>(29,837)</td><td>7,220</td><td>(24,608)</td></tr><tr><td>Decreases for classification as held for sale</td><td>(141)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td>-</td><td>-</td><td>-</td><td>(141)</td></tr><tr><td>Total changes</td><td>(205)</td><td>38,455</td><td>900</td><td>473</td><td>4,958</td><td>272</td><td>149</td><td>3,281</td><td>2,917</td><td>287</td><td>42,776</td><td>130,575</td><td>224,838</td></tr><tr><td>Closing balance</td><td>24,695</td><td>648,719</td><td>245,731</td><td>11,668</td><td>24,456</td><td>11,377</td><td>7,505</td><td>132,309</td><td>29,955</td><td>36,930</td><td>207,830</td><td>3,068,862</td><td>4,450,037</td></tr></table>

<table><tr><td rowspan="2">Conciliation of changes in property, plant and equipment by class as of December 31, 2018, accumulated depreciation</td><td>Land</td><td>Buildings</td><td>Other property, plant and equipment</td><td>Transport equipment</td><td>Supplies and accessories</td><td>Equipment office</td><td>Network and communication equipment</td><td>Mining assets</td><td>IT equipment</td><td>Energy generating assets</td><td>Assets under construction</td><td>Machinery, plant and equipment</td><td>Property, plant and equipment</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>THUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>TThUS\(</td><td>ThUS\)</td><td>ThUS\(</td></tr><tr><td>Opening balance</td><td>-</td><td>(379,945)</td><td>(219,969)</td><td>(7,938)</td><td>(17,626)</td><td>(10,618)</td><td>(6,306)</td><td>(112,791)</td><td>(23,637)</td><td>(28,782)</td><td>-</td><td>(1,988,233)</td><td>(2,795,845)</td></tr><tr><td>Disposals</td><td>-</td><td>38</td><td>7,737</td><td>8</td><td>-</td><td>-</td><td>-</td><td>-</td><td>10</td><td>-</td><td>-</td><td>1,722</td><td>9,515</td></tr><tr><td>Depreciation expense</td><td>-</td><td>(29,829)</td><td>(7,415)</td><td>(880)</td><td>(2,056)</td><td>(271)</td><td>(483)</td><td>(8,017)</td><td>(1,374)</td><td>(2,026)</td><td>-</td><td>(158,900)</td><td>(211,251)</td></tr><tr><td>Impairment</td><td>-</td><td>(437)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(12)</td><td>-</td><td>(941)</td><td>(1,390)</td></tr><tr><td>Increase (decrease) in foreign currency translation difference</td><td>-</td><td>41</td><td>4</td><td>1</td><td>12</td><td>3</td><td>-</td><td>-</td><td>(1)</td><td>-</td><td>-</td><td>61</td><td>121</td></tr><tr><td>Reclassifications</td><td>-</td><td>106</td><td>(483)</td><td>-</td><td>(87)</td><td>(17)</td><td>(28)</td><td>-</td><td>90</td><td>1</td><td>-</td><td>419</td><td>1</td></tr><tr><td>Other increases (decreases)</td><td>-</td><td>115</td><td>2,570</td><td>33</td><td>23</td><td>39</td><td>4</td><td>-</td><td>(63)</td><td>6</td><td>-</td><td>908</td><td>3,635</td></tr><tr><td>Total changes</td><td>-</td><td>(29,966)</td><td>2,413</td><td>(838)</td><td>(2,108)</td><td>(246)</td><td>(507)</td><td>(8,017)</td><td>(1,338)</td><td>(2,031)</td><td>-</td><td>(156,731)</td><td>(199,369)</td></tr><tr><td>Closing balance</td><td>-</td><td>(409,911)</td><td>(217,556)</td><td>(8,776)</td><td>(19,734)</td><td>(10,864)</td><td>(6,813)</td><td>(120,808)</td><td>(24,975)</td><td>(30,813)</td><td>-</td><td>(2,144,964)</td><td>(2,995,214)</td></tr></table>



(1) The net balance of “Other increases (Decreases)” corresponds to all those items that are reclassified to or from property, plant and equipment, They can have

<table><tr><td rowspan="2">Conciliation of changes in property, plant and equipment by class as of December 31, 2018, net amount</td><td>Land</td><td>Buildings</td><td>Other property, plant and equipment</td><td>Transport equipment</td><td>Supplies and accessories</td><td>Equipment office</td><td>Network and communication equipment</td><td>Mining assets</td><td>IT equipment</td><td>Energy generating assets</td><td>Assets under construction</td><td>Machinery, plant and equipment</td><td>Property, plant and equipment</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>THUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>$ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Opening balance</td><td>24,900</td><td>230,319</td><td>24,862</td><td>3,257</td><td>1,872</td><td>487</td><td>1,050</td><td>16,237</td><td>3,401</td><td>7,861</td><td>165,054</td><td>950,054</td><td>1,429,354</td></tr><tr><td>Changes</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Additions</td><td>-</td><td>28</td><td>833</td><td>-</td><td>41</td><td>15</td><td>-</td><td>-</td><td>489</td><td>-</td><td>263,290</td><td>1,448</td><td>266,144</td></tr><tr><td>Disposals</td><td>-</td><td>-</td><td>(74)</td><td>(43)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(6,582)</td><td>56</td><td>(6,643)</td></tr><tr><td>Depreciation expense</td><td>-</td><td>(29,829)</td><td>(7,415)</td><td>(880)</td><td>(2,056)</td><td>(271)</td><td>(483)</td><td>(8,017)</td><td>(1,374)</td><td>(2,026)</td><td>-</td><td>(158,900)</td><td>(211,251)</td></tr><tr><td>Impairment</td><td>-</td><td>(437)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(12)</td><td>-</td><td>(941)</td><td>(1,390)</td></tr><tr><td>Increase (decrease) in foreign currency translation difference</td><td>(64)</td><td>(93)</td><td>(4)</td><td>(2)</td><td>(7)</td><td>(3)</td><td>-</td><td>-</td><td>(12)</td><td>-</td><td>-</td><td>(92)</td><td>(277)</td></tr><tr><td>Reclassifications</td><td>-</td><td>38,852</td><td>9,847</td><td>529</td><td>4,802</td><td>251</td><td>122</td><td>3,281</td><td>2,190</td><td>76</td><td>(184,095)</td><td>124,145</td><td>-</td></tr><tr><td>Other increases (decreases) (1)</td><td>-</td><td>(32)</td><td>126</td><td>31</td><td>70</td><td>34</td><td>3</td><td>-</td><td>286</td><td>218</td><td>(29,837)</td><td>8,128</td><td>(20,973)</td></tr><tr><td>Decreases for classification as held for sale (2)</td><td>(141)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td>-</td><td>-</td><td>-</td><td>(141)</td></tr><tr><td>Total changes</td><td>(205)</td><td>8,489</td><td>3,313</td><td>(365)</td><td>2,850</td><td>26</td><td>(358)</td><td>(4,736)</td><td>1,579</td><td>(1,744)</td><td>42,776</td><td>(26,156)</td><td>25,469</td></tr><tr><td>Closing balance</td><td>24,695</td><td>238,808</td><td>28,175</td><td>2,892</td><td>4,722</td><td>513</td><td>692</td><td>11,501</td><td>4,980</td><td>6,117</td><td>207,830</td><td>923,898</td><td>1,454,823</td></tr></table>

the following origin: (i) work in progress which is expensed to profit or loss, forming part of operating costs or other expenses per function, as appropriate; , (ii) the variation representing the purchase and use of materials and spare parts; (iii) projects corresponding mainly to exploration expenditures and ground studies that are reclassified to the item other non-current financial assets; (iv) assets for retirement obligations and (v) software that is reclassified to Intangibles.

(2) The Company classifies as non-current held for sale property, plant and equipment (disposal group) that, at the closing date of the financial statements, is subject to a commitment for sale or where the sales process has been initiated and where the sale is expected to occur within twelve months of that date, is classified by the Company as non-current assets held for sale.

These assets or disposal groups are valued at the lower of carrying amount or the estimated sales value less the costs to sell and stop being amortized from the moment they are classified as non-current assets held for sale.



## 16.3 Conciliation of changes in right of use assets, by classes

<table><tr><td rowspan="2">Conciliation of changes in property, plant and equipment by class as of December 31, 2019, net amount</td><td>Land</td><td>Buildings</td><td>Other property, plant and equipment</td><td>Transport equipment</td><td>Supplies and accessories</td><td>Equipment office</td><td>Network and communication equipment</td><td>Mining assets</td><td>IT equipment</td><td>Energy generating assets</td><td>Assets under construction</td><td>Machinery, plant and equipment</td><td>Property, plant and equipment</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>THUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>$ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Opening balance</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Initial recognition of IFRS 16</td><td>-</td><td>29,289</td><td>-</td><td>3,893</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>11,933</td><td>45,115</td></tr><tr><td>Balance with recognition NIIF 16</td><td>-</td><td>29,289</td><td>-</td><td>3,893</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>11,933</td><td>45,115</td></tr><tr><td>Additions</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Disposals</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Depreciation expense</td><td>-</td><td>(3,547)</td><td>-</td><td>(537)</td><td>-</td><td>-</td><td>-</td><td></td><td>-</td><td>-</td><td>-</td><td>(3,867)</td><td>(7,951)</td></tr><tr><td>Impairment</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Increase (decrease) in foreign currency translation difference</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Reclassifications</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Other increases (decreases)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Decreases for classification as held for sale</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Total changes</td><td>-</td><td>(3,547)</td><td>-</td><td>(537)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(3,867)</td><td>(7,951)</td></tr><tr><td>Closing balance</td><td>-</td><td>25,742</td><td>-</td><td>3,356</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>8,066</td><td>37,164</td></tr></table>

The Company’s lease activities included the following aspects:

(a) The nature of the Company’s lease activities is related to contracts focused primarily on business operations, notably rights-of-use to equipment and real estate.

(b) The Company does not estimate any significant future cash outflows that would potentially expose the Company, and these are likewise not reflected in the measurement of lease liabilities, related to concepts such as (i) variable lease payments, (ii) expansion options and termination options, (iii) guaranteed residual value and (iv) leases not yet undertaken but committed by the Company.

(c) These are not subject to restrictions or agreements imposed by contracts.

(d) There were no sales lease back in the period.



## 16.4 Detail of property, plant and equipment pledged as guarantee

There are no restrictions in title or guarantees for compliance with obligations that affect property, plant and equipment.

## 16.5 Impairment of assets

As indicated in Note 3.16 to the financial statements, the recoverable amount of property, plant and equipment is measured provided that there is an indication that the asset could be impaired. As of December 31, 2019, adjustments for impairment of assets were generated in the amount of ThUS$ 49. As of December 31, 2018 adjustments for impairment of assets were generated in the amount of ThUS$ 1,390.

## 16.6 Additional Information

As of December 31, 2019, interests were activated in the constructions underway as presented in Note 28.



## Note 17 Other current and non-current non-financial assets

As of December 31, 2019, and December 31, 2018, the detail of other current and non-current assets is as follows:

<table><tr><td rowspan="2">Other non-financial assets, current</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Domestic Value Added Tax</td><td>17,807</td><td>20,209</td></tr><tr><td>Foreign Value Added Tax</td><td>8,566</td><td>7,211</td></tr><tr><td>Prepaid mining licenses</td><td>1,244</td><td>1,329</td></tr><tr><td>Prepaid insurance</td><td>7,135</td><td>1,763</td></tr><tr><td>Other prepayments</td><td>1,423</td><td>1,774</td></tr><tr><td>Refund of Value Added Tax to exporters</td><td>10,560</td><td>12,545</td></tr><tr><td>Other taxes</td><td>3,213</td><td>2,800</td></tr><tr><td>Other assets</td><td>604</td><td>341</td></tr><tr><td>Total</td><td>50,552</td><td>47,972</td></tr></table>

<table><tr><td rowspan="2">Other non-financial assets, non-current</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Stain development expenses and prospecting expenses (1)</td><td>18,654</td><td>26,189</td></tr><tr><td>Guarantee deposits</td><td>551</td><td>712</td></tr><tr><td>Other assets</td><td>524</td><td>638</td></tr><tr><td>Total</td><td>19,729</td><td>27,539</td></tr></table>

1) Conciliation of changes in assets for exploration and mineral resource evaluation, by type.

Movements in assets for the exploration and evaluation of mineral resources as of December 31, 2019, and December 31, 2018:

<table><tr><td rowspan="2">Conciliation</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Opening balance</td><td>26,189</td><td>17,721</td></tr><tr><td>Change in assets for exploration and evaluation of mineral resources</td><td></td><td></td></tr><tr><td>Additions</td><td>-</td><td>11,298</td></tr><tr><td>Short-term reclassifications</td><td>(1,311)</td><td>1,987</td></tr><tr><td>Increase (decrease) due to transfers and other charges</td><td>(6,224)</td><td>(4,817)</td></tr><tr><td>Total changes</td><td>(7,535)</td><td>8,468</td></tr><tr><td>Saldo final</td><td>18,654</td><td>26,189</td></tr></table>

As of the presentation date, no reevaluations of assets for exploration and assessment of mineral resources have been conducted.



## Note 18 Employee benefits

## 18.1 Provisions for employee benefits

<table><tr><td rowspan="2">Classes of benefits and expenses by employee</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Current</td><td></td><td></td></tr><tr><td>Profit sharing and bonuses</td><td>16,387</td><td>20,085</td></tr><tr><td>Total</td><td>16,387</td><td>20,085</td></tr><tr><td>Non-current</td><td></td><td></td></tr><tr><td>Profit sharing and bonuses</td><td>8,026</td><td>8,831</td></tr><tr><td>Severance indemnity payments</td><td>27,814</td><td>28,233</td></tr><tr><td>Total</td><td>35,840</td><td>37,064</td></tr></table>

## 18.2 Policies on defined benefit plan

This policy is applied to all benefits received for services provided by the Company’s employees. Short-term benefits for active employees are represented by salaries, social welfare benefits, paid time off, sickness and other types of leave, profit sharing and incentives and non-monetary benefits; e.g., healthcare service, housing, subsidized or free goods or services. These will be paid in a term which does not exceed twelve months.

The Company only provides compensation and benefits to active employees, with the exemption of SQM North America. (see Note 18.4)

The Company maintains incentive programs for its employees based on their personal performance, the Company’s performance and other short-term and long-term indicators.

For each incentive bonus delivered to the Company’s employees, there will be a disbursement in the first quarter of the following year and this will be calculated based on profit for the period at the end of each period applying a factor obtained subsequent to each employee’s appraisal process.

Employee benefits include retention bonuses for the Company’s executives, which are linked to the Company’s share price and are paid in cash.

Staff severance indemnities are agreed and payable based on the final salary, calculated in accordance with each year of service to the Company, with certain maximum limits in respect of either the number of years or in monetary terms. In general, this benefit is payable when the employee or worker ceases to provide his/her services to the Company and there are a number of different circumstances through which a person can be eligible for it, as indicated in the respective agreements; e.g. retirement, dismissal, voluntary retirement, incapacity or disability, death, etc.

Law No. 19,728 published on May 14, 2001 which became effective on October 1, 2002 required Compulsory Unemployment Insurance in favor of all dependent employees regulated by the Chilean Labor Code, Article 5 of this law established that this insurance is paid through monthly contribution payments by both the employee and the employer.



## 18.3 Other long-term benefits

The other long-term benefits relate to staff severance indemnities and are recorded at their actuarial value, and an executive compensation plan (see Note 18.6).

The actuarial assessment method has been used to calculate the Company’s obligations with respect to staff severance indemnities, which relate to defined benefit plans consisting of days of remuneration per year served at the time of retirement under conditions agreed in the respective agreements established between the Company and its employees.

Under this benefit plan, the Company retains the obligation to pay staff severance indemnities related to retirement, without establishing a separate fund with specific assets, which is referred to as not funded. The discount interest rate of expected flows to be used was 3.68%.

## (a) Benefit payment conditions

The staff severance indemnity benefit relates to remuneration days for years worked for the Company without a limit being imposed in regard of amount of salary or years of service. It applies when employees cease to work for the Company because they are made redundant or in the event of their death. This benefit is applicable up to a maximum age of 65 for men and 60 for women, which are the usual retirement ages according to the Chilean pensions system as established in Decree Law 3,500 of 1980.

## (b) Methodology

The Company’s benefits obligation under IAS 19, Projected Benefit Obligation (PBO) is determined as follows:

To determine the Company’s total liability, we used computer software to develop a mathematical simulation model using the data for each individual employee.

This model considered months as discrete time, i.e., the Company determined the age of each person and his/her salary on a monthly basis according to the growth rate. This information on each person was simulated from the beginning of his/her employment contract or when he/she started earning benefits up to the month in which he/she reaches normal retirement age, generating in each period the possible retirement according to the Company’s turnover rate and the mortality rate according to the age reached. When he/she reaches the retirement age, the employee finishes his/her service for the Company and receives a retirement indemnity.

The methodology followed to determine the accrual for all the employees covered by agreements took account of the turnover rates and the mortality rate RV-2014 established by the CMF to calculate pension-related life insurance reserves in Chile according to the Accumulated Benefit Valuation or Accrued Cost of Benefit Method. This methodology is established in IAS 19 on “Retirement Benefit Costs”.

## 18.4 Post-employment benefit obligations

Our subsidiary SQM NA, together with its employees established a pension plan until 2002 called the “SQM North America Retirement Income Plan”. This obligation is calculated measuring the expected future forecast staff severance indemnity obligation using a net salary gradual rate of restatements for inflation, mortality and turnover assumptions, discounting the resulting amounts at present value using the interest rate defined by the authorities.

Since 2003, SQM North America offers to its employees benefits related to pension plans based on the 401-K system, which do not generate obligations for the Company.



## 18.5 Staff severance indemnities

As of December 31, 2019 and December 31, 2018, severance indemnities calculated at the actuarial value are as follows:

<table><tr><td rowspan="2">Classes of benefits and expenses by employee</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Opening balance</td><td>(28,233)</td><td>(27,445)</td></tr><tr><td>Current cost of service</td><td>(2,880)</td><td>(1,529)</td></tr><tr><td>Interest cost</td><td>(1,661)</td><td>(1,658)</td></tr><tr><td>Actuarial gain/loss</td><td>(2,514)</td><td>(1,617)</td></tr><tr><td>Exchange rate difference</td><td>2,475</td><td>2,710</td></tr><tr><td>Benefits paid during the year</td><td>4,999</td><td>1,306</td></tr><tr><td>Total</td><td>(27,814)</td><td>(28,233)</td></tr></table>

## (a) Actuarial assumptions

The liability recorded for staff severance indemnity is valued at the actuarial value method, using the following actuarial assumptions:

<table><tr><td>Actuarial assumptions</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td><td>Annual/Years</td></tr><tr><td>Mortality rate</td><td>RV - 2014</td><td>RV - 2014</td><td></td></tr><tr><td>Actual annual interest rate</td><td>3.68%</td><td>4.64%</td><td></td></tr><tr><td>Voluntary retirement rate:</td><td></td><td></td><td></td></tr><tr><td>Men</td><td>6.49%</td><td>6.49%</td><td>Annual</td></tr><tr><td>Women</td><td>6.49%</td><td>6.49%</td><td>Annual</td></tr><tr><td>Salary increase</td><td>3.00%</td><td>3.00%</td><td>Annual</td></tr><tr><td>Retirement age:</td><td></td><td></td><td></td></tr><tr><td>Men</td><td>65</td><td>65</td><td>Years</td></tr><tr><td>Women</td><td>60</td><td>60</td><td>Years</td></tr></table>

## (b) Sensitivity analysis of assumptions

As of December 31, 2019 and December 31, 2018, the Company has conducted a sensitivity analysis of the main assumptions of the actuarial calculation, determining the following:

<table><tr><td rowspan="2">Sensitivity analysis as of December 31, 2019</td><td>Effect + 100 basis points</td><td>Effect + 100 basis points</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Discount rate</td><td>(1,796)</td><td>2,021</td></tr><tr><td>Employee turnover rate</td><td>(236)</td><td>263</td></tr></table>

<table><tr><td rowspan="2">Sensitivity analysis as of December 31, 2018</td><td>Effect + 100 basis points</td><td>Effect + 100 basis points</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Discount rate</td><td>(1,807)</td><td>2,033</td></tr><tr><td>Employee turnover rate</td><td>(237)</td><td>265</td></tr></table>

Sensitivity relates to an increase/decrease of 100 basis points.



## 18.6 Executive compensation plan

The Company currently has a compensation plan with the purpose of motivating the Company’s executives and encouraging them to remain with the Company, by granting payments based on the change in the price of SQM’s shares. There is a partial payment of the share benefit program in the event of termination of the contract for causes other than the resignation and application of Article 160 of the Labor Code.

## (a) Plan characteristics

This compensation plan is related to the Company’s performance through the SQM Series B share price (Santiago Stock Exchange).

## (b) Plan participants

A total of 30 Company executives are entitled to this plan, provided that they continue to work for the Company through to the end of 2020. The payment dates, if applicable, will be during the first quarter of 2021.

## (c) Compensation

The compensation payable to each executive is calculated by multiplying:

a) The average price of Series B shares on the Santiago Stock Exchange during the fourth quarter of 2020, at its equivalent amount in dollars (with a maximum amount or limit amount of US$ 54 per share), multiplied

b) By a number equal to the quantity of shares that have been individually assigned to each executive included in the plan.

This compensation plan was approved by the Company’s Board of Directors and its application started on January 1. 2017.

The effect of the plan considers 427,652 shares reflected as a cost of ThUS$ 806 in the results for the period ending December 31, 2019. As of December 31, 2018, the effect of the plan was 476,302 shares, equal to ThUS$ 3,754 recognized as a provision reflected against profit or loss for 2018.

Executed shares during 2019 were 83,609.



## Note 19 Provisions and other non-financial liabilities

## 19.1 Types of provisions

<table><tr><td rowspan="3">Types of provisions</td><td colspan="3">As of December 31, 2019</td><td colspan="3">As of December 31, 2018</td></tr><tr><td>Current</td><td>Non-current</td><td>Total</td><td>Current</td><td>Non-current</td><td>Total</td></tr><tr><td>$ ThUS \)</td><td>$ ThUS \)</td><td>$ ThUS \)</td><td>$ ThUS \)</td><td>ThUS</td><td>$ ThUS \)</td></tr><tr><td>Provision for legal complaints (1)</td><td>13,472</td><td>1,452</td><td>14,924</td><td>11,862</td><td>3,000</td><td>14,862</td></tr><tr><td>Provision for dismantling, restoration and rehabilitation cost (2)</td><td>-</td><td>33,238</td><td>33,238</td><td>-</td><td>28,822</td><td>28,822</td></tr><tr><td>Other provisions (3)</td><td>97,093</td><td>-</td><td>97,093</td><td>94,335</td><td>-</td><td>94,335</td></tr><tr><td>Total</td><td>110,565</td><td>34,690</td><td>145,255</td><td>106,197</td><td>31,822</td><td>138,019</td></tr></table>

(1) These provisions correspond to legal processes that are pending resolution or that have not yet been disbursed. These provisions are mainly related to litigation involving the subsidiaries located in Chile, Brazil and the United States (see note 22.1).

(2) The commitments related to Sernageomin have been incorporated through the issuance of the guarantee for the restoration of the place where the production sites are located.

(3) See Note 19.2



## 19.2 Description of other provisions

<table><tr><td rowspan="2">Current provisions, other short-term provisions</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Rent under Lease contract (1)</td><td>90,320</td><td>84,826</td></tr><tr><td>Provision for additional tax related to foreign loans</td><td>543</td><td>471</td></tr><tr><td>End of agreement bonus</td><td>3,641</td><td>5,129</td></tr><tr><td>Directors&#x27; per diem allowance</td><td>1,802</td><td>2,881</td></tr><tr><td>Miscellaneous provisions</td><td>787</td><td>1,028</td></tr><tr><td>Total</td><td>97,093</td><td>94,335</td></tr></table>

(1) Payment Obligations for the lease contract with CORFO: These correspond to obligations assumed in the Lease Agreement. Part of these obligations are the quarterly lease payments to Corfo, according to SQM Salar's product sales from leased mining properties. Since 2018, another part are the annual contributions by SQM Salar to research and development, to local communities to the Antofagasta Regional Government and to the municipalities of San Pedro de Atacama, María Elena and Antofagasta.

## 19.3 Other non financial liabilities, Current

<table><tr><td rowspan="2">Description of other liabilities</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Tax withholdings</td><td>3,345</td><td>4,782</td></tr><tr><td>VAT payable</td><td>3,465</td><td>7,345</td></tr><tr><td>Guarantees received</td><td>2,641</td><td>2,641</td></tr><tr><td>Accrual for dividend</td><td>68,890</td><td>109,670</td></tr><tr><td>Monthly tax provisional payments</td><td>16,659</td><td>21,001</td></tr><tr><td>Deferred income</td><td>3,033</td><td>18,574</td></tr><tr><td>Withholdings from employees and salaries payable</td><td>4,575</td><td>6,052</td></tr><tr><td>Accrued vacations (1)</td><td>21,686</td><td>20,070</td></tr><tr><td>Other current liabilities</td><td>2,605</td><td>4,489</td></tr><tr><td>Total</td><td>126,899</td><td>194,624</td></tr></table>

(1) Vacation benefit (short-term benefits to employees, current) is in line with the provisions established in Chile’s Labor Code, which indicates that employees with more than a year of service will be entitled to annual vacation for a period of at least fifteen paid business days. The Company provides the benefit of two additional vacation days.



## 19.4 Changes in provisions

<table><tr><td>Description of items that gave rise to variations as of December 31, 2019</td><td>Legal complaints</td><td>Provision for dismantling, restoration and rehabilitation cost</td><td>Other provisions</td><td>Total</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Total provisions, initial balance</td><td>14,862</td><td>28,822</td><td>94,335</td><td>138,019</td></tr><tr><td>Changes</td><td></td><td></td><td></td><td></td></tr><tr><td>Additional provisions</td><td>4,111</td><td>4,416</td><td>150,314</td><td>158,841</td></tr><tr><td>Provision used</td><td>(4,049)</td><td>-</td><td>(147,532)</td><td>(151,581)</td></tr><tr><td>Increase(decrease) in foreign currency exchange</td><td>-</td><td>-</td><td>(24)</td><td>(24)</td></tr><tr><td>others</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Total Increase (decreases)</td><td>62</td><td>4,416</td><td>2,758</td><td>7,236</td></tr><tr><td>Total</td><td>14,924</td><td>33,238</td><td>97,093</td><td>145,255</td></tr></table>

<table><tr><td>Description of items that gave rise to variations as of December 31, 2018</td><td>Legal complaints</td><td>Provision for dismantling, restoration and rehabilitation cost</td><td>Other provisions</td><td>Total</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Total provisions, initial balance</td><td>19,419</td><td>26,954</td><td>47,073</td><td>93,446</td></tr><tr><td>Changes</td><td></td><td></td><td></td><td></td></tr><tr><td>Additional provisions</td><td>1,000</td><td>1,820</td><td>181,244</td><td>184,064</td></tr><tr><td>Provision used</td><td>(5,557)</td><td>-</td><td>(133,949)</td><td>(139,506)</td></tr><tr><td>Increase(decrease) in foreign currency exchange</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>others</td><td>-</td><td>48</td><td>(33)</td><td>15</td></tr><tr><td>Total Increase (decreases)</td><td>(4,557)</td><td>1,868</td><td>47,262</td><td>44,573</td></tr><tr><td>Total</td><td>14,862</td><td>28,822</td><td>94,335</td><td>138,019</td></tr></table>



## Note 20 Disclosures on equity

The detail and movements in the funds of equity accounts are shown in the consolidated statement of changes in equity.

## 20.1 Capital management

The main object of capital management relative to the administration of the Company’s financial debt and equity is to ensure the regular conduct of operations and business continuity in the long term, with the constant intention of maintaining an adequate level of liquidity and in compliance with the financial safeguards established in the debt contracts in force. Within this framework, decisions are made in order to maximize the value of the company.

Capital management must comply with, among others, the limits contemplated in the Financing Policy approved by the Shareholders’ Meeting, which establish a maximum consolidated indebtedness level of 1.5 times the debt to equity ratio. This limit can be exceeded only if the Company’s management has first obtained express approval at an Extraordinary Shareholders’ Meeting.

In addition, capital management should consider that with respect to Series H and Series O Bonds, if the Indebtedness Level (as this term is defined in the respective issuance contracts) exceeds 1.2 times (provided that this does not exceed 1.44 times), the Company must offer bondholders of these series the voluntary and individual option for early redemption of these bonds at par value. As a consequence of the IFRS 16 becoming effective and being implemented in these financial statements, the Indebtedness ratio for the fourth quarter of 2019 reached a proportion of 1.19.

The Company’s management controls capital management based on the following ratios:

<table><tr><td>Capital Management</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td><td>Description (1)</td><td>Calculation (1)</td></tr><tr><td>Net Financial Debt (ThUSS)</td><td>719,809</td><td>471,755</td><td>Financial Debt - Financial Resources</td><td>Other current Financial Liabilities + Other Non-Current Financial Liabilities - Cash and Cash Equivalents - Other Current Financial Assets - Hedging Assets, non-current</td></tr><tr><td>Liquidity</td><td>3.45</td><td>4.32</td><td>Current Assets divided by Current Liabilities</td><td>Total Current Assets / Total Current Liabilities</td></tr><tr><td>Net Debt / Capitalization ROE</td><td>0.25</td><td>0.18</td><td>Net Financial Debt divided by Total Equity</td><td>Net financial debt / Total Equity</td></tr><tr><td></td><td>13.154%</td><td>20.7%</td><td>Profit for the year divided by Total Equity</td><td>LTM(2) Profit for the year / Equity</td></tr><tr><td>Adjusted EBITDA (ThUSS)</td><td>645,142</td><td>855,652</td><td>Adjusted EBITDA</td><td>Profit for the year + Depreciation and Amortization Expenses + Finance Costs + Income Tax - Other income and Share of profit of associates and joint ventures + Other expenses - Finance income - Currency differences</td></tr><tr><td>EBITDA (MUSS)</td><td>669,831</td><td>902,450</td><td>EBITDA</td><td>Profit for the year + Depreciation and Amortization Expenses + Finance Costs + Income Tax</td></tr><tr><td>ROA</td><td>12.76%</td><td>20.31%</td><td>Adjusted EBITDA - Depreciation divided by Total Assets net of financial resources less related parties&#x27; investments</td><td>(LTM Gross Profit - Administrative Expenses) / (Total Assets - Cash and Cash Equivalents - Other Current Financial Assets - Other Non-Current Financial Assets - Equity-accounted Investments)</td></tr><tr><td>Indebtedness</td><td>1.19</td><td>1.00</td><td>Total Liabilities on Equity</td><td>Total Liabilities / Total Equity</td></tr><tr><td>Indebtedness without IFRS 16</td><td>1.18</td><td>1.00</td><td>Total Liabilities less IFRS 16 liabilities on Equity</td><td>Total Liabilities - IFRS 16 liabilities / Total Equity</td></tr></table>

(1) Assumes the absolute value of the accounting records with the exception of exchange differences.



The Company’s capital requirements change according to variables such as working capital needs, new investment financing and dividends, among others. The SQM Group manages its capital structure and makes adjustments based on the predominant economic conditions so as to mitigate the risks associated with adverse market conditions and take advantage of the opportunities there may be to improve the liquidity position of the SQM Group.

There have been no changes in the capital management objectives or policy within the years reported in this document. No breaches of external requirements of capital imposed have been recorded.

## 20.2 Disclosures on preferred share capital

Issued share capital is divided into 142,819,552 Series "A" shares and 120,376,972 Series "B" shares. All such shares are nominative, have no par value and are fully issued, subscribed and paid.

Series B shares may not exceed 50% of the total issued, subscribed and paid-in shares of the Company and have a limited voting right, in that all of them can only elect one director of the Company, regardless of their equity interest and preferences:

(a) require the calling of an Ordinary or Extraordinary Shareholders' Meeting when so requested by Series B shareholders representing at least 5% of the issued shares thereof; and

(b) require the calling of an extraordinary meeting of the board of directors, without the president being able to qualify the need for such a request, when so requested by the director who has been elected by the shareholders of said Series B.

The limitation and preferences of Series B shares have a duration of 50 consecutive and continuous years as of June 3, 1993.

The Series A shares have the preference of being able to exclude the director elected by the Series B shareholders in the voting process in which the president of the board of directors and of the Company must be elected and which follows the one in which the tie that allows such exclusion resulted.

The preference of the Series A shares will have a term of 50 consecutive and continuous years as of June 3, 1993. The form of the titles of the shares, their issuance, exchange, disablement, loss, replacement, assignment and other circumstances thereof shall be governed by the provisions of Law No, 18,046 and its regulations.

At December 31, 2019 and December 31, 2018, the Group does not hold shares of the Parent Company either directly or through its investees.



Detail of capital classes in shares:

As of December 31, 2019 and December 31, 2018, the Company has not placed any new shares issues on the market

<table><tr><td rowspan="2">Type of capital in preferred shares</td><td colspan="2">As of December 31, 2019</td><td colspan="2">As of December 31, 2018</td></tr><tr><td>Series A</td><td>Series B</td><td>Series A</td><td>Series B</td></tr><tr><td>Description of type of capital in preferred shares</td><td></td><td></td><td></td><td></td></tr><tr><td>Number of authorized shares</td><td>142,819,552</td><td>120,376,972</td><td>142,819,552</td><td>120,376,972</td></tr><tr><td>Number of fully subscribed and paid shares</td><td>142,819,552</td><td>120,376,972</td><td>142,819,552</td><td>120,376,972</td></tr><tr><td>Number of subscribed, partially paid shares</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Par value of shares in US$</td><td>0.9435</td><td>2.8464</td><td>0.9435</td><td>2.8464</td></tr><tr><td>Increase (decrease) in the number of current shares</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Number of current shares</td><td>142,819,552</td><td>120,376,972</td><td>142,819,552</td><td>120,376,972</td></tr><tr><td>Number of shares owned by the entity or its subsidiaries or associates</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Number of shares whose issuance is reserved due to the existence of options or agreements to dispose shares</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Capital amount in shares THUS$</td><td>134,750</td><td>342,636</td><td>134,750</td><td>342,636</td></tr><tr><td>Amount of premium issuance THUS$</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Amount of reserves THUS$</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Total number of subscribed shares</td><td>142,819,552</td><td>120,376,972</td><td>142,819,552</td><td>120,376,972</td></tr></table>

## 20.3 Disclosures on reserves in Equity

As of December 31, 2019 and December 31, 2018, this caption comprises the following:

<table><tr><td rowspan="2">Disclosures on reserves un Equity</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Reserve for currency exchange conversion</td><td>(25,745)</td><td>(26,307)</td></tr><tr><td>Reserve for cash flow hedges</td><td>7,196</td><td>7,971</td></tr><tr><td>Reserve for gains and losses from financial assets measured at fair value through other comprehensive income</td><td>(270)</td><td>(1,111)</td></tr><tr><td>Reserve for actuarial gains or losses in defined benefit plans</td><td>(9,490)</td><td>(6,884)</td></tr><tr><td>Other reserves</td><td>14,086</td><td>11,332</td></tr><tr><td>Total</td><td>(14,223)</td><td>(14,999)</td></tr></table>

## Reserves for foreign currency translation differences

This balance reflects retained earnings for changes in the exchange rate when converting the financial statements of subsidiaries whose functional currency is that of each company’s origin country and the presentation currency is the US dollar.

## Reserve for cash flow hedges

The Company maintains, as hedge instruments, financial derivatives related to obligations with the public issued in UF and Chilean pesos, Changes from the fair value of derivatives designated and classified as hedges are recognized under this classification.

Reserve for gains and losses from financial assets measured at fair value through other comprehensive income

This caption includes investments in shares where the Company has no significant influence and these have accordingly been measured at fair value through equity. In the event that such equity instruments are fully or partially disposed of, the proportional accumulated effect of accumulated fair value will be transferred to profit or loss.



## Reserve for actuarial gains or losses in defined benefit plans

For domestic subsidiaries the effects of changes in assumptions are considered, mainly changes in the discount rate.

The subsidiary SQM North America has established pension plans for its retired employees that are calculated by measuring the projected obligation of staff severance indemnities using a net salary progressive rate net of adjustments to inflation, mortality and turnover assumptions, deducting the resulting amounts at present value using a 4% interest rate for 2019.



Movements in other reserves and changes in interest were as follows:

<table><tr><td rowspan="3">Movements</td><td colspan="2">Foreign currency translation difference</td><td colspan="2">Reserve for cash flow hedges</td><td colspan="2">Reserve for actuarial gains and losses from defined benefit plans</td><td colspan="2">Reserve for gains (losses) from financial assets measured at fair value through other comprehensive income</td><td colspan="2">Other reserves</td><td colspan="2">Total reserves</td></tr><tr><td colspan="2"></td><td colspan="2"></td><td colspan="2"></td><td colspan="2"></td><td rowspan="2">Before taxes</td><td rowspan="2">Reserves</td><td rowspan="2">Deferred taxes</td><td rowspan="2">Total reserves</td></tr><tr><td>Before taxes</td><td>Before taxes</td><td>Tax</td><td>Before taxes</td><td>Deferred taxes</td><td>Before taxes</td><td>Deferred taxes</td><td>Before taxes</td><td>Reserves</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS$</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS$</td></tr><tr><td>Opening balance as of January 1, 2018</td><td>(24,913)</td><td>2,248</td><td>-</td><td>(6,847)</td><td>894</td><td>4,787</td><td>(1,850)</td><td>11,332</td><td>(13,393)</td><td>(956)</td><td>(14,349)</td><td></td></tr><tr><td>Increase</td><td>6,542</td><td>14,794</td><td>-</td><td>674</td><td>(133)</td><td>294</td><td>(79)</td><td>-</td><td>22,304</td><td>(212)</td><td>22,092</td><td></td></tr><tr><td>Decrease</td><td>(7,936)</td><td>(9,071)</td><td>-</td><td>(2,003)</td><td>531</td><td>(5,841)</td><td>1,578</td><td>-</td><td>(24,851)</td><td>2,109</td><td>(22,742)</td><td></td></tr><tr><td>Closing balance as of December 31, 2018</td><td>(26,307)</td><td>7,971</td><td>-</td><td>(8,176)</td><td>1,292</td><td>(760)</td><td>(351)</td><td>11,332</td><td>(15,940)</td><td>941</td><td>(14,999)</td><td></td></tr><tr><td>Increase</td><td>1,824</td><td>8,628</td><td>(2,683)</td><td>-</td><td>-</td><td>1,570</td><td>(424)</td><td>3,093</td><td>15,115</td><td>(3,107)</td><td>12,008</td><td></td></tr><tr><td>Decrease</td><td>(1,262)</td><td>(6,720)</td><td>-</td><td>(3,306)</td><td>700</td><td>(418)</td><td>113</td><td>(339)</td><td>(12,045)</td><td>813</td><td>(11,232)</td><td></td></tr><tr><td>Closing balance as of December 31, 2019</td><td>(25,745)</td><td>9,879</td><td>(2,683)</td><td>(11,482)</td><td>1,992</td><td>392</td><td>(662)</td><td>14,086</td><td>(12,870)</td><td>(1,353)</td><td>(14,223)</td><td></td></tr></table>



## Other reserves

This caption corresponds to the legal reserves reported in the individual financial statements of the subsidiaries and Associates that are mentioned below and that have been recognized in SQM’s equity through the application of the equity method.

<table><tr><td rowspan="2">Subsidiary - Associate</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>SQM Iberian S.A. (1)</td><td>9,464</td><td>9,464</td></tr><tr><td>SQM Europe NV</td><td>1,957</td><td>1,957</td></tr><tr><td>Soquimich European holding B.V.</td><td>828</td><td>828</td></tr><tr><td>Abu Dhabi Fertilizer Industries WWL</td><td>455</td><td>455</td></tr><tr><td>Doktor Tarsa Tarim Sanayi AS</td><td>305</td><td>305</td></tr><tr><td>Kore Potash PLC</td><td>2,754</td><td>-</td></tr><tr><td>Total</td><td>15,763</td><td>13,009</td></tr><tr><td>Corresponds to the acquisition of the subsidiary SQM Iberian S.A., which was already under Company ownership at the acquisition date (IAS 27 R).</td><td>(1,677)</td><td>(1,677)</td></tr><tr><td>Total Other reserves</td><td>14,086</td><td>11,332</td></tr></table>

(1) In the case of SQM Iberian S.A., the balance corresponds to the results obtained in the previous financial year which are presented as forming part of other reserves because of local regulations

## 20.4 Dividend policies

As required by Article 79 of the Chilean Companies Act, unless otherwise decided by unanimous vote of the holders of issued and subscribed shares, we must distribute a cash dividend in an amount equal to at least 30% of our consolidated profit for the year ended as of December 31, unless and except to the extent it has a deficit in retained earnings (losses not absorbed in prior years).



## Dividend policy for commercial year 2019

The Company has defined the following dividend policy:

a) Distribute and pay, as a final dividend and in favor of the respective shareholders, a percentage of the net income that shall be determined per the following financial parameters:

(I) 100% of the profit for 2019 if all the following financial parameters are met: (a) “all current assets” divided by “all current liabilities” is equal to or greater than 2.5 times, and (b) the sum of “all current liabilities” and “all non-current liabilities”, less “cash equivalents”, less “other current financial assets”, all of the above divided by “total equity” in equal or less than 0.8 times.

(II) 80% of the profit for 2019 if all the following financial parameters are met: (a) “all current assets” divided by “all current liabilities” is equal to or greater than 2.0 times, and (b) the sum of “all current liabilities” and “all non-current liabilities”, less “cash equivalents”, less “other current financial assets”, all of the above divided by “total equity” in equal or less than 0.9 times.

(III) 60% of the profit for 2019 if all the following financial parameters are met: (a) “all current assets” divided by “all current liabilities” is equal to or greater than 1.5 times, and (b) the sum of “all current liabilities” and “all non-current liabilities”, less “cash equivalents”, less “other current financial assets”, all of the above divided by “total equity” in equal or less than 1.0 times.

If none of the foregoing financial parameters are met, the Company shall distribute and pay, as a final dividend, and in favor of the respective shareholders, 50% of the 2019 net income.

b) Distribute and pay, if possible and during 2019, three interim dividends that will be charged against the aforementioned final dividend. These interim dividends shall likely be paid during the month following the approval of the March, June, and September 2019 interim financial statements, respectively. Its amounts shall be calculated as follows:

(i) For the interim dividends that will be charged to the accumulated net income reflected in the March 2019 interim financial statements, the percentage distributed shall be determined per the financial parameters expressed in letter a) above.

(ii) For the interim dividends that will be charged to the accumulated net income reflected in the June 2019 interim financial statements, the percentage distributed shall be determined per the financial parameters expressed in letter a) above, discounting the total amount of interim dividends previously distributed during 2019.

(iii) For the interim dividends that will be charged to the accumulated net income reflected in the September 2019 interim financial statements, the percentage distributed shall be determined per the financial parameters expressed in letter a) above, discounting the total amount of interim dividends previously distributed during 2019.

c) The amount of the interim dividends mentioned above may vary, pursuant to the information available to the Board of Directors on the date on which it agrees to the distribution of said dividends given that the dividend will not materially or negatively affect SQM’s capacity to impact its investments, fulfill its liabilities, or in general, comply with the investment and finance policy approved at the ordinary shareholders’ meeting.

d) At the ordinary shareholders meeting that will be held in 2020, the Board of Directors shall propose a final dividend pursuant to the financial parameters expressed in letter a) above, discounting the total amount of the interim dividends previously distributed during 2019.



e) If there is an excess of net income in 2019, this may be retained and assigned or allocated for financing its own operations, to one or more investment projects of the Company, notwithstanding a future distribution of special dividends charged to the accumulated net income previously approved at the shareholders' meeting, or the possible and future capitalization of all or part of the latter.

f) he payment of additional dividends is not considered.

The dividend policy described above corresponds to the intention of the Board of Directors, and the compliance of it shall depend on the net income that the Company ultimately obtains, as well as the results of periodic projections that could impact the Company, or to the existence of determined conditions that may affect it, as applicable. If the dividend policy exposed by the Board of Directors suffers a substantial change, the Company must communicate it as an essential fact.

## 20.5 Interim and provisional dividends

The ordinary shareholders’ meeting held on April 25, 2019, agreed to distribute and pay 100% of the distributable net profit obtained by the Company during the 2018 fiscal year, as dividend. Consequently, in May 2019, the Company paid a definitive dividend of US$ 1.67111 per share as distributable net profit obtained during the 2018 fiscal year. An amount of US$ 1.25837 per share was subtracted from this amount, as it had already been paid as interim dividend in 2018.

On May 22, 2019, the Board agreed to pay an interim dividend equivalent to US$ 0.30598 per share, charged to the Company's net income for 2019. This amount was paid in Chilean pesos at the official exchange rate to the Dollar published in the Official Gazette on May 29, 2019.

On August 21, 2019, the Board paid a provisional dividend equivalent to US$ 0.26669 per share with a charge to Company earnings for 2019. Such amount was paid in its equivalent in Chilean pesos, according to the observed U.S. dollar exchange rate published in the Official Gazette on August 30, 2019.

On November 20, 2019, the Board of Directors agreed to pay an interim dividend equivalent to US $ 0.22987 per share, to be charged to the Company's 2019 earnings. This amount was paid in its Pesos equivalent according to the value of the Observed Dollar published in the Official Gazette of November 29, 2019.



## 20.6 Potential and provisional dividends

Dividends discounted from equity from December 2019 and January to December 2018 were the following:

<table><tr><td rowspan="2">Dividends</td><td>Fort the year ended 31, 2019</td><td>Fort the year ended 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Ajay SQM Chile S.A. Dividends</td><td>882</td><td>823</td></tr><tr><td>Soquimich Comercial S.A. Potential Dividend</td><td>3,936</td><td>7,872</td></tr><tr><td>Soquimich Comercial S.A. Payable Dividend</td><td>1,999</td><td>1,038</td></tr><tr><td>Non-controlling interests</td><td>6,817</td><td>9,733</td></tr><tr><td>Interim dividend</td><td>211,224</td><td>331,199</td></tr><tr><td>Potential dividend</td><td>-</td><td>100,000</td></tr><tr><td>Dividends payable</td><td>66,891</td><td>108,631</td></tr><tr><td>Owners of the Parent</td><td>278,115</td><td>539,83</td></tr><tr><td>Dividends discounted from equity for the period</td><td>284,932</td><td>549,563</td></tr></table>



## Note 21 Earnings per share

Basic earnings per share are calculated by dividing net income attributable to the Company’s shareholders by the weighted average of the number of shares in circulation during that period.

As expressed, earnings per share are detailed as follows:

<table><tr><td rowspan="2">Basic earnings per share</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Earnings (losses) attributable to owners of the parent</td><td>278,115</td><td>439,830</td></tr></table>

<table><tr><td rowspan="2">Basic earnings per share</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>Units</td><td>Units</td></tr><tr><td>Number of common shares in circulation</td><td>263,196,524</td><td>263,196,524</td></tr><tr><td>Basic earnings per share (US$ per share)</td><td>1.0567</td><td>1.6711</td></tr></table>

The Company has not made any operations with a potential dilutive effect that assumes diluted earnings per share are different from the basic earnings per share.



## Note 22 Contingencies and restrictions

In accordance with note 19.1, the Company has only registered a provision for those lawsuits in which there is a probability that the judgments will be unfavorable to the Company, The Company is party to the following lawsuits and other relevant legal actions:

## 22.1 Lawsuits and other relevant events

(a) Plaintiff : City of Pomona California, USA

Defendants : SQM North America Corporation

Date : December 2010

Court : United States District Court Central District of California

Reason : Payment of expenses and other amounts related to the treatment of groundwater to allow for its consumption by removing the existing perchlorate in such groundwater that allegedly comes from Chilean fertilizers.

Status : On May 17, 2018, district judge Gary Klausner sentenced in favor of SQM NA following the verdict of the jury, On February 6, 2020, the court of appeals of the 9th circuit of United States ordered a retrial before the District Court.

Nominal value : ~ ThUS$ 32,000

(b) Plaintiff : City of Lindsay, California, USA

Defendants : SQM NA and the Company (still not noticed)

Date : December 2010

Court : United States District Court Eastern District of California.

Reason : Payment of expenses and other amounts related to the treatment of groundwater to allow for its consumption by removing the existing perchlorate in such groundwater that allegedly comes from Chilean fertilizers.

Status : Filing of the case, processing suspended.

Nominal value : Not possible to determine.

(c) Plaintiff : H&V Van Mele N.V.

Defendants : NV Euroports, SQM Europe N.V. y and its insurance companies

Date : July 2013

Court : Commercial Court

Reason : Alleged indirect responsibility for the absence of adequate specifications for the SOP–WS by the Belgian distributor

Status : Sentencing against NV Euroports and subsidy SQM Europe N.V., for EUR 206,675.91, Appeal presented in November 2017

Nominal value : ~ ThUS$ 430



(d) Plaintiff : Carlos Aravena Carrizo et al.
Defendants : SQM Nitratos S.A. and its insurers
Date : May 2014
Court : 18th Civil Court Santiago
Reason : Lawsuit seeking compensation for damages for alleged civil liability under tort as a result of an explosion that occurred during 2010 near Baquedano, causing the death of 6 employees
Status : On May 7, 2019 2019 The 18th Civil Court of Santiago rejected the lawsuit. The case is before the Santiago Court of Appeals, which will hear the plaintiffs' appeal
Nominal value : ~ ThUS$ 1,235

(e) Plaintiff : SQM Salar S.A. and the Company
Defendants : Seguros Generales Suramericana S.A. (formerly - RSA Seguros Chile S.A.)
Date : August 29, 2016.
Court : Arbitration award in accordance with the arbitration rules established by the CAM
Reason : Complaint for forced compliance and collection of indemnification for insurance claim of February 7 and 8, 2013
Status : Evidence stage
Nominal value : ~ ThUS$ 20,658

(f) Plaintiff : Tyne and Wear Pension Fund represented by el Council of the Borough of South Tyneside acting as Lead Plaintiff
Defendants : The Company
Date : January 2016
Court : United States District Court – Southern District of New York
Reason : Alleged damage to ADS holders of the Company resulting from alleged non-compliance with the securities regulations in the United States by the Company
Status : Initial stage of disclosure of background information
Nominal value : Not determined



(g) Plaintiff : Ernesto Saldaña González et al
Defendants : SQM Salar S.A., SQM Industrial S.A. and their insurance companies
Date : May 2016
Court : 13 \( ^{th} \)  Civil Court of Santiago
Reason : Lawsuit seeking compensation for damages for alleged civil liability under tort law arising from the accident that occurred in July 2014 in the María Elena location
Status : On March 6, 2019, the ruling in first instance was passed, dismissing the claim. The case is currently before the Santiago Court of Appeals, which will hear the plaintiffs' appeal.
Nominal value : ~ ThUS$ 515

(h) Plaintiff : Transportes Buen Destino S.A.
Defendants : SQM Salar.
Date : January 24, 2018
Court : Arbitration award in accordance with the arbitration rules established by the CAM
Reason : Discrepancies generated in the implementation of the following contracts entered into between TBD and SQM Salar: (i) lithium brine transportation; and (ii) salt transportation
Status : Pending evidentiary stage.
Nominal value : ~ ThUS$ 3,019

(i) Plaintiff : Atacameña de Peine Indigenous Community, Atacameña de Camar Indigenous Community and the Consejo de Pueblos Atacameños.
Defendants : SMA. SQM Salar has intervened as an independent third party.
Date : January 30, 2019
Court : 1st Environmental Court
Reason : Declare the SMA's decision illegal, which approved the PdC submitted by SQM Salar.
Status : On December 26, 2019, the First Environmental Court of Antofagasta partially accepted the claim presented by the indigenous communities, rendering null and void the SMA resolution that approved the PdC and suspended the sanctions process against SQM Salar. On January 16, 2020, motions for cassation on grounds of form and substance, filed by the Company, were declared admissible and these will be addressed and resolved by the Supreme Court.
Nominal value : Not determined

(j) Plaintiff : Quillagua Aymara Indigenous Community and Quechua de Huatacondo Indigenous Community
Defendants : SMA
Date : March 22, 2019
Court : First Environmental Court of Santiago
Reason : Declare the SMA's decision illegal, which approved the PdC submitted by the Company
Status : Pending the case hearing
Nominal value : Not determined

(k) Plaintiff : Congresspersons Claudia Nathalie Mix Jiménez, Gael Fernanda Yeomans
Araya, Camila Ruslay Rojas Valderrama et al.
Defendants : CORFO. The entity has intervened as an independent third party



Date : September 6, 2018

Court : Special Magistrate, Mr. Alejandro Madrid Crohare

Reason : To render null and void the contract for the Salar de Atacama Project signed between CORFO and SQM Salar.

Status : Discussion stage

Nominal value : Not determined

(1) Plaintiff : Danilo Andrés Araya Rojas et al.

Defendants : FPC Ingeniería y Construcción SpA, SQM S.A. and its insurers
Date : May, 2019

Court : 19° Civil Court of Santiago

Reason : Claim seeking compensation for damages, for extracontractual liability resulting from the traffic accident occurring on March 5, 2018 on Route 5, kilometer 1713, near Pozo Almonte, involving an overturned pick-up truck owned by FPC resulting in the death of its two occupants, both employees of FPC, one of which was father of the four claimants. At the time the accident occurred, the employees were heading towards their homes on the SQM site in Nueva Victoria (traffic accident). The four children of one of the deceased employees are the claimants in this case, compensation for moral damages

Status : Discussion stage

Nominal value : ~ ThUS$ 1,194.

(m) Plaintiff : Servicios Logísticos Integrales Inversol SpA

Defendants : SQM Salar

Date : June 24, 2019.

Court : Arbitration in accordance with the rules established by CAM

Reason : Controversies originating in the implementation of the salt transportation contract

Status : Discussion stage

Nominal value : ~ ThUS$ 7,029

(n) Plaintiff : Fennix Industrial SpA

Defendants : SQM Salar

Date : April 17, 2019.

Court : First Civil Court of Concepción.

Reason : Disputes arising from the execution of civil works and electromechanical assembly contracts.

Status : Pending ruling on motion to dismiss based on lack of jurisdiction.

Nominal value : ~ ThUS$ 770

(o) Plaintiff Fennix Industrial SpA

Defendants SQM Salar and other

Date May 8, 2019.

Court Criminal Court of San Pedro de la Paz

Reason : Alleged misappropriation of funds - controversies originating from contract execution for civil works and electromechanical assembly

Status Research stage.

Nominal value ~ThUS$ 436



<table><tr><td>(p)</td><td>Plaintiff</td><td>Arrigoni Ingeniería y construcción S.A.</td></tr><tr><td></td><td>Defendants</td><td>SQM Salar</td></tr><tr><td></td><td>Date</td><td>November 21, 2019</td></tr><tr><td></td><td>Court</td><td>Arbitration award in accordance with the arbitration rules established by the CAM</td></tr><tr><td></td><td>Reason</td><td>Request to declare the end of Works Contract No. SC 9500002949, named “Expansion of Lithium Carbonate Plant Phase II” dated April 2, 2018</td></tr><tr><td></td><td>Status</td><td>Discussion stage</td></tr><tr><td></td><td>Nominal value</td><td>ThUS$ 13,054</td></tr></table>

The Company and its subsidiaries have been involved and will probably continue to be involved either as plaintiffs or defendants in certain judicial proceedings that have been and will be heard by the arbitration or ordinary courts of justice that will make the final decision. Those proceedings that are regulated by the appropriate legal regulations are intended to exercise or oppose certain actions or exceptions related to certain mining claims either granted or to be granted and that do not or will not affect in an essential manner the development of the Company and its subsidiaries.

Soquinich Comercial S.A. has been involved and will probably continue being involved either as plaintiff or defendant in certain judicial proceedings through which it intends to collect and receive the amounts owed, the total nominal value of which is approximately US$ 1.2 million.

The Company and its subsidiaries have made efforts and continues making efforts to obtain payment of certain amounts that are still owed to the Company due to its activities. Such amounts will continue to be required using judicial or non-judicial means by the plaintiffs, and the actions and exercise related to these are currently in full force and effect.

The Company and its subsidiaries have received no legal notice on lawsuits other than those indicated above, which exceed US$ 0.2 million.



## 22.2 Restrictions to management or financial limits

Contracts that subscribed the issuance of bonuses in the local and international market require the Company to comply with the following level of consolidated financial indicators, calculated for the last 12 month period:

Maintain a borrowing ratio less than 1.44 for the Series H bond and Series O bond.

Furthermore, both bonds establish that if the borrowing ratio (as this term is defined in the respective issuance contracts) exceeds 1.2, (provided that this does not exceed than 1.44 times), the bondholders can voluntarily and individually choose to redeem these bonds early at par value. The Indebtedness ratio for the fourth quarter of 2019 reached a proportion of 1.19.

As of December 31, 2019, the above-mentioned financial indicator has the following values:

<table><tr><td>Indicator</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>Leverage</td><td>1.19</td><td>1.00</td></tr></table>

Bond issue agreements issued abroad require the Company to neither merge nor dispose of the whole or a substantial part of its assets, unless all the following conditions are met: (i) the legal successor company is an entity subject to either Chilean or United States law, and assumes SQM S.A.'s obligations under a complimentary contract, (ii) the Issuer does not fail to comply immediately after the merger or disposal, and (iii) the Issuer delivers a legal opinion stating that the merger or disposal and the complimentary contract meet the requirements described in the original contract.

In addition, SQM S.A. is committed to disclosing financial information on quarterly basis.

The Company and its subsidiaries have complied and are fully complying with all the aforementioned limitations, restrictions and obligations.

## 22.3 Environmental contingencies

On June 6, 2016, the “SMA” filed charges against the Company with respect to the Pampa Hermosa project for possible noncompliance with RCA 890/2010.

This relates to charges related to certain variables of the follow-up plan and the implementation of a mitigation measure included in the respective environmental impact assessment. The Company has presented for the approval of SMA a compliance program detailing the actions and commitments it will carry out to address the SMA’s objections.

On June 29, 2017, the SMA rejected the compliance program presented by the Company, On July 10, 2017, the Company presented its rebuttals to the charges made by the SMA, On August 21, 2018, the Second Environmental Court accepted the Company’s claim, ordering the SMA to take the procedure back to the stage prior to their resolution rejecting the compliance program presented by the Company.

The SMA approved SQM’s proposed compliance program in its resolution dated January 26, 2019, and this program is currently being executed. On March 22, 2019, the indigenous communities of Quillagua and Huatacondo filed a complaint against the resolution that approved the compliance program before the First Environmental Court of Antofagasta (R-21-2019). This process was suspended on May 16, 2019.

The SMA issued a resolution dated November 28, 2016, rectified by a resolution dated December 23, 2016, which filed charges against SQM Salar for brine extraction in excess of authorized amounts, progressive impairment of the vitality of carob trees, providing incomplete information, amending variables, and other charges.

SQM Salar S.A. presented a compliance program that was accepted by the SMA. On December 26, 2019, the Environmental Court of Antofagasta rendered null and void the SMA ruling that approved the program and the SMA and SQM Salar presented motions for cassation against this verdict. These were accepted for processing and submitted



to the Supreme Court and are currently pending final ruling. Although the ruling approving the compliance program has been rendered null and void, SQM Salar continues to comply with the measures it agreed to under this program. Once the Supreme Court resolves these issues, approval of the compliance program may be confirmed, a new program may be presented that considers other measures in agreement with the SMA or the sanctions process may be reinstated. This latter event may consider the application of fines up to US$9 million, temporary or permanent closure of facilities and in extreme circumstances, revocation of the respective environmental permit.

## 22.4 Tax Contingencies

On August 26, 2016, SQM Salar filed a tax claim before the Third Tax and Customs Court of the Metropolitan Region against settlements 169, 170, 171 and 172, which extend the application of specific mining tax to lithium exploitation. The disputed amount is approximately US$17.8 million. On November 28, 2018, the Third Tax and Customs Court rejected the claim, and the case was transferred to the Santiago Court of Appeals, following an appeal filed by SQM Salar.

On March 24, 2017, SQM Salar filed with the Third Tax and Customs Court of the Metropolitan Region a tax claim against tax assessment No. 207 of 2016 and ruling No. 156 of 2016, both issued by the Chilean IRS, which seek to expand application of the specific tax on mining activities to include lithium exploitation for tax years 2015 and 2016. The amount involved is approximately US$14.4 million. On November 28, 2018, the Third Tax and Customs Court accepted SQM Salar’s claim for US$ 7.0 million corresponding to the overcharge made by the SII and rejected the remainder of the claim. The case is in the Santiago Court of Appeals, based on the appeal filed by SQM Salar.

These amounts are classified as taxes for current assets, non-current, as of December 31, 2018 and the same as of December 31, 2019.

The amount in dispute is US$ 32.2 million, and approximately US$ 25.2 million of this sum is the potential specific mining tax associated with lithium, whereas US$7.0 million is an excess charge by the SII regarding this latter value, the internal revenue service (SII) has acknowledged the excessive charge of US$5.8 million, and a request has been made on October 17, 2019 for it to be returned, The difference of US$ 1.2 million for the lower first category tax rate plus interests and fines will be reinstated at the end of the trial.

The SII has not settled differences with respect to specific mining taxes for 2016, 2017, 2018 and 2019. the current business year. As of the date of these financial statements, the Company has not made provisions for these potential differences.

If the Chilean IRS uses criteria similar to that used in previous years, it may issue an assessment in the future for the 2016, 2017, 2018 y 2019 financial years. It is reasonable to expect that should these assessments for the period 2016 through the fourth quarter of 2019 be issued, the value would be approximately US$ 69 million (without considering potential interest and fines).

The company continues to undertake all legal efforts to actively and decidedly defend its interests.

## 22.5 Contingencies regarding the Changes to the Contracts with Corfo:

On September 6, 2018, representatives Claudia Nathalie Mix Jiménez, Gael Fernanda Yeomans Araya and Camila Ruslay Rojas Valderrama and the Poder Ciudadano political party filed an annulment suit against Corfo, which requested that the Contract for the Salar de Atacama Project between Corfo and the Companies be annulled. The Companies have taken part of the process as interested third parties.

In the event that the annulment claim is approved for the Salar de Atacama Project Contract, SQM Salar may be prevented from exploit the mining claims in the Salar de Atacama that it has leased from Corfo.



## 22.6 Contingencies related to the Class Action lawsuit

Since October 2015, a consolidated class action lawsuit has been pending against the Company before the District Court for the Southern District of New York of the United States. The consolidated lawsuit alleges that certain statements made by the Company between June 30, 2010, and June 18, 2015, mainly in documents filed with the SEC and in Company press releases, were materially false and this constitutes a violation of Section 10 (b) of the Securities Exchange Act and of the correlative Standard 10b-5. Specifically, the consolidated lawsuit challenges certain statements issued by the Company associated with its compliance with or implementation of the laws and regulations that regulate it, the effectiveness of its internal controls, the adoption of a code of ethics consistent with SEC requirements, of its income or revenue and taxes paid, and of the applicable accounting standards. The primary plaintiff seeks compensation for the class in a yet undetermined amount for economic losses occurring as a result of the questioned statements. On January 10, 2018, the primary plaintiff filed a motion to certify a class composed of all people or entities who purchased ADSs in the Company between June 30, 2010, and March 18, 2015, and this motion is still pending with the court.

Although the Company expects to actively and decisively defend its position, the outcome of this litigation cannot be predicted.

## 22.7 Restricted or pledged cash

The subsidiary Isapre Norte Grande Ltda., in compliance with the provisions established by the Chilean Superintendence of Healthcare, which regulates the running of pension-related health institutions, maintains a guarantee in financial instruments delivered in deposits, custody and administration to Banco de Chile.

This guarantee, according to the regulations issued by the Chilean Superintendence of Healthcare is equivalent to the total amount owed to its members and medical providers, Banco de Chile reports the present value of the guarantee to the Chilean Superintendence of Healthcare and Isapre Norte Grande Ltda on a daily basis. As of December 31, 2019, the guarantee amounts to ThUS$ 551.

## 22.8 Securities obtained from third parties

The main security received (exceeding ThUS$ 100) from third parties to guarantee Soquimich Comercial S.A. their compliance with obligations in contracts of commercial mandates for the distribution and sale of fertilizers amounted to ThUS$ 9,611 and ThUS$ 9,423 on December 31, 2019 and December 31, 2018 respectively; which is detailed as follows:

<table><tr><td rowspan="2">Grantor</td><td rowspan="2">Relationship</td><td>As of December 31, 2019</td><td>As of December 31, 2019</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Ferosor Agrícola S.A.</td><td>Unrelated Third party</td><td>5,372</td><td>3,598</td></tr><tr><td>Tattersall Agroinsumos S.A.</td><td>Unrelated Third party</td><td>2,000</td><td>2,000</td></tr><tr><td>Contador Frutos S.A.</td><td>Unrelated Third party</td><td>-</td><td>1,587</td></tr><tr><td>Covepa SPA</td><td>Unrelated Third party</td><td>671</td><td>720</td></tr><tr><td>Johannes Epple Davanzo</td><td>Unrelated Third party</td><td>300</td><td>321</td></tr><tr><td>Hortofrutícola La Serena</td><td>Unrelated Third party</td><td>282</td><td>294</td></tr><tr><td>Com. Serv Johannes Epple Davanz</td><td>Unrelated Third party</td><td>269</td><td>-</td></tr><tr><td>Juan Luis Gaete Chesta</td><td>Unrelated Third party</td><td>182</td><td>195</td></tr><tr><td>Arena Fertilizantes y Semillas</td><td>Unrelated Third party</td><td>201</td><td>216</td></tr><tr><td>Vicente Oyarce Castro</td><td>Unrelated Third party</td><td>213</td><td>222</td></tr><tr><td>Soc. Agrocorn. Julio Polanco</td><td>Unrelated Third party</td><td>-</td><td>144</td></tr><tr><td>Bernardo Guzmán Schmidt</td><td>Unrelated Third party</td><td>121</td><td>126</td></tr><tr><td>Total</td><td></td><td>9,611</td><td>9,423</td></tr></table>



## 22.9 Indirect guarantees

Guarantees without pending balance indirectly reflect that the respective guarantees are in force and approved by the Company’s Board of Directors and have not been used by the respective subsidiary.

<table><tr><td rowspan="2">Creditor of the guarantee</td><td colspan="2">Debtor</td><td rowspan="2">Type of guarantee</td><td colspan="2">Outstanding balances as of the closing date of the financial statements</td></tr><tr><td>Name</td><td>Relationship</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>Australian and New Zealand Bank</td><td>SQM North America Corp</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr><tr><td>Australian and New Zealand Bank</td><td>SQM Europe N.V.</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr><tr><td>Generale Bank</td><td>SQM North America Corp</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr><tr><td>General Bank</td><td>SQM Europe N.V.</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr><tr><td>Kredietbank</td><td>SQM North America Corp</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr><tr><td>Bancos e Instituciones Financieras</td><td>SQM Europe N.V.</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr><tr><td>Bancos e Instituciones Financieras</td><td>SQM Investment Corp. N.V.</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr><tr><td>Bancos e Instituciones Financieras</td><td>SQM Europe N.V.</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr><tr><td>Bancos e Instituciones Financieras</td><td>SQM North America Corp</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr><tr><td>Bancos e Instituciones Financieras</td><td>Nitratos Naturais do Chile Ltda.</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr><tr><td>Bancos e Instituciones Financieras</td><td>SQM México S.A. de C.V.</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr><tr><td>Bancos e Instituciones Financieras</td><td>SQM Brasil Ltda.</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr><tr><td>Bancos e Instituciones Financieras</td><td>SQM Investment Corp. N.V.</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr><tr><td>“BNP”</td><td>SQM Potasio S.A.</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr><tr><td>Sociedad Nacional de Minería A.G.</td><td>Royal Seed Trading A.V.V.</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr><tr><td>Scotiabank &amp; Trust (Cayman) Ltd.</td><td>Royal Seed Trading A.V.V.</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr><tr><td>Scotiabank &amp; Trust (Cayman) Ltd.</td><td>Royal Seed Trading A.V.V.</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr><tr><td>Bank of America</td><td>Royal Seed Trading A.V.V.</td><td>Subsidiary</td><td>Guarante</td><td></td><td></td></tr><tr><td>Export Development Canada</td><td>Royal Seed Trading A.V.V.</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr><tr><td>The Bank of Tokyo-Mitsubishi UFJ Ltd.</td><td>Royal Seed Trading A.V.V.</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr><tr><td>JP Morgan Chase Bank</td><td>SQM Industrial S.A.</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr><tr><td>The Bank of Nova Scotia</td><td>SQM Investment Corp. N.V.</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr><tr><td>Morgan Stanley Capital Services</td><td>SQM Investment Corp. N.V.</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr><tr><td>The Bank of Tokyo-Mitsubishi UFJ Ltd</td><td>SQM Investment Corp. N.V.</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr><tr><td>HSBC</td><td>SQM Investment Corp. N.V.</td><td>Subsidiary</td><td>Guantee</td><td></td><td></td></tr><tr><td>Deutsche Bank AG</td><td>SQM Investment Corp. N.V.</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr><tr><td>Credit Suisse International</td><td>SQM Investment Corp. N.V.</td><td>Subsidiary</td><td>Guarantee</td><td></td><td></td></tr></table>



## Note 23 Lawsuits and complaints

## Investigation by the Department of Justice and the Securities Exchange Commission and Agreements

On January 13, 2017, the Company signed agreements with the DOJ and the SEC relating to their investigations into Company payments to suppliers and organizations that may have had links with politically exposed persons during the period from 2008 to 2015. As a result, the Company conducted its own internal investigation through an ad-hoc Board committee. The Company’s securities are traded in the USA, so the Company is subject to US law. The Company has voluntarily submitted the results of its internal investigation and supporting documents to the DOJ, the SEC and the relevant Chilean authorities.

In accordance with the terms of the Deferred Prosecution Agreement with the DOJ, denominated DPA the Company has accepted that the DOJ formulates (i) a charge for infractions for the lack of implementation of effective internal accounting systems and internal accounting controls and (ii) a charge for infractions for failure to adequately maintain books, records and accounting sections in relation to the events investigated, Under the DPA, the DOJ has agreed not to pursue such charges against the Company for a period of 3 years and release the Company from liability after such period, inasmuch as within that period the Company complies with the terms of the DPA. These include payment of a fine of US$15,487,500 and acceptance of an external monitor for a period of 24 months that will assess the Company’s compliance program, and continue to report on the Company independently for an additional year.

In relation to the agreement with the SEC, the Company has agreed to (i) pay a fine of 15 million dollars and (ii) maintain the Monitor for the aforementioned period.

The SEC has issued a Cease and Desist Order that does not identify other breaches of United States regulations.

The aforementioned amounts of approximately US$ 30.5 million, were reflected in the Company’s profit and loss during the fourth quarter of 2016 in the “Other Expenses by function” line.



## Note 24 Environment

## 24.1 Disclosures of disbursements related to the environment

The Company is continuously concerned with protecting the environment both in its production processes and with respect to products manufactured. This commitment is supported by the principles indicated in the Company’s Sustainable Development Policy. The Company is currently operating under an Environmental Management System (EMS) that has allowed it to strengthen its environmental performance through the effective application of the Company’s Sustainable Development Policy.

Operations that use caliche as a raw material are carried out in desert areas with climatic conditions that are favorable for drying solids and evaporating liquids using solar energy. Operations involving the open-pit extraction of minerals.

Many of the Company’s products are shipped in bulk at the Port of Tocopilla. In 2007, the city of Tocopilla was declared a zone saturated with MP10 Particles mainly due to the emissions from the electric power plants that operate in that city. In October 2010, the Decontamination Plan for Tocopilla was put in place. Accordingly, the Company has committed to taking several measures to mitigate the effects derived from bulk product movements in the port. These measures have been timely implemented since 2007.

The Company carries out environmental follow-up and monitoring plans based on specialized scientific studies. Follow-up on relevant variables defined for each project enables the Company to verify the status, for example, of vegetation, flora, fauna and aquatic life in the ecosystems to protect. Follow-up plans are supported by a broad control network that includes monitoring points such as meteorological stations and wells, satellite images, plots for recording the status of vegetation and fauna, etc. The activities comprised in these plans are reported regularly to authorities based on the Company’s commitments made through resolutions that approve different SQM projects.

The Company maintains environmental monitoring across the systems where it operates, which is supported by numerous studies that integrate diverse scientific efforts from prestigious research centers on a national and international level, such as the Spanish National Research Council (CSIC) and the Universidad Católica del Norte.

Furthermore, within the framework of the environmental studies which the Company is conducting, the Company performs significant activities in relation to the recording of Pre-Columbian and historical cultural heritage, as well as the protection of heritage sites, in accordance with current Chilean laws. These activities have been especially performed in the areas surrounding Maria Elena and the Nueva Victoria plant. This effort is being accompanied by cultural initiatives within the community and the organization of exhibits in local and regional museums.

As emphasized in its Sustainable Development Policy, the Company strives to maintain positive relationships with the communities surrounding the locations in which it carries out its operations, as well as to participate in communities' development by supporting joint projects and activities which help to improve the quality of life for residents. For this purpose, the Company has focused its efforts on activities involving the rescue of historical heritage, education and culture, as well as development. In order to do so, it acts both individually and in conjunction with private and public entities.

## 24.2 Detailed information on disbursements related to the environment

The cumulative disbursements which the Company had incurred as of December 31, 2019 for the concept of investments in production processes, verification and control of compliance with ordinances and laws related to industrial processes and facilities amounted to ThUS$ 16,983 and are detailed as follows



## Accumulated expenses as of December 31, 2019

<table><tr><td>Parent Company or Subsidiary</td><td>Project Name</td><td>Reason for Disbursement</td><td>Asset / Expense</td><td>Disbursement</td><td>Exact or Estimated Date of Disbursement</td></tr><tr><td>Miscellaneous</td><td>Environment - Operating Area</td><td>Not classified</td><td>Expense</td><td>8,054</td><td>12-31-2019</td></tr><tr><td>SQM S.A.</td><td>01-1013800 - Increase height of Absorber Tower</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>15</td><td>12-31-2019</td></tr><tr><td>SQM S.A.</td><td>01-1017200 - CEDAM at Puquios (ponds) at Llamara</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>3</td><td>12-31-2019</td></tr><tr><td>SQM S.A.</td><td>01-1017400 - Value Added Paints and Deposits</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>2</td><td>12-31-2019</td></tr><tr><td>SQM S.A.</td><td>01-1017600 - Regularization of Substances Decree</td><td>Environmental processing</td><td>Expense</td><td>63</td><td>12-31-2019</td></tr><tr><td>SQM S.A.</td><td>01-1018700 - Penalization Process for Salar de Llamara</td><td>Environmental processing</td><td>Assets</td><td>522</td><td>12-31-2019</td></tr><tr><td>SQM S.A.</td><td>01-1019400 - EIA Ampliación de TEA e Impulsión agua de mar</td><td>Environmental processing</td><td>Assets</td><td>898</td><td>12-31-2019</td></tr><tr><td>SQM S.A.</td><td>01-1028200 - EIA Llamara</td><td>Environmental processing</td><td>Expense</td><td>253</td><td>12-31-2019</td></tr><tr><td>SQM S.A.</td><td>01-1028300 - Implementation of PDC 2019</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>1,057</td><td>12-31-2019</td></tr><tr><td>SQM S.A.</td><td>01-1030700 - Sector Permits EIA Tente en el Aire Project</td><td>Environmental processing</td><td>Expense</td><td>131</td><td>12-31-2019</td></tr><tr><td>SQM Industrial S.A.</td><td>04-1017700 - Basic Engineering and EIA for TEA industrial area and seawater impulsion N.V.</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>318</td><td>12-31-2019</td></tr><tr><td>SQM Industrial S.A.</td><td>04-1025000 - Re-perforación Pozo 2PL-2 y Ma</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>7</td><td>12-31-2019</td></tr><tr><td>SQM Industrial S.A.</td><td>04-1007000 - Environmental impact statement</td><td>Environmental processing</td><td>Expense</td><td>7</td><td>12-31-2019</td></tr><tr><td>SQM Industrial S.A.</td><td>04-1017000 - Recovery Water Intake from Rivers</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>119</td><td>12-31-2019</td></tr><tr><td>SQM Industrial S.A.</td><td>04-1012200 - Environmental Impact Statement and Regularization of CS Ponds</td><td>Environmental processing</td><td>Assets</td><td>19</td><td>12-31-2019</td></tr><tr><td>SQM Industrial S.A.</td><td>04-1013500 - Handling of Equipment associated with PCBs</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>251</td><td>12-31-2019</td></tr><tr><td>SQM Industrial S.A.</td><td>04-1015200 - Implement Economizers</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>195</td><td>12-31-2019</td></tr><tr><td>SQM Industrial S.A.</td><td>04-1015700 - Update closure plans</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>52</td><td>12-31-2019</td></tr><tr><td>SQM Industrial S.A.</td><td>04-1017200 - Guarantee availability</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>253</td><td>12-31-2019</td></tr><tr><td>SQM Industrial S.A.</td><td>04-1019900 - Provisional Access to Cerro Domina</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>141</td><td>12-31-2019</td></tr><tr><td>SQM Industrial S.A.</td><td>04-M002000 - Recovery of Potable Water at María Elena</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>225</td><td>12-31-2019</td></tr><tr><td>SQM Salar S.A.</td><td>19-CO50700 - Solar Electric Recharge Point Project-</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>53</td><td>12-31-2019</td></tr><tr><td>SQM Salar S.A.</td><td>19-L012100 - Upgrade to weather stations</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>17</td><td>12-31-2019</td></tr><tr><td>SQM Salar S.A.</td><td>19-L018000 - Upgrade TT illumination</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>40</td><td>12-31-2019</td></tr><tr><td>SQM Salar S.A.</td><td>19-L018700 - 5th Update of environmental modeling</td><td>Environmental processing</td><td>Expense</td><td>10</td><td>12-31-2019</td></tr><tr><td>SQM Salar S.A.</td><td>19-L018800 - UPC Consulting for NW and others</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>166</td><td>12-31-2019</td></tr><tr><td>SQM Salar S.A.</td><td>19-L018900 - Evaporation 2018-2019</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>8</td><td>12-31-2019</td></tr><tr><td>SQM Salar S.A.</td><td>19-L019800 - Paleoclimate Study (Iberia)</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>1</td><td>12-31-2019</td></tr><tr><td>SQM Salar S.A.</td><td>19-L020000 - Improvement of Operations Monitoring Network</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>5</td><td>12-31-2019</td></tr><tr><td>SQM Salar S.A.</td><td>19-L020300 - Telemetry boreholes</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>821</td><td>12-31-2019</td></tr><tr><td>SQM Salar S.A.</td><td>19-L021400 - Environmental Monitoring 2019</td><td>Environmental processing</td><td>Expense</td><td>2,767</td><td>12-31-2019</td></tr><tr><td>SQM Salar S.A.</td><td>19-L021700 - Improvement of RH and MA 2019</td><td>Environmental processing</td><td>Expense</td><td>80</td><td>12-31-2019</td></tr><tr><td>SQM Salar S.A.</td><td>19- S013400- Online Monitoring</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>430</td><td>12-31-2019</td></tr><tr><td>Total</td><td></td><td></td><td></td><td>16,983</td><td></td></tr></table>



Future expenses as of December 31, 2019

<table><tr><td>Parent Company or Subsidiary</td><td>Project Name</td><td>Reason for Disbursement</td><td>Asset / Expense</td><td>Disbursement</td><td>Exact or Estimated Date of Disbursement</td></tr><tr><td>Miscellaneous</td><td>Environment - Operating Area</td><td>Not classified</td><td>Expense</td><td>10,085</td><td>12-31-2020</td></tr><tr><td>SQM S.A.</td><td>01-017200 - CEDAM at Puquios (ponds) at Llamara</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>28</td><td>12-31-2020</td></tr><tr><td>SQM S.A.</td><td>01-017400 - Development of Pintados and surrounding area.</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>108</td><td>12-31-2020</td></tr><tr><td>SQM S.A.</td><td>01-017600 - Regularization of Substances Decree</td><td>Environmental processing</td><td>Expense</td><td>75</td><td>12-31-2020</td></tr><tr><td>SQM S.A.</td><td>01-019400 - EIA Expansion of TEA and Seawater Impulsion</td><td>Environmental processing</td><td>Assets</td><td>426</td><td>12-31-2020</td></tr><tr><td>SQM S.A.</td><td>01-028200 - EIA Llamara</td><td>Environmental processing</td><td>Expense</td><td>1,527</td><td>12-31-2020</td></tr><tr><td>SQM S.A.</td><td>01-028300 - Implementation of PDC 2019</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>1,231</td><td>12-31-2020</td></tr><tr><td>SQM S.A.</td><td>01-030700 - Permisos Sectoriales EIA Proyecto Tente en el Aire</td><td>Environmental processing</td><td>Expense</td><td>284</td><td>12-31-2020</td></tr><tr><td>SQM Industrial S.A.</td><td>04-1025000 - Re-perforacion Pozo 2PL-2 y Ma</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>128</td><td>12-31-2020</td></tr><tr><td>SQM Industrial S.A.</td><td>04-J012200 - DIA and Regularization of CS Ponds</td><td>Environmental processing</td><td>Assets</td><td>35</td><td>12-31-2020</td></tr><tr><td>SQM Industrial S.A.</td><td>04-J013500 - Handling of Equipment associated with PCBs</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>303</td><td>12-31-2020</td></tr><tr><td>SQM Industrial S.A.</td><td>04-J015200 - Implementation Economizers</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>59</td><td>12-31-2020</td></tr><tr><td>SQM Industrial S.A.</td><td>04-J015700 - Update of Closure Plans</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>127</td><td>12-31-2020</td></tr><tr><td>SQM Industrial S.A.</td><td>04-J015800 - Other Sector Regulatory Measures</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>237</td><td>12-31-2020</td></tr><tr><td>SQM Industrial S.A.</td><td>04-J017200 - Guarantee availability S</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>104</td><td>12-31-2020</td></tr><tr><td>SQM Industrial S.A.</td><td>04-J019900 - Provisional Access to Cerro Domina</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>95</td><td>12-31-2020</td></tr><tr><td>SQM Industrial S.A.</td><td>04-M003900 - Revocation of PDME</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>47</td><td>12-31-2020</td></tr><tr><td>SQM Salar S.A.</td><td>19-L014700 - Industrial Waste Management</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>135</td><td>12-31-2020</td></tr><tr><td>SQM Salar S.A.</td><td>19-L018800 - UPC Consulting for NW and others</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>238</td><td>12-31-2020</td></tr><tr><td>SQM Salar S.A.</td><td>19-L018900 - Evaporation 2018-2019</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>172</td><td>12-31-2020</td></tr><tr><td>SQM Salar S.A.</td><td>19-L019800 - Paleoclimate Study (Iberia)</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>49</td><td>12-31-2020</td></tr><tr><td>SQM Salar S.A.</td><td>19-L020000 - Improvement of Operations Monitoring Network</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>95</td><td>12-31-2020</td></tr><tr><td>SQM Salar S.A.</td><td>19-L021400 - Environmental Monitoring 2019</td><td>Environmental processing</td><td>Expense</td><td>33</td><td>12-31-2020</td></tr><tr><td>SQM Salar S.A.</td><td>19-L021700 - Improvement of RH and MA 2019</td><td>Environmental processing</td><td>Expense</td><td>132</td><td>12-31-2020</td></tr><tr><td>SQM Salar S.A.</td><td>19- S013400- Online Monitoring</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>300</td><td>12-31-2020</td></tr><tr><td>Total</td><td></td><td></td><td></td><td>16,053</td><td></td></tr></table>



Accumulated expenses as of December 31, 2018

<table><tr><td rowspan="2">Parent Company or Subsidiary</td><td rowspan="2">Project Name</td><td rowspan="2">Reason for Disbursement</td><td rowspan="2">Asset / Expense</td><td>Disbursement</td><td rowspan="2">Exact or Estimated Date of Disbursement</td></tr><tr><td>ThUS\(</td></tr><tr><td>Miscellaneous</td><td>Environment - Operating Area</td><td>Not classified</td><td>Expense</td><td>9,002</td><td>12-31-2018</td></tr><tr><td>SQM S.A.</td><td>01-1005500 - Standardization of SO2 plants</td><td>Environmental processing</td><td>Assets</td><td>27</td><td>31-12-2018</td></tr><tr><td>SQM S.A.</td><td>01-1007300 - Compliance with Iodine Gas Exposure Standard</td><td>Environmental processing</td><td>Assets</td><td>59</td><td>31-12-2018</td></tr><tr><td>SQM S.A.</td><td>01-1013800 - Increase height of Absorber Tower</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>124</td><td>31-12-2018</td></tr><tr><td>SQM S.A.</td><td>01-1017200 - CEDAM at Puqios (ponds) at Llamara</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>25</td><td>31-12-2018</td></tr><tr><td>SQM S.A.</td><td>01-1017400 - Development of Pintados and surrounding area.</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>5</td><td>31-12-2018</td></tr><tr><td>SQM S.A.</td><td>01-1018300 - Cultural Heritage Baseline Environmental Impact Statement (EIS) Mina Oeste N.V.</td><td>Environmental processing</td><td>Expense</td><td>117</td><td>31-12-2018</td></tr><tr><td>SQM S.A.</td><td>01-1018700 - Penalization Process for Salar de Llamara</td><td>Environmental processing</td><td>Expense</td><td>992</td><td>31-12-2018</td></tr><tr><td>SQM S.A.</td><td>01-1019400 - EIA Expansion of TEA and Seawater Impulsion</td><td>Environmental processing</td><td>Assets</td><td>1,914</td><td>31-12-2018</td></tr><tr><td>SQM S.A.</td><td>01-1017600 - Regularization of Substances Decree</td><td>Environmental processing</td><td>Expense</td><td>121</td><td>31-12-2018</td></tr><tr><td>SQM Industrial S.A.</td><td>04-J007000 - Environmental Impact Statement</td><td>Environmental processing</td><td>Expense</td><td>30</td><td>31-12-2018</td></tr><tr><td>SQM Industrial S.A.</td><td>04-J010200 - NK CS (KNO3-NaNO3 salt production at NPT2 plant)</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>100</td><td>31-12-2018</td></tr><tr><td>SQM Industrial S.A.</td><td>04-1015600 - Recovery of Reject Water from Osmosis Plant, NV Iodine Plant</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>130</td><td>31-12-2018</td></tr><tr><td>SQM Industrial S.A.</td><td>04-J012200 - Environmental Impact Statement and Regularization of CS Ponds</td><td>Environmental processing</td><td>Assets</td><td>131</td><td>31-12-2018</td></tr><tr><td>SQM Industrial S.A.</td><td>04-M002000 - Recovery of Potable Water at María Elena</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>161</td><td>31-12-2018</td></tr><tr><td>SQM Industrial S.A.</td><td>04-1025000 - Re-drilling of Well 2PL-2 and Maintenance of Access Road to Wells</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>18</td><td>31-12-2018</td></tr><tr><td>SQM Industrial S.A.</td><td>04-P005000 - Installation, electrical wiring</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>3</td><td>31-12-2018</td></tr><tr><td>SQM Industrial S.A.</td><td>04-1017700 - Basic engineering and Environmental Impact Assessment for TEA industrial area and seawater impulsion N.V.</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>561</td><td>31-12-2018</td></tr><tr><td>SQM Industrial S.A.</td><td>04-J013500 - Handling of Equipment associated with PCBs</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>127</td><td>31-12-2018</td></tr><tr><td>SIT S.A.</td><td>03-T003400 - 2016 Port maintenance Capexed with PCBs</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>28</td><td>31-12-2018</td></tr><tr><td>SIT S.A.</td><td>03-T001900 - Storage Warehouse Cover</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>25</td><td>31-12-2018</td></tr><tr><td>SIT S.A.</td><td>03-T001800 - Mechanization of Shipment from Ca</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>50</td><td>31-12-2018</td></tr><tr><td>SIT S.A.</td><td>03-T003200 - Mechanization of Shipment from Ca</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>218</td><td>31-12-2018</td></tr><tr><td>SIT S.A.</td><td>03-T003600 - Improved Port SQM Bulk Storage</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>33</td><td>31-12-2018</td></tr><tr><td>SIT S.A.</td><td>03-T004200 - Encapsulation and Collectors Yards 8 and 9</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>795</td><td>31-12-2018</td></tr><tr><td>SIT S.A.</td><td>03-T004500 - Belt 5 Extension and Overhaul</td><td>Environmental processing</td><td>Assets</td><td>200</td><td>31-12-2018</td></tr><tr><td>SIT S.A.</td><td>03-T005000 - Ground leveling and paving of warehouse</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>210</td><td>31-12-2018</td></tr><tr><td>SIT S.A.</td><td>03-T006400 - Pollution Control and Management Equipment</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>246</td><td>31-12-2018</td></tr><tr><td>SIT S.A.</td><td>03-T006200 - Storage Facilities Yard 6</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>299</td><td>31-12-2018</td></tr><tr><td>SIT S.A.</td><td>03-T006100 - Closure of Storage Facilities Yard 9</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>443</td><td>31-12-2018</td></tr><tr><td>SQM Salar S.A.</td><td>19-L012200 - Installation of flow meters per environmental standard</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>74</td><td>31-12-2018</td></tr><tr><td>SQM Salar S.A.</td><td>19-L012100 - Renewal of equipment with certification required by RCA</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>39</td><td>31-12-2018</td></tr><tr><td>SQM Salar S.A.</td><td>19-C003900 - Extension of Carbonate 120,000 TPA Plant</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>776</td><td>31-12-2018</td></tr><tr><td>SQM Salar S.A.</td><td>19-L014700 - Industrial Waste Management</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>120</td><td>31-12-2018</td></tr><tr><td>SQM Salar S.A.</td><td>19-L014900 - Sludge Drying Project</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>180</td><td>31-12-2018</td></tr><tr><td>SQM Salar S.A.</td><td>19-L018400 - EIA, PSA, Hydrogeology and Conservation</td><td>Environmental processing</td><td>Expense</td><td>1,824</td><td>31-12-2018</td></tr><tr><td>SQM Salar S.A.</td><td>19-L018700 5th Update of environmental modeling</td><td>Environmental processing</td><td>Expense</td><td>76</td><td>31-12-2018</td></tr><tr><td>SQM Nitratos S.A.</td><td>12-1012700 - Mine Site Workshop Water Recovery Plant</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>156</td><td>31-12-2018</td></tr><tr><td>Total</td><td></td><td></td><td></td><td>19,439</td><td></td></tr></table>



## Future expenses as of December 31, 2018

<table><tr><td rowspan="2">Parent Company or Subsidiary</td><td rowspan="2">Project Name</td><td rowspan="2">Reason for Disbursement</td><td rowspan="2">Asset / Expense</td><td>Disbursement</td><td rowspan="2">Exact or Estimated Date of Disbursement</td></tr><tr><td>ThUS\(</td></tr><tr><td>Varias</td><td>Environment - Operating Area</td><td>Not classified</td><td>Expense</td><td>10,204</td><td>12-31-2018</td></tr><tr><td>SQM S.A.</td><td>01-1012200 - Repair or replacement of borehole</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>76</td><td>12-31-2018</td></tr><tr><td>SQM S.A.</td><td>01-1013800 - Increase height of Absorber Tower</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>15</td><td>12-31-2018</td></tr><tr><td>SQM S.A.</td><td>01-1017200 - CEDAM at Puquios (ponds) at Llamara</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>90</td><td>12-31-2018</td></tr><tr><td>SQM S.A.</td><td>01-1017400 - Development of Pintados and surrounding area, Pintados y Depósitos</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>116</td><td>12-31-2018</td></tr><tr><td>SQM S.A.</td><td>01-1018700 - Penalization Process for Salar de Llamara</td><td>Environmental processing</td><td>Expense</td><td>528</td><td>12-31-2018</td></tr><tr><td>SQM S.A.</td><td>01-1019400 - EIA Expansion of TEA and Seawater Impulsion</td><td>Environmental processing</td><td>Assets</td><td>536</td><td>12-31-2018</td></tr><tr><td>SQM S.A.</td><td>01-1017600 - Regularización Decreto Sustanc,</td><td>Environmental processing</td><td>Expense</td><td>485</td><td>01-23-2019</td></tr><tr><td>SIT S.A.</td><td>03-T004200 - Encapsulation and Collectors Yards 8 and 9</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>321</td><td>12-31-2018</td></tr><tr><td>SIT S.A.</td><td>03-T004500 - Belt 5 Extension and Overhaul</td><td>Environmental processing</td><td>Assets</td><td>141</td><td>12-31-2018</td></tr><tr><td>SIT S.A.</td><td>03-T006200 - Warehouses, yard 6</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>1,147</td><td>12-01-2019</td></tr><tr><td>SIT S.A.</td><td>03-T006400 - Pollution Control Equipment and Maintenance</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>144</td><td>13-01-2019</td></tr><tr><td>SIT S.A.</td><td>03-T006100 - Warehouses, yard 9</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>490</td><td>01-18-2019</td></tr><tr><td>SQM Salar S.A.</td><td>19-L012100 - Renewal of equipment with certification required by RCA</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>13</td><td>12-31-2018</td></tr><tr><td>SQM Salar S.A.</td><td>19-L018000 - Regularize TT lighting</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>74</td><td>01-16-2019</td></tr><tr><td>SQM Salar S.A.</td><td>19-L018700 - Fifth environmental model update</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>27</td><td>01-22-2019</td></tr><tr><td>SQM Industrial S.A.</td><td>04-J010200 - NK CS (KNO3-NaNO3 salt production at NPT2 plant)</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>3</td><td>12-31-2018</td></tr><tr><td>SQM Industrial S.A.</td><td>04-I017700 - Basic engineering and Environmental Impact Assessment for TEA industrial area and seawater impulsion N.V.</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>452</td><td>12-31-2018</td></tr><tr><td>SQM Industrial S.A.</td><td>04-J010700 - Recovery Water Intake from Rivers</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>120</td><td>12-31-2018</td></tr><tr><td>SQM Industrial S.A.</td><td>04-J012200 - Environmental Impact Statement and Regularization of CS Ponds</td><td>Environmental processing</td><td>Assets</td><td>187</td><td>12-31-2018</td></tr><tr><td>SQM Industrial S.A.</td><td>04-M002000 - Recovery of Potable Water at María Elena</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>264</td><td>12-31-2018</td></tr><tr><td>SQM Industrial S.A.</td><td>04-J013500 - Handling of Equipment associated with PCBs</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>34</td><td>12-31-2018</td></tr><tr><td>SQM Industrial S.A.</td><td>04-J013300 - Increase solid waste management in Dual Plant (Delkor Filter)</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>68</td><td>12-31-2018</td></tr><tr><td>SQM Industrial S.A.</td><td>04-P006500 - Installation, electrical wiring</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>104</td><td>12-31-2018</td></tr><tr><td>SQM Industrial S.A.</td><td>04-J015200 - Implementación Economizadores</td><td>Sustainability: Environment and Risk Prevention</td><td>Assets</td><td>276</td><td>12-31-2018</td></tr><tr><td>SQM Industrial S.A.</td><td>04-1025000 - Re-perforación Pozo 2PL-2 y Ma</td><td>Sustainability: Environment and Risk Prevention</td><td>Expense</td><td>242</td><td>12-31-2018</td></tr><tr><td>SQM Industrial S.A.</td><td>04-J014200 - Compromisos con la RCAs</td><td>Environmental processing</td><td>Expense</td><td>70</td><td>12-31-2018</td></tr><tr><td>Total</td><td></td><td></td><td></td><td>16,227</td><td></td></tr></table>



## 24.3 Description of each project, indicating whether these are in process or have been finished

## SOM S.A.

0138: This project is to increase the height of each  \( SO_{2} \)  absorber tower (regular and stand-by towers) by 2.5 meters. The towers' additional height will allow the height of the packing to be increased by 2.5, thereby improving the efficiency of the  \( SO_{2} \)  absorption. The main activities are: Basic and detailed engineering; supply of the bodies of the absorber towers (frp), liquid distributors, tower brine pump pad, tri-pack packing type, polyethylene pipes and fitting; gas measurement service; metallic structure manufacturing and installation services; and project start-up.

I0172: The commitments of the Pampa Hermosa project for the Salar de Llamara include the Tamarugos Environmental Management Plan (PMAT), which contemplates an Environmental Education Program that includes the design, construction and start-up of an Environmental Education Center (CEDAM) at Puquios de Llamara. Conceptual design, detailed design, construction and start-up are necessary for the CEDAM, which will be subject to approval by the authorities so its duration and costs are subject to the approval of third parties.

I0174: The commitments within the Pampa Hermosa project include implementing "Value Added" at the former Pintados station. The "Value Added" proposal was submitted to the authority and once approved, it should be implemented (parking, path, shade and information panels). The commitments within the "Zona de Mina Nueva Victoria" and "Pampa Hermosa" projects include implementing a storage facility in Humberstone to store archaeological material recovered as a result of the archaeological compensation measures included in these projects. The Humberstone storage facility requires a proposal and subsequent implementation, which is subject to approval by the authority. Therefore, its duration and cost is subject to such third-party approvals.

I0187: The project involves the implementation of measures that were committed to during the penalty process, including urgent and transitory measures. Actions to be implemented include monthly biotic monitoring, quarterly landscape monitoring, metagenomic analysis, study accrediting the nonexistence of environmental effects in puquios (aquatic biota) and study accrediting the implementation of adequate water quality control of water injected into the system, both accredited by a center for excellence in a state or state-recognized university.

I0194: Tender and awarding of environmental permits, implement archeology, biota, human environment campaigns, etc., develop marine studies, prepare reports and enter study into the assessment system, monitor and respond to addenda until the system is approved. Prepare and submit claims to third parties associated with the request for rights of way.

I0055: The gas/liquid ratio is deficient in the SO2 plant, preventing the absorption of SO2, resulting in free iodine losses, due to inadequate stripping of kerosene and prilling air. This phenomenon also causes plugs in ducts and furnaces (unscheduled plant shutdowns), a highly contaminated environment for people (hygiene and health deviations), excessive acid rain (corrosion of facilities), and a high sulphur and sodium metabisulphite consumption factor. By changing the extraction fans to increase airflow and SO2 absorption towers for prilling, the diameter of the ducts can be expanded. This ensures that the gas/liquid ratio can be increased and sustained. A scrubber unit must be installed (tower, pump, gas extractor and piping) to reduce SO2 emissions. The same concept was developed for the SO2 Iodine plant in Maria Elena.

I0073: The iodine gas capture system is operating very inefficiently. The iodine steam levels are between 150% and 4,900% above the levels allowed for jobs at iodine plants and warehouses as established in Article 61 of Supreme Decree 594/1999 approving the Regulation on Basic Sanitary and Environmental Conditions in Workplaces. This project is in progress.



I0122: The project will repair and replace environmental monitoring boreholes that need to be deepened. Improvements in pique boreholes are also included, to avoid risk conditions. The priority wells are  \( N^{\circ} $  8 and 10-S1 in the pampa of the tamarugal and PO-5 in Salar de Llamara.

I0183: A heritage baseline in the western mine sector will be prepared, which is a DIA requirement.

I0176: The project will prepare an initial diagnosis at various sites, which will identify the deviations and measures required to adapt them, in order to subsequently prepare an adaptation program that will be submitted to the Regional Health Ministerial Secretary.

I0282: The project will prepare an initial diagnosis at various sites, which will identify the deviations and measures required to adapt them, in order to subsequently prepare an adaptation program that will be submitted to the Regional Health Ministerial Secretary. The measures will be defined on the basis of this diagnosis, and minor or major structural amendments that require prior environmental assessment (DIA/EIA) may be necessary.

I0283: The project will implement the measures described in the PDC. The implementation includes advice from consultants (regarding legal, hydrogeological, and PDC procedures), studies and additional monitoring (UCN, ANAM, FisioAqus, and other studies), in addition to building infrastructure.

I0307: The project consists of the preparation of reports to obtain sectoral permits: Authorization for the Exploitation Method (SERNAGEOMIN) – For project “Tente en el Aire”.

## SQM Industrial S.A.

I0177: The project will complete the basic engineering, execute the EIA Tente en el Aire, obtain the legal and sectorial permits for a second stage to secure the execution of the project.

I0156: The project will recover water from the osmosis rejection plant and use it in the pile leaching area, increasing the efficiency of water resource use.

I0250: The project consists of re-drilling well 2Pl-2, which implies the detention of the extraction well, extraction of current casing and its re-drilling, with the relevant development work and pump tests. Road maintenance works imply leveling roads, filling damaged areas and compacting this fill.

J0070: This is preparing and processing the Environmental Impact Statement (DIA), in order to obtain an Environmental Qualification Resolution (RCA). The required background information includes the baseline air quality. Therefore, a MP 2.5 and gas monitoring station was installed that compliments the current stations at Maria Elena. The project is underway.

J0102: It is proposed to build a new PTS plant that is integrated into the NPT 2 crystallization process. The engineering design of this plant considers the reuse of the equipment already acquired for the NK PV plant. The plant includes a new raw materials yard, a grinder stage (sizer), a wet mill, a dissolution stage with reactors and thickener and a filtration and centrifuge unit for discarded salt. The crystallization from the NPT1 and NPT2 plants will be reused, as well as the refining plant at the NPT2 plant.

P0065: The project will install a transformer, posting and collecting tank for trench solutions. It will also improve the trench sector to safely position the low suction pumps. Heavy machinery will be required.

J0107: The project looks to renovate and automate the operation of pump stations at the three water intakes, by incorporating automatic valves and smart controls for pumps, In addition, water intake pipe sections, cut-off valves, check valves, drains and vents should be renewed, Due to the water conditions and length of pipes, these face the risk of failure due to overpressure, corrosion and material wear, Maintenance and repair works must also be undertaken on pumps at each water intake as a result of wear and corrosion due to the characteristics of river water.



J0122: The project consists of entering the Coya Sur wells into the “environmental impact assessment system” and processing the permits for these wells with the General Directorate of Water Resources (DGA).

J0135: This project consists of dealing with all the oils and components that contain 50ppm or more of Policlorobife PCB by 2025 at the latest. The activities to be undertaken will be to deal with all those elements with oil that have previously been identified as having more than 50ppm of PCB.

M0020: The project consists of concluding the system of the drinking water network, in addition to renewing several sections of the network, due to the deterioration of original pipes. It also intends to acquire equipment to better address water seepage in town and problems in the sewage chambers. Sewage water management requires a single backfill for final sludge disposal, in keeping with current legislation.

J0133: The project will increase filtration capacity with the centrifuge of the Anhydrous Sulphate Plant: Industrial test. If it is favorable, install belts to transfer waste to the collection yard.

J0152: The project will install exhaust gas heat recovery equipment in boilers and implement associated structural improvements.

J0142: The project will implement environmental measures associated with updating the CS DIA (heritage sign and paving ME road) and the Pedro de Valdivia DIA (controlled disturbance plan).

J0157: The project will update the closure plans in accordance with the normal regime established by current legislation. These requirements include an initial external audit, detailed risks analysis and their control, and other requirements

J0158: The project will prepare and process sectorial permits for favorable reports to construct in Coya Sur (CS), and permits for hydraulic works defined in Article 294 of the Water Code (evaporation wells) at CS and NV.

J0172: The project will ensure the availability of water resources. It includes: Acquisition of a Flowserve 6GT booster pump, as a “spare” to drive water to Pedro de Valdivia. Acquisition of 2 motor pump sets to renew the current Coya-Vergara 3 and 4 sets, as the current brand has become obsolete. Repair the industrial water accumulation pond in Recinto Vergara (increasing the storage capacity by 1500 m³). Continue renovating pipes and vents in water lines in "CS, ME, VE and CV" adductions.

J0199: The project considers obtaining a provisional roadway approval from the Ministry of Public Works to prepare and use the intersection, incorporating leveling and signposting in accordance with the roadways manual, ensuring adequate conditions for safe transit in compliance with standards.

M0039: The project considers requesting the revocation of the saturated zone and the PDME. Currently the Maria Elena and Pedro de Valdivia zone has been declared PM10 saturation zone, with a current Decontamination Plan. The monitoring results from these last few years have resulted in the revocation of the saturation zone and the PDME.



## Servicio Integrales de tránsito y Transferencias S.A.

T0018: The project will install an underground conveyor belt that runs outside the storage boxes of yards 8 and 9, and connects to belt 5 and then to the loading system. The project has an environmental component, although it is an operational improvement. The project includes the purchase and implementation of belt coverage as an emissions mitigation measure (internal emissions control measure), in order to improve compliance with the Tocopilla Atmospheric Decontamination Plan (PDA). The project is in progress.

T0019: The project installed coverings (roof and sides) to the 4 new storage boxes that will be built in areas within yards 8 and 9. The project has an environmental component, although it is an operational improvement. The project includes the construction of a warehouse as an emissions mitigation measure, in order to improve compliance with the Tocopilla Atmospheric Decontamination Plan (PDA) and reduce dust emissions. The project has been completed.

T0032: The project will install an underground conveyor belt that runs outside the storage boxes of yard 6, with feeding points connected directly to belt 6 and then to the loading system. The project has an environmental component, although it is an operational improvement. The project includes implementing conveyor belt 6 from yard 6, which is an emission control measure that was committed in the Tocopilla PDA. The project is currently underway.

T0034: The project invested as required to maintain the operational capacity of the port, and to ensure the high availability of loading equipment. The project has an environmental component, although it is an operational improvement. The project included replacing and/or repositioning the damaged wind breaks in yard 3, which is an emission control measure that was committed in the Tocopilla PDA. The project has been completed.

T0036: The project will install rainwater collection gutters in the storage warehouses. It will carry out an engineering study of potential multiproduct storage in a single silo and potentially install vibrating floors that allow product free runoff thus avoiding manual operation risks and the effect that this causes during loading.

T0042: In accordance with regulatory matters in Article 13 Supreme Decree. 70/2010, Tocopilla PDA must incorporate dust collection systems in TV-1 and TV-2 hoppers at yards 8 and 9.

T0045: Belts for yards 8 and 9 will be finished by joining them to belt 5 and thus become part of the loading system. This involves the extension, joining and overhaul of belt 5, and joining it to pan feeder 3 and its corresponding improvements, to become an integral part of the loading system. This complies with the environmental regulations required by the Tocopilla Decontamination Plan. "Atmospheric Decontamination Plan for the City of Tocopilla and its Surrounding Zone" (Supreme Decree 70/2010; Art.13 II.3).

T0050: Loose soil within the perimeter of the supply warehouse in yard 17 is uneven, which causes difficulties and operational risks for both the supply and operational warehouses. The surface area to be covered in paving stones is 2,100 m2. Furthermore, it includes the construction of a hazardous waste yard.

T0061: The project will construct the second stage of the warehouse for yard 9 (1,500 square meters).

T0062: An aerodrome yard facility measuring 6 by 35 by 110 meters will be installed for bulk product storage at heights with product loading and unloading from front end loaders and trucks as well as a proper remount. Yard storage facility 6 will be expanded in Box 5 and 6 for storing bulk product.

T0064: Sentinel Sweeper Equipment Purchase - Purchase of operationally critical equipment.



## SQM Salar S.A.

C0039: The project consists of increasing the production capacity of lithium carbonate, from 70,000 tons per year to 120,000 tons per year.

C0057: The project is focused on developing and promoting electro-mobility in our company, promoting the market for electric vehicles in the region and supporting a technological project to change the image. The project aims to build and maintain operational 1 off-grid electrolinera in Salar del Carmen (charging points of electric vehicles), which will be supplied 100% with solar energy and which will have a bank of lithium batteries which will increase the efficiency of the system, storing the energy not consumed.

L0121: Change of the weather station equipment to comply with the standard.

L0122: The project considers the change in flow meters to meet new standard requirements as well as adding standby flow meters. This project is in progress.

L0147: This project contemplates the reduction of these industrial waste storage points. This work will be undertaken with an external company that works in separation, organization and packaging of different industrial waste according to the RCA and legislation in force, to be removed from the same points until final disposal of site.

L0149: The project involves assembly of a dehydrator plant in current SQM Salar facilities designated for treatment, storage, transport and final disposal of sludge generated in different sewage water treatment plants and provision of the necessary solutions for compliance with Supreme Decree No. 04/09 “Regulation for Sludge Management in Sewage Water Treatment Plants”.

L0180: Standardization of lighting and electrical circuits for ground transport operations in Salar de Atacama.

L0156: The project aims to increase efficiency in the truck weighing and tare process, with an impact on the time that these spend on site. This will require an engineering study and installation of a new weigh station located in the former Oscar guard station at the Salar de Atacama. It also aims to increase efficiency of the truck weighing circuit by relocating Weigh Station 1 in the Salar de Atacama. This weigh station will be relocated to an appropriate sector, eliminating current issues. Weigh stations will be superficial.

L0184: The project involves advising for the Environmental Monitoring Plan, as well as improved environmental monitoring.

L0187: The project involves this 5th update to numeric modeling, which would provide compliance with the commitments undertaken during the environmental qualification process for the project “Changes and Improvements to Mining Operations in the Salar de Atacama

L0188: The project involves the participation of an external consulting team to narrow down the sources of the risks identified, propose operational optimization plans, improvements to control systems (monitoring networks) and support in modeling this deposit with a view to a better evolution of short- and medium-term projections (5 years). It will also propose the identification of alternative sources of productive brine equivalent at the nucleus. It proposes 3 stages: Diagnosis, operational improvements and monitoring-identification of new sources. Others: support in the development of 3D Peine and Quelana models, through a collaboration with CSIC involving 2 professionals for 6 months at a total cost of ThUS$36. Others: doctorate-level development in quantification and recharge from rain and snow, by supporting a doctoral student under the supervision of Emilio Custodio and Enric Vásquez for a 3-year period, with an annual budget of ThUS$36 (total Th$108).



L0189: It includes improving the current lysimeter stations (7) and implementing new stations (7) in important sectors that are not currently measured, with the ability to remotely transmit information. This will improve the spatial coverage of the stations that measure evaporation within the basin. The initial stage includes constructing 7 lysimeters on land inside the Salar. Subsequently, the equipment implementation stage will initiate recording, storing and transmitting information. Finally, an international expert will provide advice regarding an analysis of the information from all the current stations, to recalculate basin evaporation and propose methodological improvements.

L0198: The project will date sediment using the 14C method (or another to be defined) in the depositional environments of the last 50,000 years to complement the facies sedimentological model provided by the consultant. The project will try to reconstruct the variability history of the lagoon system with absolute ages.

L0200: The project will identify an appropriate device. Field testing of sensors. Purchase of sensors for all points. Installation of sensors. Analyze remote data transmission (future project)

L0203: The project will install a remote telemetry system in boreholes.

L0214: The project consists of implementing a 2019 environmental monitoring plan to monitor an optimum compliance of current environmental regulations.

L0217: The project involves quoting new equipment. Purchase of new equipment. Reparation of old equipment for use as backup in the event of unexpected failure of new equipment.

S0134: The project considers displaying online information on withdrawals and reinjections from the salar using equipment and technology that allows information to be captured 24 hours a day every 1 minute. Additionally, it includes biotic and hydrogeological information according to the frequency associated with compliance with the compromised environmental qualification resolutions that allow showing the authorities and the community the actions implemented by SQM to take charge of the compromised environmental variables.

## SQM Nitratos S.A.

I0127: By installing a reverse osmosis system or a process that enables the recovery of industrial water and that reduces the hardness of the water for cleaning the equipment, we can reuse this water to wash equipment again, thereby reducing the damage to the electrical systems of the equipment as a result of corrosion.



## Note 25 Mineral resource exploration and evaluation expenditure

Given the nature of operations of the Sociedad Química y Minera de Chile S.A. and Subsidiaries and the type of exploration it undertakes, disbursements for exploration can be found in 4 stages: Execution, economically feasible, not economically feasible and in exploitation:

(a) Implementation: Disbursements for prospecting under implementation and therefore prior to determination of economic feasibility, are classified in accordance with Note 3.23 as Non-Current Assets, in the line item Construction in progress of Property, Plant and Equipment

- Chile: ThUS$ 12,841 and ThUS$ 10,292 corresponds to exploration relating caliche and brine exploration as of December 31, 2019 and 2018.

- For Mt Holland, total disbursements corresponding to construction in progress (which includes exploration disbursements) amount to ThUS$ 30,475 as of December 31, 2019, and ThUS$ 11,298 as of December 31, 2018.

(b) Economically feasible: Prospecting disbursements corresponding to caliche exploration, wherein the study concluded that its economic feasibility is viable, are classified under “Non-Current Assets in Other Non-current Non-Financial Assets”, The balance as of December 31, 2019, is ThUS$ 6,576 and as of December 31, 2018, it is ThUS$ 5,099.

At December 31, 2019, ThUS$ 3,433 corresponding to advanced metallic exploration are also presented under the heading "Other Non-Current Non-Financial Assets", as of 31 December 2018, there were no activations for this concept.

For the exploration of the Salar de Atacama, the associated assets correspond to wells that can be used both in monitoring and exploitation of the Salar, Therefore, once the studies are concluded, these are classified as “Non-current Assets” in “Properties, Plants and Equipment”, assigning them a technical useful life of 10 years.

(c) Not economically feasible: Prospecting disbursements, once finalized and concluded to be not economically feasible, will be charged to profit and loss. As of December 31, 2019, there was a total of ThUS$ 165 for this concept, and as of December 31, 2018, there were no disbursements for this concept.

(d) In Exploitation: Caliche exploration disbursements that are found in this area are amortized based on the material exploited, the portion that is exploited in the following 12 months is presented as “Current Assets” in the “Process Inventories”, the remaining portion is classified as “Other Non-current Non-Financial Assets”.

As of December 31, 2019, the amount in “Current Assets” is ThUS$ 1,367 and the balance as of December 31, 2018 for this concept is ThUS$ 2,028, while in the item “Other Non-current Non-Financial Asset” as of December 31, 2019 is ThUS$ 8,645 and as of December 31, 2018 is ThUS$ 9,791.



## Note 26 Gains (losses) from operating activities in the statement of income of expenses, included according to their nature

## 26.1 Revenue from operating activities customer activities

The Group derives revenues from the sale of goods (which are recognized at one point in time) and from the provision of services (which are recognized over time) and are distributed among the following geographical areas and main product and service lines.

## (a) Geographic areas:

<table><tr><td colspan="8">As of December 31, 2019</td></tr><tr><td>Geographic areas</td><td>Specialty plant nutrition</td><td>Iodine and derivatives</td><td>Lithium and derivatives</td><td>Potassium</td><td>Industrial chemicals</td><td>Other</td><td>Total ThUSS</td></tr><tr><td>Chile</td><td>109,975</td><td>1,064</td><td>599</td><td>27,371</td><td>39,512</td><td>33,336</td><td>211,857</td></tr><tr><td>Latin America and the Caribbean</td><td>78,872</td><td>7,972</td><td>3,593</td><td>64,868</td><td>6,354</td><td>269</td><td>161,928</td></tr><tr><td>Europe</td><td>149,992</td><td>123,525</td><td>76,250</td><td>27,973</td><td>15,289</td><td>735</td><td>393,764</td></tr><tr><td>North America</td><td>243,399</td><td>90,070</td><td>45,810</td><td>43,312</td><td>27,798</td><td>883</td><td>451,272</td></tr><tr><td>Asia and Others</td><td>141,682</td><td>148,389</td><td>379,462</td><td>48,627</td><td>5,922</td><td>752</td><td>724,834</td></tr><tr><td>Total</td><td>723,920</td><td>371,020</td><td>505,714</td><td>212,151</td><td>94,875</td><td>35,975</td><td>1,943,655</td></tr></table>

<table><tr><td colspan="8">As of December 31, 2018</td></tr><tr><td>Geographic areas</td><td>Specialty plant nutrition</td><td>Iodine and derivatives</td><td>Lithium and derivatives</td><td>Potassium</td><td>Industrial chemicals</td><td>Other</td><td>Total ThUSS</td></tr><tr><td>Chile</td><td>111,595</td><td>1,052</td><td>700</td><td>25,593</td><td>4,575</td><td>45,834</td><td>189,349</td></tr><tr><td>Latin America and the Caribbean</td><td>77,737</td><td>6,389</td><td>3,598</td><td>80,192</td><td>12,098</td><td>177</td><td>180,191</td></tr><tr><td>Europe</td><td>200,229</td><td>112,080</td><td>103,430</td><td>46,068</td><td>17,384</td><td>473</td><td>479,664</td></tr><tr><td>North America</td><td>240,995</td><td>83,587</td><td>68,254</td><td>50,685</td><td>27,347</td><td>647</td><td>471,515</td></tr><tr><td>Asia and Others</td><td>151,195</td><td>121,864</td><td>558,819</td><td>64,936</td><td>46,863</td><td>1,407</td><td>945,084</td></tr><tr><td>Total</td><td>781,751</td><td>324,972</td><td>734,801</td><td>267,474</td><td>108,267</td><td>48,538</td><td>2,265,803</td></tr></table>



## (b) Main product and service lines:

<table><tr><td rowspan="3">Products and Services</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Specialty plant nutrition</td><td>723,920</td><td>781,751</td></tr><tr><td>- Sodium Nitrates</td><td>20,679</td><td>17,688</td></tr><tr><td>- Potassium nitrate and sodium potassium nitrate</td><td>457,477</td><td>527,945</td></tr><tr><td>- Specialty Blends</td><td>153,739</td><td>145,511</td></tr><tr><td>- Other specialty fertilizers</td><td>92,025</td><td>90,607</td></tr><tr><td>Iodine and derivatives</td><td>371,020</td><td>324,972</td></tr><tr><td>Lithium and derivatives</td><td>505,714</td><td>734,801</td></tr><tr><td>Potassium</td><td>212,151</td><td>267,474</td></tr><tr><td>Industrial chemicals</td><td>94,875</td><td>108,267</td></tr><tr><td>Other</td><td>35,975</td><td>48,538</td></tr><tr><td>- Services</td><td>3,410</td><td>4,017</td></tr><tr><td>- Income from leasing properties</td><td>1,438</td><td>1,474</td></tr><tr><td>- Income from subleases on right-of-use assets</td><td>261</td><td>-</td></tr><tr><td>- Commodities</td><td>16,176</td><td>18,581</td></tr><tr><td>- Other ordinary income Commercial Offices</td><td>14,690</td><td>24,466</td></tr><tr><td>Total</td><td>1,943,655</td><td>2,265,803</td></tr></table>



## 26.2 Cost of sales

Cost of sales broken down by nature of expense

<table><tr><td rowspan="3">Cost of sales</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Raw materials and consumables used</td><td>(271,912)</td><td>(260,869)</td></tr><tr><td>Classes of employee benefit expenses</td><td>(178,493)</td><td>(203,571)</td></tr><tr><td>Depreciation expense</td><td>(188,157)</td><td>(212,641)</td></tr><tr><td>Depreciation of Right-of-use Assets (contracts under IFRS 16)</td><td>(5,450)</td><td>-</td></tr><tr><td>Amortization expense</td><td>(5,102)</td><td>(6,376)</td></tr><tr><td>Investment plan expenses</td><td>(18,367)</td><td>(11,860)</td></tr><tr><td>Provision for site closure</td><td>(911)</td><td>(2,045)</td></tr><tr><td>Provision for materials, spare parts and supplies</td><td>(7,500)</td><td>1,721</td></tr><tr><td>Contractors</td><td>(123,096)</td><td>(120,923)</td></tr><tr><td>Operating leases</td><td>(47,007)</td><td>(37,245)</td></tr><tr><td>Mining concessions</td><td>(7,856)</td><td>(8,168)</td></tr><tr><td>Operations transport</td><td>(56,376)</td><td>(64,352)</td></tr><tr><td>Freight and product transport costs</td><td>(46,264)</td><td>(51,387)</td></tr><tr><td>Purchase of products from third parties</td><td>(189,583)</td><td>(182,695)</td></tr><tr><td>Insurance</td><td>(16,968)</td><td>(11,923)</td></tr><tr><td>CORFO rights</td><td>(143,861)</td><td>(182,954)</td></tr><tr><td>Export costs</td><td>(97,103)</td><td>(107,418)</td></tr><tr><td>Expenses related to Variable Parts Leases (contracts under IFRS 16)</td><td>(1,096)</td><td>-</td></tr><tr><td>Variation in inventory</td><td>52,557</td><td>20,597</td></tr><tr><td>Variation in inventory provision</td><td>17,107</td><td>(8,997)</td></tr><tr><td>Other</td><td>(48,165)</td><td>(34,525)</td></tr><tr><td>Total</td><td>(1,383,603)</td><td>(1,485,631)</td></tr></table>



## 26.3 Other income

<table><tr><td rowspan="2">Other income</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Discounts obtained from suppliers</td><td>676</td><td>705</td></tr><tr><td>Fines charged to suppliers</td><td>483</td><td>698</td></tr><tr><td>Taxes recovered</td><td>457</td><td>996</td></tr><tr><td>Amounts recovered from insurance</td><td>492</td><td>443</td></tr><tr><td>Overestimate of provisions for third-party obligations</td><td>983</td><td>375</td></tr><tr><td>Other operating income</td><td>2,422</td><td>1,536</td></tr><tr><td>Options on mining claims</td><td>5,298</td><td>16,095</td></tr><tr><td>Easements, pipelines and roads</td><td>7,204</td><td>10,806</td></tr><tr><td>Reimbursement mining licenses and notary expenses</td><td>203</td><td>394</td></tr><tr><td>Total</td><td>18,218</td><td>32,048</td></tr></table>

## 26.4 Administrative expenses

<table><tr><td rowspan="2">Administrative expenses</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Remuneration and benefits to employees</td><td>(60,255)</td><td>(63,880)</td></tr><tr><td>Marketing costs</td><td>(3,911)</td><td>(3,078)</td></tr><tr><td>Amortization expenses</td><td>(5)</td><td>(15)</td></tr><tr><td>Entertainment expenses</td><td>(5,783)</td><td>(4,805)</td></tr><tr><td>Advisory services</td><td>(13,862)</td><td>(12,848)</td></tr><tr><td>Leases</td><td>(3,653)</td><td>(4,556)</td></tr><tr><td>Insurance</td><td>(2,553)</td><td>(1,758)</td></tr><tr><td>Office expenses</td><td>(7,327)</td><td>(8,165)</td></tr><tr><td>Contractors</td><td>(4,874)</td><td>(5,730)</td></tr><tr><td>Depreciation of Right-of-use Assets (contracts under IFRS 16)</td><td>(2,501)</td><td>-</td></tr><tr><td>Other expenses, by nature</td><td>(12,456)</td><td>(13,291)</td></tr><tr><td>Total</td><td>(117,180)</td><td>(118,126)</td></tr></table>



## 26.5 Other expenses

<table><tr><td rowspan="3">Other expenses by function</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Depreciation and amortization expense</td><td></td><td></td></tr><tr><td>Depreciation of assets not in use</td><td>(136)</td><td>(59)</td></tr><tr><td>Subtotal</td><td>(136)</td><td>(59)</td></tr><tr><td>Impairment losses (reversals of impairment losses) recognized in profit (loss) for the year</td><td></td><td></td></tr><tr><td>Property, plant and equipment</td><td>(49)</td><td>(1,390)</td></tr><tr><td>Intangible assets other than goodwill</td><td>(913)</td><td>(1,736)</td></tr><tr><td>Goodwill</td><td>(140)</td><td>(3,254)</td></tr><tr><td>Non-current assets and disowned groups held for sale</td><td>(607)</td><td>-</td></tr><tr><td>Subtotal</td><td>(1,709)</td><td>(6,380)</td></tr><tr><td>Other expenses, by nature</td><td></td><td></td></tr><tr><td>Legal expenses</td><td>(9,277)</td><td>(15,139)</td></tr><tr><td>VAT and other unrecoverable taxes</td><td>(613)</td><td>(1,187)</td></tr><tr><td>Fines paid</td><td>(145)</td><td>(965)</td></tr><tr><td>Investment plan expenses</td><td>(1,694)</td><td>(7,555)</td></tr><tr><td>Non-metallic exploration expenses</td><td>(5,537)</td><td>(5,864)</td></tr><tr><td>Donations</td><td>(5,026)</td><td>(4,502)</td></tr><tr><td>Reorganization of related businesses</td><td>-</td><td>6,000</td></tr><tr><td>Other operating expenses</td><td>(1,858)</td><td>(1,256)</td></tr><tr><td>Subtotal</td><td>(24,150)</td><td>(30,468)</td></tr><tr><td>Total</td><td>(25,995)</td><td>(36,907)</td></tr></table>

## 26.6 Other gains (losses)

<table><tr><td rowspan="3">Other income (expenses)</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Adjust previous year application method of participation</td><td>(984)</td><td>(664)</td></tr><tr><td>Impairment of interests in joint ventures</td><td>631</td><td>(8,802)</td></tr><tr><td>Sales of investments in associates</td><td>-</td><td>(759)</td></tr><tr><td>Sales of investments in joint ventures</td><td>-</td><td>14,507</td></tr><tr><td>Others</td><td>(30)</td><td>2,122</td></tr><tr><td>Total</td><td>(383)</td><td>6,404</td></tr></table>



## 26.7 Impairment of gains and reversal of impairment losses

<table><tr><td rowspan="2">Impairment of gains and reversal of impairment losses (impairment losses)</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>(Impairment) /reversion value of financial assets</td><td>(1,057)</td><td>2,967</td></tr><tr><td>Total</td><td>(1,057)</td><td>2,967</td></tr></table>

The following summary corresponds to the requirements of CMF and considers notes 26.2, 26.4 and 26.5

## 26.8 Summary of expenses by nature

<table><tr><td rowspan="3">Expenses by nature</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Raw materials and consumables</td><td>(271,912)</td><td>(260,869)</td></tr><tr><td>Classes of Employee Benefit Expenses</td><td>(238,748)</td><td>(267,451)</td></tr><tr><td>Depreciation and amortization expense</td><td></td><td></td></tr><tr><td>Depreciation expense</td><td>(188,293)</td><td>(212,700)</td></tr><tr><td>Depreciation of Right-of-use Assets</td><td>(7,951)</td><td>-</td></tr><tr><td>Property, plant and equipment</td><td>(49)</td><td>(1,390)</td></tr><tr><td>Goodwill</td><td>(140)</td><td>(3,254)</td></tr><tr><td>Non-current assets and disowned groups held for sale</td><td>(607)</td><td>-</td></tr><tr><td>Amortization expense</td><td>(6,020)</td><td>(8,127)</td></tr><tr><td>Legal expenses</td><td>(9,277)</td><td>(15,139)</td></tr><tr><td>Investment plan expenses</td><td>(20,061)</td><td>(19,415)</td></tr><tr><td>Non-metallic exploration expenses</td><td>(5,537)</td><td>(5,864)</td></tr><tr><td>Provision for site closure</td><td>(911)</td><td>(2,045)</td></tr><tr><td>Provision for materials, spare parts and supplies</td><td>(7,500)</td><td>1,721</td></tr><tr><td>Contractors</td><td>(127,970)</td><td>(126,653)</td></tr><tr><td>Leases</td><td>(50,660)</td><td>(41,801)</td></tr><tr><td>Mining concessions</td><td>(7,856)</td><td>(8,168)</td></tr><tr><td>Operation transport</td><td>(56,376)</td><td>(64,352)</td></tr><tr><td>Freight and product transport costs</td><td>(46,264)</td><td>(51,387)</td></tr><tr><td>Purchase of products from third parties</td><td>(189,583)</td><td>(182,695)</td></tr><tr><td>CORFO rights</td><td>(143,861)</td><td>(182,954)</td></tr><tr><td>Export costs</td><td>(97,103)</td><td>(107,418)</td></tr><tr><td>Expenses related to Variable Parts Leases (IFRS 16)</td><td>(1,096)</td><td>-</td></tr><tr><td>Insurance</td><td>(19,521)</td><td>(13,681)</td></tr><tr><td>Restructuring of joint ventures.</td><td>-</td><td>6,000</td></tr><tr><td>Consultant and advisor services</td><td>(13,862)</td><td>(12,848)</td></tr><tr><td>Variation in inventory</td><td>52,557</td><td>20,597</td></tr><tr><td>Variation in provision on product inventory</td><td>17,107</td><td>(8,997)</td></tr><tr><td>Other expenses</td><td>(85,284)</td><td>(71,774)</td></tr><tr><td>Total expenses by nature</td><td>(1,526,778)</td><td>(1,640,664)</td></tr></table>



## 26.9 Finance expenses

<table><tr><td rowspan="3">Financial costs</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Interest expense from bank borrowings and overdrafts</td><td>(2,133)</td><td>(1,707)</td></tr><tr><td>Interest expense from bonds</td><td>(72,983)</td><td>(55,887)</td></tr><tr><td>Interest expense from loans</td><td>(2,682)</td><td>(3,093)</td></tr><tr><td>Capitalized interest expenses</td><td>7,841</td><td>5,021</td></tr><tr><td>Financial expenses for site closure</td><td>(4,417)</td><td>(960)</td></tr><tr><td>Lease interest</td><td>(1,535)</td><td>-</td></tr><tr><td>Other finance costs</td><td>(1,030)</td><td>(1,181)</td></tr><tr><td>Total</td><td>(76,939)</td><td>(57,807)</td></tr></table>



## Note 27 Reportable segments

## 27.1 Reportable segments

## (a) General information:

The amount of each item presented in each operating segment is equal to that reported to the highest authority that makes decisions regarding the operation, in order to decide on the allocation of resources to the defined segments and to assess its performance.

These operating segments mentioned are consistent with the way the Company is managed and how results will be reported by the Company. These segments reflect separate operating results that are regularly reviewed by the executive responsible for operational decisions in order to make decisions about the resources to be allocated to the segment and assess its performance (See Note 27.2).

The performance of each segment is measured based on net income and revenues. Inter-segment sales are made using terms and conditions at current market rates.

## (b) Factors used to identify segments on which a report should be presented:

The segments covered in the report are strategic business units that offer different products and services. These are managed separately because each business requires different technology and marketing strategies.

(c) Description of the types of products and services from which each reportable segment obtains its income from ordinary activities

The operating segments, which obtain income from ordinary activities, generate expenses and have its operating results reviewed on a regular basis by the highest authority who makes decisions regarding operations, relate to the following groups of products:

1. Specialty plant nutrients

2. Iodine and its derivatives

3. Lithium and its derivatives

4. Industrial chemicals

5. Potassium

6. Other products and services

## (d) Description of income sources for all the other segments

Information regarding assets, liabilities, profits and expenses that cannot be assigned to the segments indicated above, due to the nature of production processes, is included under the "Unallocated amounts" category of the disclosed information.



## (e) Basis of accounting for transactions between reportable segments

Inter-segment sales are made under the same conditions as sales to third parties and are measured consistently as presented in the statement of income.

(f) Description of the nature of the differences between measurements of results of reportable segments and the result of the entity before the expense or income tax expense of incomes and discontinued operations

The information reported in the segments is extracted from the Company’s consolidated financial statements and therefore there is no need to prepare reconciliations between the data mentioned above and those reported in the respective segments, according to what is stated in paragraph 28 of IFRS 8, "Operating Segments".

For the allocation of inventory valuation costs, we identify the direct expenses (can be directly allocated to products) and the common expenses (belong to coproduction processes, for example common leaching expenses for production of Iodine and Nitrates), Direct costs are directly allocated to the product and the common costs are distributed according to percentages that consider different variables in their determination, such as margins, rotation of inventories, revenue, production and etc.

The allocation of other common costs that are not included in the inventory valuation process, but go straight to the cost of sales, use similar criteria: the costs associated with a product or sales in particular are assigned to that particular product or sales, and the common costs associated with different products or business lines are allocated according to the sales.

(g) Description of the nature of the differences between measurements of assets of reportable segments and the Company’s assets

Assets are not shown classified by segments, as this information is not readily available. Some of these assets are not separable by the type of activity by which they are affected since this information is not used by management in decision-making with respect to resources to be allocated to each defined segment. All assets are disclosed in the "unallocated amounts" category.

(h) Description of the nature of the differences between measurements of liabilities of reportable segments and the Company’s liabilities

Liabilities are not shown classified by segments, as this information is not readily available. Some of these liabilities are not separable by the type of activity by which they are affected, since this information is not used by management in decision-making regarding resources to be allocated to each defined segment. All liabilities are disclosed in the "unallocated amounts" category.



## 27.2 Reportable segment disclosures:

<table><tr><td>Operating segments for the year ended December 31, 2019</td><td>Specialty plant nutrients</td><td>Iodine and its derivatives</td><td>Lithium and its derivatives</td><td>Industrial chemicals</td><td>Potassium</td><td>Other products and services</td><td>Reportable segments</td><td>Operating segments</td><td>Unallocated amounts</td><td>Total as of December 31, 2019</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS$</td><td>ThUS\)</td></tr><tr><td>Revenue</td><td>723,920</td><td>371,020</td><td>505,714</td><td>94,875</td><td>212,151</td><td>35,975</td><td>1,943,655</td><td>1,943,655</td><td>-</td><td>1,943,655</td></tr><tr><td>Revenues from transactions with other operating segments of the same entity</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td>-</td><td>-</td></tr><tr><td>Revenues</td><td>723,920</td><td>371,020</td><td>505,714</td><td>94,875</td><td>212,151</td><td>35,975</td><td>1,943,655</td><td>1,943,655</td><td>-</td><td>1,943,655</td></tr><tr><td>Costs of sales</td><td>(573,808)</td><td>(230,468)</td><td>(306,250)</td><td>(63,590)</td><td>(176,199)</td><td>(33,288)</td><td>(1,383,603)</td><td>(1,383,603)</td><td>-</td><td>(1,383,603)</td></tr><tr><td>Administrative expenses</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(117,180)</td><td>(117,180)</td><td>(117,180)</td></tr><tr><td>Interest expense</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(76,939)</td><td>(76,939)</td><td>(76,939)</td></tr><tr><td>Depreciation and amortization expense</td><td>(68,007)</td><td>(43,533)</td><td>(45,443)</td><td>(6,885)</td><td>(37,862)</td><td>(534)</td><td>(202,264)</td><td>(202,264)</td><td>-</td><td>(202,264)</td></tr><tr><td>The entity&#x27;s interest in the profit or loss of associates and joint ventures accounted for by the equity method</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>9,786</td><td>9,786</td><td>9,786</td></tr><tr><td>Income tax expense, continuing operations</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(110,019)</td><td>(110,019)</td><td>(110,019)</td></tr><tr><td>Income (loss) before taxes</td><td>150,112</td><td>140,552</td><td>199,464</td><td>31,285</td><td>35,952</td><td>2,687</td><td>560,052</td><td>560,052</td><td>(169,430)</td><td>390,622</td></tr><tr><td>Net income (loss) from continuing operations</td><td>150,112</td><td>140,552</td><td>199,464</td><td>31,285</td><td>35,952</td><td>2,687</td><td>560,052</td><td>560,052</td><td>(279,449)</td><td>280,603</td></tr><tr><td>Net income (loss) from discontinued operations</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(279,449)</td><td>-</td><td>-</td></tr><tr><td>Net income (loss)</td><td>150,112</td><td>140,552</td><td>199,464</td><td>31,285</td><td>35,952</td><td>2,687</td><td>560,052</td><td>560,052</td><td>(279,449)</td><td>280,603</td></tr><tr><td>Assets</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>4,684,151</td><td>4,684,151</td><td>-</td></tr><tr><td>Equity-accounted investees</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>109,435</td><td>109,435</td><td>-</td></tr><tr><td>Incorporation of non-current assets other than financial instruments, deferred tax assets, net defined benefit assets and rights arising from insurance contracts</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>124,569</td><td>124,569</td><td>-</td></tr><tr><td>Increase of non-current assets</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td>-</td><td>-</td></tr><tr><td>Liabilities</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>2,549,679</td><td>2,549,679</td><td>-</td></tr><tr><td>Impairment loss recognized in profit or loss</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(1,057)</td><td>(1,057)</td><td>-</td></tr><tr><td>Reversal of impairment losses recognized in profit or loss for the period</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td>-</td><td>-</td></tr><tr><td>Cash flows from (used in) operating activities</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>426,971</td><td>426,971</td><td>-</td></tr><tr><td>Cash flows from (used in) investing activities</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(485,471)</td><td>(485,471)</td><td>-</td></tr><tr><td>Cash flows from (used in) financing activities</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>105,896</td><td>105,896</td><td>-</td></tr></table>



<table><tr><td rowspan="2">Operating segments for the year ended December 31, 2018</td><td>Specialty plant nutrients</td><td>Iodine and its derivatives</td><td>Lithium and its derivatives</td><td>Industrial chemicals</td><td>Potassium</td><td>Other products and services</td><td>Reportable segments</td><td>Operating segments</td><td>Unallocated amounts</td><td>Total as of December 31, 2018</td></tr><tr><td>ThuSS</td><td>ThuSS</td><td>ThuSS</td><td>ThuSS</td><td>ThuSS</td><td></td><td>ThuSS</td><td>ThuSS</td><td>ThuSS</td><td>ThuS</td></tr><tr><td>Revenue</td><td>781,751</td><td>324,972</td><td>734,801</td><td>108,267</td><td>267,474</td><td>48,538</td><td>2,265,803</td><td>2,265,803</td><td>-</td><td>2,265,803</td></tr><tr><td>Revenues from transactions with other operating segments of the same entity</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td>-</td><td>-</td></tr><tr><td>Revenues</td><td>781,751</td><td>324,972</td><td>734,801</td><td>108,267</td><td>267,474</td><td>48,538</td><td>2,265,803</td><td>2,265,803</td><td>-</td><td>2,265,803</td></tr><tr><td>Costs of sales</td><td>(613,267)</td><td>(217,464)</td><td>(316,875)</td><td>(72,964)</td><td>(217,386)</td><td>(47,675)</td><td>(1,485,631)</td><td>(1,485,631)</td><td>-</td><td>(1,485,631)</td></tr><tr><td>Administrative expenses</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(118,126)</td><td>(118,126)</td><td>(118,126)</td></tr><tr><td>Interest expense</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(57,807)</td><td>(57,807)</td><td>(57,807)</td></tr><tr><td>Depreciation and amortization expense</td><td>(79,061)</td><td>(42,438)</td><td>(42,283)</td><td>(8,454)</td><td>(47,940)</td><td>(651)</td><td>(220,827)</td><td>(220,827)</td><td>-</td><td>(220,827)</td></tr><tr><td>The entity&#x27;s interest in the profit or loss of associates and joint ventures accounted for by the equity method</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>6,351</td><td>6,351</td><td>6,351</td></tr><tr><td>Income tax expense, continuing operations</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(178,975)</td><td>(178,975)</td><td>(178,975)</td></tr><tr><td>Income (loss) before taxes</td><td>168,484</td><td>107,508</td><td>417,926</td><td>35,303</td><td>50,088</td><td>863</td><td>780,172</td><td>780,172</td><td>(159,134)</td><td>621,038</td></tr><tr><td>Net income (loss) from continuing operations</td><td>168,484</td><td>107,508</td><td>417,926</td><td>35,303</td><td>50,088</td><td>863</td><td>780,172</td><td>780,172</td><td>(338,109)</td><td>442,063</td></tr><tr><td>Net income (loss) from discontinued operations</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td>-</td><td>-</td></tr><tr><td>Net income (loss)</td><td>168,484</td><td>107,508</td><td>417,926</td><td>35,303</td><td>50,088</td><td>863</td><td>780,172</td><td>780,172</td><td>(338,109)</td><td>442,063</td></tr><tr><td>Assets</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Equity-accounted investees</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>4,268,094</td><td>4,268,094</td><td>4,268,094</td></tr><tr><td>Incorporation of non-current assets other than financial instruments, deferred tax assets, net defined benefit assets and rights arising from insurance contracts</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>111,549</td><td>111,549</td><td>111,549</td></tr><tr><td>Increase of non-current assets</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(15,028)</td><td>(15,028)</td><td>(15,028)</td></tr><tr><td>Liabilities</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Impairment loss recognized in profit or loss</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>2,130,292</td><td>2,130,292</td><td>2,130,292</td></tr><tr><td>Reversal of impairment losses recognized in profit or loss for the period</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>2,967</td><td>2,967</td><td>2,967</td></tr><tr><td>Cash flows from (used in) operating activities</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td><td></td><td></td></tr><tr><td>Cash flows from (used in) investing activities</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>524,839</td><td>524,839</td><td>524,839</td></tr><tr><td>Cash flows from (used in) financing activities</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(187,004)</td><td>(187,004)</td><td>(187,004)</td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>(387,313)</td><td>(387,313)</td><td>(387,313)</td></tr></table>



## 27.3 Statement of comprehensive income classified by reportable segments based on groups of products

<table><tr><td>Items in the statement of comprehensive income as of December 31, 2019</td><td>Specialty plant nutrients</td><td>Iodine and its derivatives</td><td>Lithium and its derivatives</td><td>Industrial chemicals</td><td>Potassium</td><td>Other products and services</td><td>Corporate Unit</td><td>Total segments and Corporate unit</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td></tr><tr><td>Revenue</td><td>723,920</td><td>371,020</td><td>505,714</td><td>94,875</td><td>212,151</td><td>35,975</td><td>-</td><td>1,943,655</td></tr><tr><td>Cost of sales</td><td>(573,808)</td><td>(230,468)</td><td>(306,250)</td><td>(63,590)</td><td>(176,199)</td><td>(33,288)</td><td>-</td><td>(1,383,603)</td></tr><tr><td>Gross profit</td><td>150,112</td><td>140,552</td><td>199,464</td><td>31,285</td><td>35,952</td><td>2,687</td><td>-</td><td>560,052</td></tr><tr><td>Other incomes by function</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>18,218</td><td>18,218</td></tr><tr><td>Administrative expenses</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(117,180)</td><td>(117,180)</td></tr><tr><td>Other expenses by function</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(25,995)</td><td>(25,995)</td></tr><tr><td>Impairment of gains and review of impairment losses (impairment losses) determined in accordance with IFRS 9</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(1,057)</td><td>(1,057)</td></tr><tr><td>Other gains (losses)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(383)</td><td>(383)</td></tr><tr><td>Financial income</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>26,289</td><td>26,289</td></tr><tr><td>Financial costs</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(76,939)</td><td>(76,939)</td></tr><tr><td>interest in the profit or loss of associates and joint ventures accounted for by the equity method</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>9,786</td><td>9,786</td></tr><tr><td>Exchange differences</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(2,169)</td><td>(2,169)</td></tr><tr><td>Profit (loss) before taxes</td><td>150,112</td><td>140,552</td><td>199,464</td><td>31,285</td><td>35,952</td><td>2,687</td><td>(169,430)</td><td>390,622</td></tr><tr><td>Income tax expense</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(110,019)</td><td>(110,019)</td></tr><tr><td>Profit (loss) from continuing operations</td><td>150,112</td><td>140,552</td><td>199,464</td><td>31,285</td><td>35,952</td><td>2,687</td><td>(279,449)</td><td>280,603</td></tr><tr><td>Profit (loss) from discontinued operations</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>&lt;nl&gt;</td></tr><tr><td>Profit (loss)</td><td>150,112</td><td>140,552</td><td>199,464</td><td>31,285</td><td>35,952</td><td>2,687</td><td>(279,449)</td><td>280,603</td></tr><tr><td>Profit (loss), attributable to</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Profit (loss) attributable to the controller&#x27;s owners</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>278,115</td><td>278,115</td></tr><tr><td>Profit (loss) attributable to the non-controllers</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>2,488</td><td>2,488</td></tr><tr><td>Profit (loss)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>280,603</td><td>280,603</td></tr></table>



<table><tr><td>Items in the statement of comprehensive income as of December 31, 2018</td><td>Specialty plant nutrients</td><td>Iodine and its derivatives</td><td>Lithium and its derivatives</td><td>Industrial chemicals</td><td>Potassium</td><td>Other products and services</td><td>Corporate Unit</td><td>Total segments and Corporate unit</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td></tr><tr><td>Revenue</td><td>781,751</td><td>324,972</td><td>734,801</td><td>108,267</td><td>267,474</td><td>48,538</td><td>-</td><td>2,265,803</td></tr><tr><td>Cost of sales</td><td>(613,267)</td><td>(217,464)</td><td>(316,875)</td><td>(72,964)</td><td>(217,386)</td><td>(47,675)</td><td>-</td><td>(1,485,631)</td></tr><tr><td>Gross profit</td><td>168,484</td><td>107,508</td><td>417,926</td><td>35,303</td><td>50,088</td><td>863</td><td>-</td><td>780,172</td></tr><tr><td>Other incomes by function</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>32,048</td><td>32,048</td></tr><tr><td>Administrative expenses</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(118,126)</td><td>(118,126)</td></tr><tr><td>Other expenses by function</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(36,907)</td><td>(36,907)</td></tr><tr><td>Impairment of gains and review of impairment losses (impairment losses) determined in accordance with IFRS 9</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>2,967</td><td>2,967</td></tr><tr><td>Other gains (losses)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>6,404</td><td>6,404</td></tr><tr><td>Financial income</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>22,533</td><td>22,533</td></tr><tr><td>Financial costs</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(57,807)</td><td>(57,807)</td></tr><tr><td>interest in the profit or loss of associates and joint ventures accounted for by the equity method</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>6,351</td><td>6,351</td></tr><tr><td>Exchange differences</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(16,597)</td><td>(16,597)</td></tr><tr><td>Profit (loss) before taxes</td><td>169,484</td><td>107,508</td><td>417,926</td><td>35,303</td><td>50,088</td><td>863</td><td>(158,134)</td><td>(62,038)</td></tr><tr><td>Income tax expense</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(178,975)</td><td>(178,975)</td></tr><tr><td>Profit (loss) from continuing operations</td><td>168,484</td><td>107,508</td><td>417,926</td><td>35,303</td><td>50,088</td><td>863</td><td>(338,109)</td><td>442,063</td></tr><tr><td>Profit (loss) from discontinued operations</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td></td></tr><tr><td>Profit (loss)</td><td>168,484</td><td>107,508</td><td>417,926</td><td>35,303</td><td>50,088</td><td>863</td><td>(338,109)</td><td>442,063</td></tr><tr><td>Profit (loss), attributable to</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Profit (loss) attributable to the controller&#x27;s owners</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>439,830</td><td>439,830</td></tr><tr><td>Profit (loss) attributable to the non-controllers</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>2,233</td><td>2,233</td></tr><tr><td>Profit (loss)</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>442,063</td><td>442,063</td></tr></table>



## 27.4 Disclosures on geographical areas

As indicated in paragraph 33 of IFRS 8, the entity discloses geographical information on its revenue from operating activities with external customers and from non-current assets that are not financial instruments, deferred income tax assets, assets related to post-employment benefits or rights derived from insurance contracts.

## 27.5 Disclosures on main customers

With respect to the degree of dependency of the Company on its customers, in accordance with paragraph 34 of IFRS 8, the Company has no external customers who individually represent 10% or more of its revenue. Credit risk concentrations with respect to trade and other accounts receivable are limited due to the significant number of entities in the Company’s portfolio and its worldwide distribution. The Company’s policy requires guarantees (such as letters of credit, guarantee clauses and others) and/or to maintain insurance policies for certain accounts as deemed necessary by the Company’s Management.



## 27.6 Segments by geographical areas

<table><tr><td>Items as of December 31, 2019</td><td>Chile</td><td>Latin America and the Caribbean</td><td>Europe</td><td>North America</td><td>Asia and others</td><td>Total</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\(</td></tr><tr><td>Revenue</td><td>211,857</td><td>161,928</td><td>393,764</td><td>451,272</td><td>724,834</td><td>1,943,655</td></tr><tr><td>Investment accounted for under the equity method</td><td>-</td><td>(5,175)</td><td>42,243</td><td>14,669</td><td>57,698</td><td>109,435</td></tr><tr><td>Intangible assets other than goodwill</td><td>106,910</td><td>420</td><td>1,397</td><td>2,683</td><td>76,948</td><td>188,358</td></tr><tr><td>Goodwill</td><td>23,205</td><td>-</td><td>11,521</td><td>-</td><td>-</td><td>34,726</td></tr><tr><td>Property, plant and equipment, net</td><td>1,559,080</td><td>513</td><td>6,241</td><td>8,333</td><td>32,903</td><td>1,607,070</td></tr><tr><td>Other non-current assets</td><td>20,321</td><td>28</td><td>4</td><td>(624)</td><td>-</td><td>19,729</td></tr><tr><td>Non-current assets</td><td>1,709,516</td><td>(4,214)</td><td>61,406</td><td>25,061</td><td>167,549</td><td>1,959,318</td></tr></table>

<table><tr><td>Items as of December 31, 2018</td><td>Chile</td><td>Latin America and the Caribbean</td><td>Europe</td><td>North America</td><td>Asia and others</td><td>Total</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\(</td></tr><tr><td>Revenue</td><td>189,349</td><td>180,189</td><td>479,664</td><td>471,515</td><td>945,086</td><td>2,265,803</td></tr><tr><td>Investment accounted for under the equity method</td><td>(6,588)</td><td>-</td><td>61,256</td><td>16,115</td><td>40,766</td><td>111,549</td></tr><tr><td>Intangible assets other than goodwill</td><td>110,544</td><td>1,215</td><td>238</td><td>152</td><td>77,201</td><td>189,350</td></tr><tr><td>Goodwill</td><td>22,535</td><td>86</td><td>11,521</td><td>724</td><td>-</td><td>34,866</td></tr><tr><td>Property, plant and equipment, net</td><td>1,445,349</td><td>347</td><td>4,451</td><td>3,098</td><td>1,578</td><td>1,454,823</td></tr><tr><td>Other non-current assets</td><td>17,111</td><td>23</td><td>-</td><td>(892)</td><td>11,297</td><td>27,539</td></tr><tr><td>Non-current assets</td><td>1,588,951</td><td>1,671</td><td>77,466</td><td>19,197</td><td>130,842</td><td>1,818,127</td></tr></table>



## 27.7 Property, plant and equipment classified by geographical areas

The company's main production facilities are located near their mines and extraction facilities in northern Chile. The following table presents the main production facilities as of December 31, 2019 and December 31, 2018:

<table><tr><td>Location</td><td>Products</td></tr><tr><td>- Pedro de Valdivia</td><td>: Production of iodine and nitrate salts</td></tr><tr><td>- María Elena</td><td>: Production of iodine and nitrate salts</td></tr><tr><td>- Coya Sur</td><td>: Production of nitrate salts</td></tr><tr><td>- Nueva Victoria</td><td>: Production of iodine and nitrate salts</td></tr><tr><td>- Salar de Atacama</td><td>: Potassium chloride, lithium chloride, boric acid and potassium sulfate</td></tr><tr><td>- Salar del Carmen</td><td>: Production of lithium carbonate and lithium hydroxide</td></tr><tr><td>- Tocopilla</td><td>: Port facilities</td></tr></table>



## Note 28 Borrowing costs

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

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

## (a) Costs of capitalized interest, property, plant and equipment

The cost of capitalized interest is determined by applying the average or weighted average of all financing costs incurred by the Company to the monthly end balances of works-in-progress meeting the requirements of NIC 23.

Financing costs are not activated for periods that exceed the normal term for acquisition, construction or installation of the property; such is the case for delays, interruptions or temporary suspension of the project due to technical, financial or other problems that make it impossible to leave the property in usable conditions.

The rates and costs for capitalized interest of property, plant and equipment are detailed as follows:

<table><tr><td rowspan="2">Costs of capitalized interest</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Capitalization rate of costs for capitalized interest</td><td>4%</td><td>4%</td></tr><tr><td>Amount of costs for interest capitalized in ThUS$</td><td>7,841</td><td>5,021</td></tr></table>



## Note 29 Effect of fluctuations in foreign currency exchange rates

## a) Foreign currency exchange differences recognized in profit or loss and other comprehensive income:

<table><tr><td rowspan="2">Exchange rate differences recognized in income and other comprehensive income</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Conversion foreign exchange gains (losses) recognized in the result of the year.</td><td>(2,169)</td><td>(16,597)</td></tr><tr><td>Reserves for translation differences</td><td></td><td></td></tr><tr><td>Conversion foreign exchange reserves attributable to the owners of the controlling entity.</td><td>562</td><td>(1,394)</td></tr><tr><td>Conversion foreign exchange reserves attributable to the non-controlling entity.</td><td>226</td><td>174</td></tr><tr><td>Total</td><td>788</td><td>(1,220)</td></tr></table>

## b) Reserves for foreign currency exchange differences:

As of December 31, 2018 and 2017, foreign currency exchange differences are detailed as follows:

<table><tr><td rowspan="2">Detail</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Changes in equity generated by conversion of equity value:</td><td></td><td></td></tr><tr><td>Comercial Hydro S.A.</td><td>1,004</td><td>1,004</td></tr><tr><td>SQMC Internacional Ltda.</td><td>(9)</td><td>(17)</td></tr><tr><td>Proinsa Ltda.</td><td>(10)</td><td>(11)</td></tr><tr><td>Comercial Agrorama Ltda.</td><td>33</td><td>(21)</td></tr><tr><td>Isapre Norte Grande Ltda.</td><td>(44)</td><td>(1)</td></tr><tr><td>Almacenes y Depósitos Ltda.</td><td>142</td><td>113</td></tr><tr><td>Sacal S.A.</td><td>(3)</td><td>(3)</td></tr><tr><td>Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A.</td><td>(19)</td><td>(10)</td></tr><tr><td>Agrorama S.A.</td><td>231</td><td>132</td></tr><tr><td>Doktor Tarsa Tarim Sanayi AS</td><td>(13,811)</td><td>(13,811)</td></tr><tr><td>SQM Vitas Fzco.</td><td>(2,267)</td><td>(2,682)</td></tr><tr><td>Ajay Europe S.A.R.L.</td><td>(1,449)</td><td>(1,270)</td></tr><tr><td>SQM Eastmed Turkey</td><td>(155)</td><td>(113)</td></tr><tr><td>Doctochem Tarim Sanayai Ticaret LTD</td><td>7</td><td>-</td></tr><tr><td>Coromandel SQM India</td><td>(431)</td><td>(393)</td></tr><tr><td>SQM Italia SRL</td><td>(236)</td><td>(213)</td></tr><tr><td>SQM Oceania Pty Ltd.</td><td>(634)</td><td>(634)</td></tr><tr><td>SQM Indonesia S.A.</td><td>(124)</td><td>(124)</td></tr><tr><td>Abu Dhabi Fertillizers Industries WWL</td><td>372</td><td>(435)</td></tr><tr><td>SQM Vitas Holland</td><td>(197)</td><td>(170)</td></tr><tr><td>SQM Thailand Limited</td><td>(68)</td><td>(68)</td></tr><tr><td>SQM Europe N.V.</td><td>(1,983)</td><td>(1,983)</td></tr><tr><td>SQM Australia Pty Ltd.</td><td>(4,035)</td><td>(4,222)</td></tr><tr><td>Pavoni &amp; C. Spa</td><td>(185)</td><td>70</td></tr><tr><td>Terra Tarsa BV</td><td>116</td><td>(82)</td></tr><tr><td>Plantacote NV</td><td>(16)</td><td>(34)</td></tr><tr><td>Doktolab Tarim Arastirma San.</td><td>(54)</td><td>(29)</td></tr><tr><td>Kore Potash PLC (a)</td><td>(1,754)</td><td>(1,206)</td></tr><tr><td>SQM Colombia SAS</td><td>(166)</td><td>(94)</td></tr><tr><td>Total</td><td>(25,745)</td><td>(26,307)</td></tr></table>



## c) Functional and presentation currency

The functional currency of these companies corresponds to the currency of the country of origin of each entity, and its presentation currency is the U.S. dollar.

d) Reasons to use one presentation currency and a different functional currency

- The total revenues of these subsidiaries are associated with the local currency.

- The commercialization cost structure of these companies is affected by the local currency.



## Note 30 Disclosures on the effects of fluctuations in foreign currency exchange rates

Assets held in foreign currency subject to fluctuations in exchange rates are detailed as follows:

<table><tr><td rowspan="2">Class of assets</td><td rowspan="2">Currency</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Cash and cash equivalents</td><td>USD</td><td>558,572</td><td>353,674</td></tr><tr><td>Cash and cash equivalents</td><td>ARS</td><td>3</td><td>2</td></tr><tr><td>Cash and cash equivalents</td><td>CLP</td><td>8,240</td><td>157,500</td></tr><tr><td>Cash and cash equivalents</td><td>CNY</td><td>2,484</td><td>2,305</td></tr><tr><td>Cash and cash equivalents</td><td>EUR</td><td>3,131</td><td>4,738</td></tr><tr><td>Cash and cash equivalents</td><td>GBP</td><td>3</td><td>-</td></tr><tr><td>Cash and cash equivalents</td><td>AUD</td><td>8,492</td><td>29,598</td></tr><tr><td>Cash and cash equivalents</td><td>INR</td><td>6</td><td>-</td></tr><tr><td>Cash and cash equivalents</td><td>MXN</td><td>2,103</td><td>1,242</td></tr><tr><td>Cash and cash equivalents</td><td>PEN</td><td>4</td><td>1</td></tr><tr><td>Cash and cash equivalents</td><td>AED</td><td>-</td><td>1</td></tr><tr><td>Cash and cash equivalents</td><td>JPY</td><td>1,559</td><td>1,786</td></tr><tr><td>Cash and cash equivalents</td><td>ZAR</td><td>3,929</td><td>5,219</td></tr><tr><td>Cash and cash equivalents</td><td>IDR</td><td>3</td><td>-</td></tr><tr><td>Cash and cash equivalents</td><td>PLN</td><td>1</td><td>-</td></tr><tr><td>Subtotal cash and cash equivalents</td><td></td><td>588,530</td><td>556,066</td></tr><tr><td>Other current financial assets</td><td>USD</td><td>127,889</td><td>291,790</td></tr><tr><td>Other current financial assets</td><td>CLF</td><td>36,896</td><td>-</td></tr><tr><td>Other current financial assets</td><td>CLP</td><td>340,705</td><td>20,931</td></tr><tr><td>Subtotal other current financial assets</td><td></td><td>505,490</td><td>312,721</td></tr><tr><td>Other current non-financial assets</td><td>USD</td><td>16,535</td><td>19,523</td></tr><tr><td>Other current non-financial assets</td><td>ARS</td><td>-</td><td>2</td></tr><tr><td>Other current non-financial assets</td><td>AUD</td><td>285</td><td>102</td></tr><tr><td>Other current non-financial assets</td><td>BRL</td><td>2</td><td>-</td></tr><tr><td>Other current non-financial assets</td><td>CLF</td><td>31</td><td>47</td></tr><tr><td>Other current non-financial assets</td><td>CLP</td><td>24,374</td><td>20,276</td></tr><tr><td>Other current non-financial assets</td><td>CNY</td><td>326</td><td>8</td></tr><tr><td>Other current non-financial assets</td><td>EUR</td><td>3,055</td><td>3,153</td></tr><tr><td>Other current non-financial assets</td><td>MXN</td><td>2,629</td><td>3,274</td></tr><tr><td>Other current non-financial assets</td><td>THB</td><td>22</td><td>19</td></tr><tr><td>Other current non-financial assets</td><td>JPY</td><td>174</td><td>21</td></tr><tr><td>Other current non-financial assets</td><td>ZAR</td><td>3,119</td><td>1,547</td></tr><tr><td>Subtotal other current non-financial assets</td><td></td><td>50,552</td><td>47,972</td></tr><tr><td>Trade and other receivables</td><td>USD</td><td>225,554</td><td>255,528</td></tr><tr><td>Trade and other receivables</td><td>PEN</td><td>6</td><td>-</td></tr><tr><td>Trade and other receivables</td><td>BRL</td><td>19</td><td>20</td></tr><tr><td>Trade and other receivables</td><td>CLF</td><td>504</td><td>453</td></tr><tr><td>Trade and other receivables</td><td>CLP</td><td>56,023</td><td>71,730</td></tr><tr><td>Trade and other receivables</td><td>CNY</td><td>3,340</td><td>11,361</td></tr><tr><td>Trade and other receivables</td><td>EUR</td><td>24,925</td><td>31,426</td></tr><tr><td>Trade and other receivables</td><td>GBP</td><td>148</td><td>-</td></tr><tr><td>Trade and other receivables</td><td>MXN</td><td>211</td><td>452</td></tr><tr><td>Trade and other receivables</td><td>AED</td><td>1,193</td><td>15,841</td></tr><tr><td>Trade and other receivables</td><td>THB</td><td>1,695</td><td>2,970</td></tr><tr><td>Trade and other receivables</td><td>JPY</td><td>66,266</td><td>76,267</td></tr><tr><td>Trade and other receivables</td><td>AUD</td><td>801</td><td>-</td></tr><tr><td>Trade and other receivables</td><td>ZAR</td><td>15,900</td><td>571</td></tr><tr><td>Trade and other receivables</td><td>COP</td><td>2,557</td><td>-</td></tr><tr><td>Subtotal trade and other receivables</td><td></td><td>399,142</td><td>466,619</td></tr><tr><td>Receivables from related parties</td><td>USD</td><td>60,135</td><td>42,685</td></tr><tr><td>Receivables from related parties</td><td>EUR</td><td>1,092</td><td>105</td></tr><tr><td>Subtotal receivables from related parties</td><td></td><td>61,227</td><td>42,790</td></tr><tr><td>Current inventories</td><td>USD</td><td>983,338</td><td>913,674</td></tr><tr><td>Subtotal Current inventories</td><td></td><td>983,338</td><td>913,674</td></tr></table>



Assets held in foreign currency subject to fluctuations in exchange rates are detailed as follows:

<table><tr><td rowspan="2">Class of assets</td><td rowspan="2">Currency</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Current tax assets</td><td>USD</td><td>87,509</td><td>52,033</td></tr><tr><td>Current tax assets</td><td>ARS</td><td>1</td><td>2</td></tr><tr><td>Current tax assets</td><td>CLP</td><td>1,623</td><td>601</td></tr><tr><td>Current tax assets</td><td>EUR</td><td>61</td><td>3,500</td></tr><tr><td>Current tax assets</td><td>MXN</td><td>1,806</td><td>843</td></tr><tr><td>Current tax assets</td><td>PEN</td><td>-</td><td>131</td></tr><tr><td>Current tax assets</td><td>ZAR</td><td>139</td><td>-</td></tr><tr><td>Current tax assets</td><td>COP</td><td>294</td><td>-</td></tr><tr><td>Subtotal current tax assets</td><td></td><td>91,433</td><td>57,110</td></tr><tr><td>Non-current assets or groups of assets classified as held for sale</td><td>USD</td><td>2,454</td><td>1,430</td></tr><tr><td>Subtotal Non-current assets or groups of assets classified as held for sale</td><td></td><td>2,454</td><td>1,430</td></tr><tr><td>Total current assets</td><td></td><td>2,682,166</td><td>2,398,382</td></tr><tr><td>Non-current assets</td><td></td><td></td><td></td></tr><tr><td>Other non-current financial assets</td><td>USD</td><td>8,687</td><td>17,039</td></tr><tr><td>Other non-current financial assets</td><td>CLP</td><td>20</td><td>20</td></tr><tr><td>Other non-current financial assets</td><td>JPY</td><td>71</td><td>72</td></tr><tr><td>Subtotal Other non-current financial assets</td><td></td><td>8,778</td><td>17,131</td></tr><tr><td>Other non-current non-financial assets</td><td>USD</td><td>19,101</td><td>26,758</td></tr><tr><td>Other non-current non-financial assets</td><td>BRL</td><td>22</td><td>23</td></tr><tr><td>Other non-current non-financial assets</td><td>COP</td><td>6</td><td>-</td></tr><tr><td>Other non-current non-financial assets</td><td>EUR</td><td>4</td><td>-</td></tr><tr><td>Other non-current non-financial assets</td><td>CLP</td><td>596</td><td>758</td></tr><tr><td>Subtotal Other non-current non-financial assets</td><td></td><td>19,729</td><td>27,539</td></tr><tr><td>Other receivables, non-current</td><td>USD</td><td>522</td><td>139</td></tr><tr><td>Other receivables, non-current</td><td>CLF</td><td>165</td><td>329</td></tr><tr><td>Other receivables, non-current</td><td>MXN</td><td>43</td><td>-</td></tr><tr><td>Other receivables, non-current</td><td>CLP</td><td>980</td><td>1,807</td></tr><tr><td>Subtotal Other receivables, non-current</td><td></td><td>1,710</td><td>2,275</td></tr><tr><td>Investments classified using the equity method of accounting</td><td>USD</td><td>57,777</td><td>41,923</td></tr><tr><td>Investments classified using the equity method of accounting</td><td>TRY</td><td>26,624</td><td>21,892</td></tr><tr><td>Investments classified using the equity method of accounting</td><td>AED</td><td>9,111</td><td>31,023</td></tr><tr><td>Investments classified using the equity method of accounting</td><td>EUR</td><td>14,315</td><td>14,929</td></tr><tr><td>Investments classified using the equity method of accounting</td><td>INR</td><td>1,568</td><td>1,729</td></tr><tr><td>Investments classified using the equity method of accounting</td><td>THB</td><td>40</td><td>53</td></tr><tr><td>Subtotal Investments classified using the equity method of accounting</td><td></td><td>109,435</td><td>111,549</td></tr><tr><td>Intangible assets other than goodwill</td><td>USD</td><td>185,951</td><td>189,265</td></tr><tr><td>Intangible assets other than goodwill</td><td>MXN</td><td>1,137</td><td>-</td></tr><tr><td>Intangible assets other than goodwill</td><td>CLP</td><td>136</td><td>85</td></tr><tr><td>Intangible assets other than goodwill</td><td>EUR</td><td>1,134</td><td>-</td></tr><tr><td>Subtotal intangible assets other than goodwill</td><td></td><td>188,358</td><td>189,350</td></tr><tr><td>Purchases goodwill, gross</td><td>USD</td><td>34,438</td><td>34,866</td></tr><tr><td>Purchases goodwill, gross</td><td>CLP</td><td>140</td><td>-</td></tr><tr><td>Purchases goodwill, gross</td><td>EUR</td><td>148</td><td>-</td></tr><tr><td>Subtotal Purchases goodwill, gross</td><td></td><td>34,726</td><td>34,866</td></tr><tr><td>Property, plant and equipment</td><td>USD</td><td>1,593,324</td><td>1,451,436</td></tr><tr><td>Property, plant and equipment</td><td>CLP</td><td>3,294</td><td>3,387</td></tr><tr><td>Property, plant and equipment</td><td>EUR</td><td>4,756</td><td>-</td></tr><tr><td>Property, plant and equipment</td><td>MXN</td><td>5,588</td><td>-</td></tr><tr><td>Property, plant and equipment</td><td>COP</td><td>108</td><td>-</td></tr><tr><td>Subtotal property, plant and equipment</td><td></td><td>1,607,070</td><td>1,454,823</td></tr><tr><td>Current tax assets, non-current</td><td>USD</td><td>32,179</td><td>32,179</td></tr><tr><td>Subtotal Current tax assets, non-current</td><td></td><td>32,179</td><td>32,179</td></tr><tr><td>Total non-current assets</td><td></td><td>2,001,985</td><td>1,869,712</td></tr><tr><td>Total assets</td><td></td><td>4,684,151</td><td>4,268,094</td></tr></table>



<table><tr><td rowspan="3">Current liabilities</td><td rowspan="3">Currency</td><td colspan="3">As of December 31, 2019</td><td colspan="3">As of December 31, 2018</td></tr><tr><td>Up to 90 days</td><td>91 days to 1 year</td><td>Total</td><td>Up to 90 days</td><td>91 days to 1 year</td><td>Total</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Current liabilities</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Other current financial liabilities</td><td>USD</td><td>20,582</td><td>258,388</td><td>278,970</td><td>12,471</td><td>4,464</td><td>16,935</td></tr><tr><td>Other current financial liabilities</td><td>CLF</td><td>19,518</td><td>323</td><td>19,841</td><td>342</td><td>6,256</td><td>6,598</td></tr><tr><td>Other current financial liabilities</td><td>BRL</td><td>11</td><td>-</td><td>11</td><td>52</td><td>-</td><td>52</td></tr><tr><td>Subtotal other current financial liabilities</td><td></td><td>40,111</td><td>258,711</td><td>298,822</td><td>12,865</td><td>10,720</td><td>23,585</td></tr><tr><td>Trade and other payables</td><td>USD</td><td>44,146</td><td>-</td><td>44,146</td><td>51,489</td><td>3</td><td>51,492</td></tr><tr><td>Trade and other payables</td><td>ARS</td><td>-</td><td>-</td><td>-</td><td>4,082</td><td>-</td><td>4,082</td></tr><tr><td>Trade and other payables</td><td>BRL</td><td>10</td><td>-</td><td>10</td><td>34</td><td>-</td><td>34</td></tr><tr><td>Trade and other payables</td><td>THB</td><td>53</td><td>-</td><td>53</td><td>65</td><td>-</td><td>65</td></tr><tr><td>Trade and other payables</td><td>CLP</td><td>73,703</td><td>17,108</td><td>90,811</td><td>69,789</td><td>-</td><td>69,789</td></tr><tr><td>Trade and other payables</td><td>EUR</td><td>58,538</td><td>5</td><td>58,543</td><td>36,439</td><td>-</td><td>36,439</td></tr><tr><td>Trade and other payables</td><td>GBP</td><td>17</td><td>-</td><td>17</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Trade and other payables</td><td>INR</td><td>1</td><td>-</td><td>1</td><td>1</td><td>-</td><td>1</td></tr><tr><td>Trade and other payables</td><td>MXN</td><td>5,122</td><td>-</td><td>5,122</td><td>7</td><td>-</td><td>7</td></tr><tr><td>Trade and other payables</td><td>PEN</td><td>5</td><td>-</td><td>5</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Trade and other payables</td><td>AUD</td><td>4,442</td><td>-</td><td>4,442</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Trade and other payables</td><td>ZAR</td><td>2,260</td><td>-</td><td>2,260</td><td>1,842</td><td>-</td><td>1,842</td></tr><tr><td>Trade and other payables</td><td>AED</td><td>188</td><td>-</td><td>188</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Trade and other payables</td><td>COP</td><td>192</td><td>-</td><td>192</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Subtotal trade and other payables</td><td></td><td>188,677</td><td>17,113</td><td>205,790</td><td>163,748</td><td>3</td><td>163,751</td></tr><tr><td>Trade payables due to related parties, current</td><td>USD</td><td>475</td><td>-</td><td>475</td><td>-</td><td>9</td><td>9</td></tr><tr><td>Subtotal Trade payables due to related parties, current</td><td></td><td>475</td><td>-</td><td>475</td><td>-</td><td>9</td><td>9</td></tr><tr><td>Other current provisions</td><td>USD</td><td>109,650</td><td>820</td><td>110,470</td><td>74,020</td><td>31,150</td><td>105,170</td></tr><tr><td>Other current provisions</td><td>ARS</td><td>7</td><td>-</td><td>7</td><td>-</td><td>13</td><td>13</td></tr><tr><td>Other current provisions</td><td>BRL</td><td>-</td><td>-</td><td>-</td><td>707</td><td>-</td><td>707</td></tr><tr><td>Other current provisions</td><td>CLP</td><td>82</td><td>-</td><td>82</td><td>-</td><td>64</td><td>64</td></tr><tr><td>Other current provisions</td><td>EUR</td><td>6</td><td>-</td><td>6</td><td>243</td><td>-</td><td>243</td></tr><tr><td>Subtotal other current provisions</td><td></td><td>109,745</td><td>820</td><td>110,565</td><td>74,970</td><td>31,227</td><td>106,197</td></tr><tr><td>Current tax liabilities</td><td>USD</td><td>2,863</td><td>14,994</td><td>17,857</td><td>-</td><td>41,612</td><td>41,612</td></tr><tr><td>Current tax liabilities</td><td>CLP</td><td>-</td><td>17</td><td>17</td><td>-</td><td>31</td><td>31</td></tr><tr><td>Current tax liabilities</td><td>BRL</td><td>-</td><td>-</td><td>-</td><td>-</td><td>3</td><td>3</td></tr><tr><td>Current tax liabilities</td><td>CNY</td><td>-</td><td>-</td><td>-</td><td>-</td><td>8</td><td>8</td></tr><tr><td>Current tax liabilities</td><td>EUR</td><td>-</td><td>-</td><td>-</td><td>4,548</td><td>1,000</td><td>5,548</td></tr><tr><td>Current tax liabilities</td><td>ZAR</td><td>-</td><td>-</td><td>-</td><td>-</td><td>201</td><td>201</td></tr><tr><td>Current tax liabilities</td><td>MXN</td><td>-</td><td>-</td><td>-</td><td>-</td><td>9</td><td>9</td></tr><tr><td>Subtotal current tax liabilities</td><td></td><td>2,863</td><td>15,011</td><td>17,874</td><td>4,548</td><td>42,864</td><td>47,412</td></tr></table>



<table><tr><td rowspan="3">Class of liability</td><td rowspan="3">Currency</td><td colspan="3">As of December 31, 2019</td><td colspan="3">As of December 31, 2018</td></tr><tr><td>Up to 90 days</td><td>91 days to 1 year</td><td>Total</td><td>Up to 90 days</td><td>91 days to 1 year</td><td>Total</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Provisions for employee benefits, current</td><td>USD</td><td>12,486</td><td>3,901</td><td>16,387</td><td>20,085</td><td>-</td><td>20,085</td></tr><tr><td>Subtotal Provisions for employee benefits, current</td><td></td><td>12,486</td><td>3,901</td><td>16,387</td><td>20,085</td><td>-</td><td>20,085</td></tr><tr><td>Other current non-financial liabilities</td><td>USD</td><td>117,136</td><td>154</td><td>117,290</td><td>176,506</td><td>2,489</td><td>178,995</td></tr><tr><td>Other current non-financial liabilities</td><td>THB</td><td>30</td><td>-</td><td>30</td><td>158</td><td>-</td><td>158</td></tr><tr><td>Other current non-financial liabilities</td><td>BRL</td><td>3</td><td>-</td><td>3</td><td>3</td><td>-</td><td>3</td></tr><tr><td>Other current non-financial liabilities</td><td>CLP</td><td>5,969</td><td>2,439</td><td>8,408</td><td>7,703</td><td>6,431</td><td>14,134</td></tr><tr><td>Other current non-financial liabilities</td><td>CNY</td><td>-</td><td>-</td><td>-</td><td>11</td><td>40</td><td>51</td></tr><tr><td>Other current non-financial liabilities</td><td>EUR</td><td>842</td><td>-</td><td>842</td><td>1,053</td><td>-</td><td>1,053</td></tr><tr><td>Other current non-financial liabilities</td><td>MXN</td><td>129</td><td>64</td><td>193</td><td>103</td><td>46</td><td>149</td></tr><tr><td>Other current non-financial liabilities</td><td>JPY</td><td>21</td><td>12</td><td>33</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Other current non-financial liabilities</td><td>PEN</td><td>70</td><td>-</td><td>70</td><td>70</td><td>-</td><td>70</td></tr><tr><td>Other current non-financial liabilities</td><td>ZAR</td><td>10</td><td>-</td><td>10</td><td>11</td><td>-</td><td>11</td></tr><tr><td>Other current non-financial liabilities</td><td>COP</td><td>20</td><td>-</td><td>20</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Subtotal other current non-financial liabilities</td><td></td><td>124,230</td><td>2,669</td><td>126,899</td><td>185,618</td><td>9,006</td><td>194,624</td></tr><tr><td>Total current liabilities</td><td></td><td>478,587</td><td>298,225</td><td>776,812</td><td>461,834</td><td>93,829</td><td>555,663</td></tr></table>

<table><tr><td rowspan="3">Class of liability</td><td rowspan="3">Currency</td><td colspan="6">As of December 31, 2019</td></tr><tr><td>1 to 2 years</td><td>2 to 3 years</td><td>3 to 4 years</td><td>4 to 5 years</td><td>Over 5 years</td><td>Total</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Non-current liabilities</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Other non-current financial liabilities</td><td>USD</td><td>89,896</td><td>42,336</td><td>313,749</td><td>13,749</td><td>647,258</td><td>1,106,988</td></tr><tr><td>Other non-current financial liabilities</td><td>CLF</td><td>-</td><td>-</td><td>-</td><td>-</td><td>411,938</td><td>411,938</td></tr><tr><td>Subtotal Other non-current financial liabilities</td><td></td><td>89,896</td><td>42,336</td><td>313,749</td><td>13,749</td><td>1,059,196</td><td>1,518,926</td></tr><tr><td>Other non-current provisions</td><td>USD</td><td>23,014</td><td>167</td><td>-</td><td>1,452</td><td>10,057</td><td>34,690</td></tr><tr><td>Subtotal Other non-current provisions</td><td></td><td>23,014</td><td>167</td><td>-</td><td>1,452</td><td>10,057</td><td>34,690</td></tr><tr><td>Deferred tax liabilities</td><td>USD</td><td>69,048</td><td>-</td><td>-</td><td>114,353</td><td>10</td><td>183,411</td></tr><tr><td>Subtotal Deferred tax liabilities</td><td></td><td>69,048</td><td>-</td><td>-</td><td>114,353</td><td>10</td><td>183,411</td></tr><tr><td>Provisions for employee benefits, non-current</td><td>USD</td><td>34,884</td><td>-</td><td>-</td><td>-</td><td>-</td><td>34,884</td></tr><tr><td>Provisions for employee benefits, non-current</td><td>CLP</td><td>519</td><td>-</td><td>-</td><td>-</td><td>-</td><td>519</td></tr><tr><td>Provisions for employee benefits, non-current</td><td>MXN</td><td>236</td><td>-</td><td>-</td><td>-</td><td>-</td><td>236</td></tr><tr><td>Provisions for employee benefits, non-current</td><td>JPY</td><td>201</td><td>-</td><td>-</td><td>-</td><td>-</td><td>201</td></tr><tr><td>Subtotal Provisions for employee benefits, non-current</td><td></td><td>35,840</td><td>-</td><td>-</td><td>-</td><td>-</td><td>35,840</td></tr><tr><td>Total non-current liabilities</td><td></td><td>217,798</td><td>42,503</td><td>313,769</td><td>129,554</td><td>1,069,263</td><td>1,772,867</td></tr><tr><td>Total liabilities</td><td></td><td></td><td></td><td></td><td></td><td></td><td>2,549,679</td></tr></table>



<table><tr><td rowspan="3">Class of liability</td><td rowspan="3">Currency</td><td colspan="6">As of December 31, 2018</td></tr><tr><td>1 to 2 years</td><td>2 to 3 years</td><td>3 to 4 years</td><td>4 to 5 years</td><td>Over 5 years</td><td>Total</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Non-current liabilities</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Other non-current financial liabilities</td><td>USD</td><td>249,869</td><td>80,903</td><td>297,994</td><td>-</td><td>247,798</td><td>876,564</td></tr><tr><td>Other non-current financial liabilities</td><td>CLF</td><td>-</td><td>-</td><td>-</td><td>-</td><td>453,818</td><td>453,818</td></tr><tr><td>Subtotal Other non-current financial liabilities</td><td></td><td>249,869</td><td>80,903</td><td>297,994</td><td>-</td><td>701,616</td><td>1,330,382</td></tr><tr><td>Other non-current provisions</td><td>USD</td><td>28,822</td><td>3,000</td><td>-</td><td>-</td><td>-</td><td>31,822</td></tr><tr><td>Subtotal Other non-current provisions</td><td></td><td>28,822</td><td>3,000</td><td>-</td><td>-</td><td>-</td><td>31,822</td></tr><tr><td>Deferred tax liabilities</td><td>USD</td><td>63,534</td><td>33,355</td><td>56,040</td><td>-</td><td>22,432</td><td>175,361</td></tr><tr><td>Subtotal Deferred tax liabilities</td><td></td><td>63,534</td><td>33,355</td><td>56,040</td><td>-</td><td>22,432</td><td>175,361</td></tr><tr><td>Provisions for employee benefits, non-current</td><td>USD</td><td>-</td><td>9,081</td><td>-</td><td>-</td><td>27,116</td><td>36,197</td></tr><tr><td>Provisions for employee benefits, non-current</td><td>CLP</td><td>-</td><td>-</td><td>-</td><td>-</td><td>521</td><td>521</td></tr><tr><td>Provisions for employee benefits, non-current</td><td>MXN</td><td>-</td><td>-</td><td>-</td><td>-</td><td>175</td><td>175</td></tr><tr><td>Provisions for employee benefits, non-current</td><td>YEN</td><td>-</td><td>-</td><td>-</td><td>-</td><td>171</td><td>171</td></tr><tr><td>Subtotal Provisions for employee benefits, non-current</td><td></td><td>-</td><td>9,081</td><td>-</td><td>-</td><td>27,983</td><td>37,064</td></tr><tr><td>Total non-current liabilities</td><td></td><td>342,225</td><td>126,339</td><td>354,034</td><td>-</td><td>752,031</td><td>1,574,629</td></tr><tr><td>Total liabilities</td><td></td><td></td><td></td><td></td><td></td><td></td><td>2,130,292</td></tr></table>



## Note 31 Income tax and deferred taxes

Accounts receivable from taxes as of December 31, 2019 and December 31, 2018, are as follows:

## 31.1 Current and non-current tax assets

## a) Current tax assets

<table><tr><td rowspan="2">Current tax assets</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Monthly provisional income tax payments, Chilean companies</td><td>47,283</td><td>21,172</td></tr><tr><td>Monthly provisional income tax payments, foreign companies</td><td>124</td><td>5,199</td></tr><tr><td>Corporate tax credits (1)</td><td>1,262</td><td>1,858</td></tr><tr><td>1st category tax absorbed by tax loss (2)</td><td>916</td><td>-</td></tr><tr><td>Taxes in recovery process</td><td>41,848</td><td>28,881</td></tr><tr><td>Total</td><td>91,433</td><td>57,110</td></tr></table>

## b) Non-current tax assets

<table><tr><td rowspan="2">Non-current tax assets</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Monthly provisional income tax payments, Chilean companies compensated by the specific tax on mining activity (Lithium)</td><td>6,398</td><td>6,398</td></tr><tr><td>Specific tax on mining activities (IEAM) paid by Lithium (on consignment)</td><td>25,781</td><td>25,781</td></tr><tr><td>Total</td><td>32,179</td><td>32,179</td></tr></table>

(1) These credits are available for Companies and are related to corporate tax payments in April of the following year. These credits include, among others, credits for training expenses (SENCE), credits for acquisition of fixed assets, donations and credits in Chile for taxes paid abroad.

(2) This concept corresponds to the absorption of the tax losses determined by the company at the end of the year, which must be attributed to the dividends received during the year.



## 31.2 Current tax liabilities

<table><tr><td rowspan="2">Current tax liabilities</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUSS</td><td>ThUSS</td></tr><tr><td>1st Category income tax</td><td>7,863</td><td>25,163</td></tr><tr><td>Foreign company income tax</td><td>9,944</td><td>21,097</td></tr><tr><td>Article 21 single tax</td><td>67</td><td>1,152</td></tr><tr><td>Total</td><td>17,874</td><td>47,412</td></tr></table>

Income tax is calculated based on the profit or loss for tax purposes that is applied to the effective tax rate applicable in Chile. As established by Law No. 20,780, a progressive income tax rate has been established, which is 27% from 2018.

The royalty is determined by applying the taxable rate to the net operating income obtained, according to the chart in force, the Company currently provisioned 5% for mining royalties that involve operations in the Salar de Atacama and 5.24% for caliche extraction operations.

The income tax rate for the main countries where the Company operates is presented below:

<table><tr><td rowspan="2">Country</td><td>Income tax</td><td>Income tax</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td>Spain</td><td>25%</td><td>25%</td></tr><tr><td>Belgium</td><td>29.58%</td><td>29.58%</td></tr><tr><td>Mexico</td><td>30%</td><td>30%</td></tr><tr><td>United States</td><td>21% + 6%</td><td>21% + 6%</td></tr><tr><td>South Africa</td><td>28%</td><td>28%</td></tr></table>



## 31.3 Income tax and deferred taxes

Assets and liabilities recognized in the statement of financial position are offset if and only if:

1 The Company has recognized legally before the tax authority the right to offset the amounts recognized in these entries; and

(b) Deferred income tax assets and liabilities are derived from income tax related to the same tax authority on:

(i) the same entity or tax subject; or

(ii) different entities or tax subjects who intend either to settle current fiscal assets and liabilities for their net amount, or to exercise tax assets and pay liabilities simultaneously in each of the future periods in which the Company expects to settle or recover significant amounts of deferred tax assets or liabilities.

Recognized deferred income tax assets are the income taxes that are to be recovered in future periods, related to:

a) deductible temporary differences.

b) the offsetting of losses obtained in prior periods and not yet subject to tax deduction; and

c) the offsetting of unused credits from prior periods.

The Company recognizes a deferred tax asset when there is certainty that these can be offset with tax income from subsequent periods, losses or fiscal credits not yet used, but solely as long as it is more likely than not that there will be tax earnings in the future against which to charge these losses or unused fiscal credits.

Recognized deferred tax liabilities refer to the amounts of income taxes payable in future periods related to taxable temporary differences.



## (a) Income tax assets and liabilities as of December 31, 2019 are detailed as follows:

<table><tr><td rowspan="3">Description of deferred tax assets and liabilities as of December 31, 2019</td><td colspan="2">Net liability position</td></tr><tr><td>Assets</td><td>Liabilities</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Unrealized loss</td><td>82,075</td><td>-</td></tr><tr><td>Property, plant and equipment and capitalized interest</td><td>-</td><td>(197,167)</td></tr><tr><td>Facility closure provision</td><td>7,313</td><td>-</td></tr><tr><td>Manufacturing expenses</td><td>-</td><td>(106,420)</td></tr><tr><td>Staff severance indemnities, unemployment insurance</td><td>-</td><td>(6,000)</td></tr><tr><td>Vacation accrual</td><td>5,591</td><td>-</td></tr><tr><td>Inventory provision</td><td>23,885</td><td>-</td></tr><tr><td>Materials provision</td><td>7,982</td><td>-</td></tr><tr><td>Forward</td><td>-</td><td>-</td></tr><tr><td>Employee benefits</td><td>2,689</td><td>-</td></tr><tr><td>Research and development expenses</td><td>-</td><td>(3,533)</td></tr><tr><td>Provision Accounts receivable</td><td>3,542</td><td>-</td></tr><tr><td>Provision for legal complaints and expenses</td><td>2,546</td><td>-</td></tr><tr><td>Loan approval expenses</td><td>-</td><td>(3,856)</td></tr><tr><td>Financial instruments recorded at market value</td><td>-</td><td>(1,287)</td></tr><tr><td>specific tax on mining activity</td><td>-</td><td>(1,357)</td></tr><tr><td>Tax loss benefit</td><td>2,296</td><td>-</td></tr><tr><td>Other</td><td>-</td><td>(2,021)</td></tr><tr><td>Foreign items (other)</td><td>311</td><td>-</td></tr><tr><td>Balances to date</td><td>138,230</td><td>(321,641)</td></tr><tr><td>Net balance</td><td></td><td>(183,411)</td></tr></table>



(b) Income tax assets and liabilities as of December 31, 2018 are detailed as follows

<table><tr><td rowspan="3">Description of deferred tax assets and liabilities as of December 31, 2018</td><td colspan="2">Net liability position</td></tr><tr><td>Assets</td><td>Liabilities</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Unrealized loss</td><td>75,832</td><td>-</td></tr><tr><td>Property, plant and equipment and capitalized interest</td><td>-</td><td>(196,843)</td></tr><tr><td>Facility closure provision</td><td>4,280</td><td>-</td></tr><tr><td>Manufacturing expenses</td><td>-</td><td>(103,760)</td></tr><tr><td>Staff severance indemnities, unemployment insurance</td><td>-</td><td>(5,679)</td></tr><tr><td>Vacation accrual</td><td>5,155</td><td>-</td></tr><tr><td>Inventory provision</td><td>28,155</td><td>-</td></tr><tr><td>Materials provision</td><td>6,239</td><td>-</td></tr><tr><td>Forward</td><td>2,169</td><td>-</td></tr><tr><td>Employee benefits</td><td>3,309</td><td>-</td></tr><tr><td>Research and development expenses</td><td>-</td><td>(2,216)</td></tr><tr><td>bad debt provisions</td><td>4,188</td><td>-</td></tr><tr><td>Provision for legal complaints and expenses</td><td>4,013</td><td>-</td></tr><tr><td>Loan approval expenses</td><td>-</td><td>(2,337)</td></tr><tr><td>Financial instruments recorded at market value</td><td>-</td><td>(976)</td></tr><tr><td>specific tax on mining activity</td><td>-</td><td>(3,278)</td></tr><tr><td>Tax loss benefit</td><td>1,124</td><td>-</td></tr><tr><td>Other</td><td>5,005</td><td>-</td></tr><tr><td>Foreign items (other)</td><td>259</td><td>-</td></tr><tr><td>Balances to date</td><td>139,728</td><td>(315,089)</td></tr><tr><td>Net balance</td><td></td><td>(175,361)</td></tr></table>



## (c) Reconciliation of changes in deferred tax liabilities (assets) as of December 31, 2019

<table><tr><td>Reconciliation of changes in deferred tax liabilities (assets) as of December 31, 2019</td><td>Deferred tax liability (asset) at beginning of period</td><td>Deferred tax expense (benefit) recognized in profit (loss) for the year</td><td>Deferred taxes related to items credited (charged) directly to equity</td><td>Total increases (decreases) in deferred tax liabilities (assets)</td><td>Deferred tax liability (asset) at end of period</td></tr><tr><td></td><td>THUS\(</td><td>THUS\)</td><td>THUS\(</td><td>THUS\)</td><td>THUS\(</td></tr><tr><td>Unrealized loss</td><td>(75,832)</td><td>(6,243)</td><td>-</td><td>(6,243)</td><td>(82,075)</td></tr><tr><td>Property, plant and equipment and capitalized interest</td><td>196,843</td><td>324</td><td>-</td><td>324</td><td>197,167</td></tr><tr><td>Facility closure provision</td><td>(4,280)</td><td>(3,033)</td><td>-</td><td>(3,033)</td><td>(7,313)</td></tr><tr><td>Manufacturing expenses</td><td>103,760</td><td>2,660</td><td>-</td><td>2,660</td><td>106,420</td></tr><tr><td>Staff severance indemnities, unemployment insurance</td><td>5,679</td><td>1,007</td><td>(686)</td><td>321</td><td>6,000</td></tr><tr><td>Vacation accrual</td><td>(5,155)</td><td>(436)</td><td>-</td><td>(436)</td><td>(5,591)</td></tr><tr><td>Inventory provision</td><td>(28,155)</td><td>4,270</td><td>-</td><td>4,270</td><td>(23,885)</td></tr><tr><td>Materials provision</td><td>(6,239)</td><td>(1,743)</td><td>-</td><td>(1,743)</td><td>(7,982)</td></tr><tr><td>Forward</td><td>(2,169)</td><td>(514)</td><td>2,683</td><td>2,169</td><td>-</td></tr><tr><td>Employee benefits</td><td>(3,309)</td><td>620</td><td>-</td><td>620</td><td>(2,689)</td></tr><tr><td>Research and development expenses</td><td>2,216</td><td>1,317</td><td>-</td><td>1,317</td><td>3,533</td></tr><tr><td>bad debt provisions</td><td>(4,188)</td><td>646</td><td>-</td><td>646</td><td>(3,542)</td></tr><tr><td>Provision for legal complaints and expenses</td><td>(4,013)</td><td>1,467</td><td>-</td><td>1,467</td><td>(2,546)</td></tr><tr><td>Loan approval expenses</td><td>2,337</td><td>1,519</td><td>-</td><td>1,519</td><td>3,856</td></tr><tr><td>Financial instruments recorded at market value</td><td>976</td><td>-</td><td>311</td><td>311</td><td>1,287</td></tr><tr><td>specific tax on mining activity</td><td>3,278</td><td>(1,905)</td><td>(16)</td><td>(1,921)</td><td>1,357</td></tr><tr><td>Tax loss benefit</td><td>(1,124)</td><td>(1,172)</td><td>-</td><td>(1,172)</td><td>(2,296)</td></tr><tr><td>Other</td><td>(5,005)</td><td>7,026</td><td>-</td><td>7,026</td><td>2,021</td></tr><tr><td>Foreign items (other)</td><td>(259)</td><td>(52)</td><td>-</td><td>(52)</td><td>(311)</td></tr><tr><td>Total temporary differences, unused losses and unused tax credits</td><td>175,361</td><td>5,758</td><td>2,292</td><td>8,050</td><td>183,411</td></tr></table>



(d) Reconciliation of changes in deferred tax liabilities (assets) as of December 31, 2018

<table><tr><td>Reconciliation of changes in deferred tax liabilities (assets) as of December 31, 2018</td><td>Deferred tax liability (asset) at beginning of period</td><td>Deferred tax expense (benefit) recognized in profit (loss) for the year</td><td>Deferred taxes related to items credited (charged) directly to equity</td><td>Total increases (decreases) in deferred tax liabilities (assets)</td><td>Deferred tax liability (asset) at end of period</td></tr><tr><td></td><td>ThUSS</td><td>ThUSS</td><td>ThUSS</td><td>ThUSS</td><td>ThUSS</td></tr><tr><td>Unrealized loss</td><td>(68,544)</td><td>(7,288)</td><td>-</td><td>(7,288)</td><td>(75,832)</td></tr><tr><td>Property, plant and equipment and capitalized interest</td><td>211,374</td><td>(14,531)</td><td>-</td><td>(14,531)</td><td>196,843</td></tr><tr><td>Facility closure provision</td><td>(3,469)</td><td>(811)</td><td>-</td><td>(811)</td><td>(4,280)</td></tr><tr><td>Manufacturing expenses</td><td>102,748</td><td>1,012</td><td>-</td><td>1,012</td><td>103,760</td></tr><tr><td>Staff severance indemnities, unemployment insurance</td><td>6,792</td><td>(667)</td><td>(446)</td><td>(1,113)</td><td>5,679</td></tr><tr><td>Vacation accrual</td><td>(4,887)</td><td>(268)</td><td>-</td><td>(268)</td><td>(5,155)</td></tr><tr><td>Inventory provision</td><td>(25,172)</td><td>(2,983)</td><td>-</td><td>(2,983)</td><td>(28,155)</td></tr><tr><td>Materials provision</td><td>(7,107)</td><td>868</td><td>-</td><td>868</td><td>(6,239)</td></tr><tr><td>Forward</td><td>(624)</td><td>(1,545)</td><td>-</td><td>(1,545)</td><td>(2,169)</td></tr><tr><td>Employee benefits</td><td>(2,317)</td><td>(992)</td><td>-</td><td>(992)</td><td>(3,309)</td></tr><tr><td>Research and development expenses</td><td>3,501</td><td>(1,285)</td><td>-</td><td>(1,285)</td><td>2,216</td></tr><tr><td>bad debt provisions</td><td>(4,253)</td><td>686</td><td>(621)1</td><td>65</td><td>(4,188)</td></tr><tr><td>Provision for legal complaints and expenses</td><td>(5,243)</td><td>1,230</td><td>-</td><td>1,230</td><td>(4,013)</td></tr><tr><td>Loan approval expenses</td><td>2,670</td><td>(333)</td><td>-</td><td>(333)</td><td>2,337</td></tr><tr><td>Financial instruments recorded at market value</td><td>2,474</td><td>-</td><td>(1,498)</td><td>(1,498)</td><td>976</td></tr><tr><td>specific tax on mining activity</td><td>4,084</td><td>(795)</td><td>(11)</td><td>(806)</td><td>3,278</td></tr><tr><td>Tax loss benefit</td><td>(1,437)</td><td>313</td><td>-</td><td>313</td><td>(1,124)</td></tr><tr><td>Other</td><td>(5,002)</td><td>(64)</td><td>61</td><td>(3)</td><td>(5,005)</td></tr><tr><td>Foreign items (other)</td><td>(305)</td><td>46</td><td>-</td><td>46</td><td>(259)</td></tr><tr><td>Total temporary differences, unused losses and unused tax credits</td><td>205,283</td><td>(27,407)</td><td>(2,515)</td><td>(29,922)</td><td>175,361</td></tr></table>

(1) This corresponds to the adjustment to the beginning balance of the impairment provision for receivables against other reserves.

(e) Deferred taxes related to benefits for tax losses

The Company’s tax loss carryforwards were mainly generated by losses in Chile, which in accordance with current Chilean tax regulations have no expiration date.

As of December 31, 2019 and December 31, 2018, tax loss carryforwards are detailed as follows:

<table><tr><td rowspan="2">Deferred taxes related to benefits for tax losses</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUSS</td><td>ThUSS</td></tr><tr><td>Chile</td><td>2,296</td><td>1,124</td></tr><tr><td>Total</td><td>2,296</td><td>1,124</td></tr></table>

The tax losses as of December 31, 2019 that form the basis of these deferred taxes correspond mainly to SIT S.A., Exploraciones Mineras S.A. Comercial Agrorama Ltda. and Orcoma Estudio SpA.



## (f) Movements in deferred tax assets and liabilities

Movements in deferred tax assets and liabilities as of December 31, 2019 and December 31, 2018 are detailed as follows:

<table><tr><td rowspan="3">Movements in deferred tax assets and liabilities</td><td colspan="2">Assets (liabilities)</td></tr><tr><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Deferred tax assets and liabilities, net opening balance</td><td>(175,361)</td><td>(205,283)</td></tr><tr><td>Increase (decrease) in deferred taxes in profit or loss</td><td>(5,758)</td><td>27,407</td></tr><tr><td>Increase (decrease) in deferred taxes in equity</td><td>(2,292)</td><td>2,515</td></tr><tr><td>Total</td><td>(183,411)</td><td>(175,361)</td></tr></table>

## (g) Disclosures on income tax expense (income)

The Company recognizes current and deferred taxes as income or expenses, and they are included in profit or loss, unless they arise from:

(a) a transaction or event recognized in the same period or in a different period, outside profit or loss either in other comprehensive income or directly in equity; or

(ii) a business combination

Current and deferred tax expenses (income) are detailed as follows:

<table><tr><td rowspan="3">Disclosures on income tax expense (income)</td><td colspan="2">Assets (liabilities)</td></tr><tr><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Current income tax expense</td><td></td><td></td></tr><tr><td>Current tax expense</td><td>(116,483)</td><td>(207,959)</td></tr><tr><td>Adjustments to prior year current income tax</td><td>12,222</td><td>1,577</td></tr><tr><td>Current income tax expense, net, total</td><td>(104,261)</td><td>(206,382)</td></tr><tr><td>Deferred tax expense</td><td></td><td></td></tr><tr><td>Deferred tax expense (income) relating to the creation and reversal of temporary differences</td><td>2,551</td><td>26,434</td></tr><tr><td>Tax adjustments related to the creation and reversal of temporary differences from the previous year</td><td>(8,309)</td><td>973</td></tr><tr><td>Deferred tax expense, net, total</td><td>(5,758)</td><td>27,407</td></tr><tr><td>Tax expense (income)</td><td>(110,019)</td><td>(178,975)</td></tr></table>



Tax expenses (income) for foreign and domestic parties are detailed as follows:

<table><tr><td rowspan="3">Income tax (expense) benefit</td><td colspan="2">Assets (liabilities)</td></tr><tr><td>For the year ended December 31, 2019</td><td>For the year ended December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Current income tax expense by foreign and domestic parties, net</td><td></td><td></td></tr><tr><td>Current income tax expense, foreign parties, net</td><td>(7,394)</td><td>(7,516)</td></tr><tr><td>Current income tax expense, domestic, net</td><td>(96,867)</td><td>(198,866)</td></tr><tr><td>Current income tax expense, net, total</td><td>(104,261)</td><td>(206,382)</td></tr><tr><td>Deferred tax expense by foreign and domestic parties, net</td><td></td><td></td></tr><tr><td>Current income tax expense, foreign parties, net</td><td>2,370</td><td>(1,885)</td></tr><tr><td>Current income tax expense, domestic, net</td><td>(8,128)</td><td>29,292</td></tr><tr><td>Deferred tax expense, net, total</td><td>(5,758)</td><td>27,407</td></tr><tr><td>Income tax expense</td><td>(110,019)</td><td>(178,975)</td></tr></table>

The values presented include a higher current tax of ThUS$ 1,068 due to a tax difference in SQM Europe N.V. determined at the close of audit due to transfer prices from the 2017 fiscal year.

## (h) Equity interest in taxation attributable to equity-accounted investees

The Company does not recognize any deferred tax liability in all cases of taxable temporary differences associated with investments in subsidiaries, branches and associated companies or interest in joint ventures, because as indicated in the standard, the following two conditions are jointly met:

(i) the parent, investor or interest holder is able to control the time for reversal of the temporary difference; and

(ii) It is more likely than not that the temporary difference will not be reversed in the foreseeable future.

In addition, the Company does not recognize deferred income tax assets for all deductible temporary differences from investments in subsidiaries, branches and associated companies or interests in joint ventures because it is unlikely that they will meet the following requirements:

(i) Temporary differences are reversed in a foreseeable future; and

(ii) The Company has tax earnings, against which temporary differences can be used.



## (i) Disclosures on the tax effects of other comprehensive income components:

<table><tr><td rowspan="2">Income tax related to other income and expense components with a charge or credit to net equity</td><td colspan="3">For the year ended December 31, 2019</td></tr><tr><td>Amount before taxes (expense) gain</td><td>(Expense) income for income taxes</td><td>Amount after taxes</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS$</td></tr><tr><td>Gain (loss) from defined benefit plans</td><td>(3,310)</td><td>702</td><td>(2,608)</td></tr><tr><td>Cash flow hedge</td><td>1,907</td><td>(2,683)</td><td>(776)</td></tr><tr><td>Reserve for gains (losses) from financial assets measured at fair value through other comprehensive income</td><td>1,152</td><td>(311)</td><td>841</td></tr><tr><td>Total</td><td>(251)</td><td>(2,292)</td><td>(2,543)</td></tr></table>

<table><tr><td rowspan="2">Income tax related to other income and expense components with a charge or credit to net equity</td><td colspan="3">For the year ended December 31, 2018</td></tr><tr><td>Amount before taxes (expense) gain</td><td>(Expense) income for income taxes</td><td>Amount after taxes</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS$</td></tr><tr><td>Gain (loss) from defined benefit plans</td><td>(1,327)</td><td>396</td><td>(931)</td></tr><tr><td>Cash flow hedge</td><td>5,723</td><td>-</td><td>5,723</td></tr><tr><td>Reserve for gains (losses) from financial assets measured at fair value through other comprehensive income</td><td>(5,546)</td><td>1,498</td><td>(4,048)</td></tr><tr><td>Total</td><td>(1,150)</td><td>1,894</td><td>744</td></tr></table>



## (j) Explanation of the relationship between expense (income) for tax purposes and accounting income.

Based on IAS 12, paragraph 81, letter “c”, the company has estimated that the method that reveals the most significant information for users of the financial statements is the numeric conciliation between the tax expense (income) and the result of multiplying the accounting profit by the current rate in Chile. The afore mentioned choice is based on the fact that the Company and subsidiaries established in Chile generate a large part of the Company’s tax expense (income). The amounts provided by subsidiaries established outside Chile have no relative importance in the overall context.

Conciliation of numbers in income tax expenses (income) and the result of multiplying financial gain by the rate prevailing in Chile.

<table><tr><td rowspan="3">Income Tax Expense (Benefit)</td><td colspan="2">Benefits (Expenses)</td></tr><tr><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUSS</td><td>ThUSS</td></tr><tr><td>Consolidated income before taxes</td><td>390,622</td><td>621,038</td></tr><tr><td>Income tax rate in force in Chile</td><td>27%</td><td>27%</td></tr><tr><td>Tax expense using the legal rate</td><td>(105,468)</td><td>(167,680)</td></tr><tr><td>Effect of royalty tax payments</td><td>(4,314)</td><td>(4,919)</td></tr><tr><td>Tax effect of revenue from regular activities exempt from taxation</td><td>2,376</td><td>1,446</td></tr><tr><td>Tax rate effect of non-tax-deductible expenses for determining taxable profit (loss)</td><td>(2,128)</td><td>(2,327)</td></tr><tr><td>Tax effect of tax rates supported abroad</td><td>(252)</td><td>(3,724)</td></tr><tr><td>IRS provision surplus (*)</td><td>-</td><td>3,517</td></tr><tr><td>Other tax effects from reconciliation between accounting gains and tax expenses</td><td>(233)</td><td>(5,288)</td></tr><tr><td>Tax expense using the effective rate</td><td>(110,019)</td><td>(178,975)</td></tr></table>

 \( ^{*} \)  internal revenue service

## (k) Tax periods potentially subject to verification:

The Group’s Companies are potentially subject to income tax audits by tax authorities in each country. These audits are limited to a number of interim tax periods, which, in general, when they elapse, give rise to the expiration of these inspections.

Tax audits, due to their nature, are often complex and may require several years. Below, we provide a summary of tax periods that are potentially subject to verification, in accordance with the tax regulations in force in the country of origin:



## (i) Chile

According to article 200 of Decree Law No 830, the taxes will be reviewed for any deficiencies in terms of payment and to generate any taxes that might arise. There is a 3-year prescriptive period for such review, dating from the expiration of the legal deadline when payment should have been made. This prescriptive period can be extended to 6 years for the revision of taxes subject to declaration, when such declaration has not been filed or has been presented with maliciously false information.

## (ii) United States

In the United States, the tax authority may review tax returns for up to 3 years from the expiration date of the tax return. In the event that an omission or error is detected in the tax return of sales or cost of sales, the review can be extended for a period of up to 6 years.

As a result of the audit performed by the tax authority, SQM North America Corp., a subsidiary of the Company, paid in November 2018, for income tax and interest between 2013 and 2015, approximately US$3.8 million. On top of this, SQM North America Corp would have to pay an additional US$0.4 million in state taxes for the same period. These charges are already provisioned in the financial statements.

## (iii) Mexico:

In Mexico, the tax authority can review tax returns up to 5 years from the expiration date of the tax return.

## (iv) Spain:

In Spain, the tax authority can review tax returns up to 4 years from the expiration date of the tax return.

## (v) Belgium:

In Belgium, the tax authority may review tax returns for up to 3 years from the expiration date of the tax return if no tax losses exist. In the event of detecting an omission or error in the tax return, the review can be extended for a period of up to 5 years.

## (vi) South Africa:

In South Africa, the tax authority may review tax returns for up to 3 years from the expiration date of the tax return. In the event that an omission or error in the tax return is detected, the review can be extended for a period of up to 5 years.



## Note 32 Assets held for sale and detail of assets sold

The non-current assets held for sale and the components of the disposal groups classified as held for sale are presented in the Consolidated Statement of Financial Position under the item “Non-current assets or groups of assets classified as held for sale”.

The following table shows the movements in assets held for sale:

<table><tr><td rowspan="2">Assets held for sale</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Land owned by Soquimich Commercial S.A.</td><td>2,454</td><td>1,430</td></tr><tr><td>Total assets held for sale</td><td>2,454</td><td>1,430</td></tr></table>



## Note 33 Events occurred after the reporting date

## 33.1 Authorization of the financial statements

The consolidated financial statements of Sociedad Química y Minera de Chile S.A. and subsidiaries, prepared in accordance with IFRS for the period ended December 31, 2019, were approved and authorized for issuance by the Company’s Board of Directors on March 02, 2020.

## 33.2 Disclosures on events occurring after the reporting date

On January 22, 2020, the Company placed an unsecured bond in the international markets for US$ 400 million at an annual interest rate of 4.250% with maturity in 2050, pursuant to Rule 144 -A and Regulation S of the Securities and Exchange Commission.

The Company hopes to use net income from this placement for general corporate purposes, including financing its capital expense program and reduction of its pending debt, considering the 'payment of bonds for US$ 250 million with 5.50% interest and maturity on April 21, 2020.

The bond has been sold to qualified institutional buyers in the United States and no security laws from other states or jurisdictions have been registered in accordance with SEC regulations.

On February 26, 2020, the Company reported that its Board of Directors had agreed to call an Ordinary Shareholders’ Meeting for 10:00 am on Thursday, April 23, 2020.

## 33.3 Details of dividends declared after the reporting date

At the reporting dates of the financial statements, there are no dividends declared after the reporting date.



## REPORT OF ACCOUNTING INSPECTORS

We have examined the Financial Statements of Sociedad Química y Minera de Chile S.A. corresponding to the business year ended December 31, 2019.

Our exam and revision as Accounting Inspectors spanned the comparison of the outstanding balances of the General Ledger with the Balance Sheet and the corresponding Income Statements as of December 31, 2019. We found these accounts to be in accordance with their balances.

We confirm that in as part of work as account inspectors, we have had access to the Company's accounting information, inventory, balance sheet and financial statements.

At the same time, we confirm to be of legal age, with the ability to make and independent decision, and have not have been convicted of crimes that merit punishment.

Santiago, March 16, 2020



Genoveva Cofré Gutiérrez
CMF Registered Account Inspector and
External Auditor N° 45






## Reasoned Analysis of the Financial Situation

## 1. Analysis of the Financial Statements

<table><tr><td colspan="3">Balance</td></tr><tr><td>(US$ Millions)</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td colspan="3"></td></tr><tr><td>Total Current Assets</td><td>2,682.2</td><td>2,398.4</td></tr><tr><td>Cash and cash equivalents</td><td>588.5</td><td>556.1</td></tr><tr><td>Other current financial assets</td><td>505.5</td><td>312.7</td></tr><tr><td>Accounts receivable (1)</td><td>460.4</td><td>509.4</td></tr><tr><td>Inventory</td><td>983.3</td><td>913.7</td></tr><tr><td>Others</td><td>144.4</td><td>106.5</td></tr><tr><td colspan="3"></td></tr><tr><td>Total Non-current Assets</td><td>2,002.0</td><td>1,869.7</td></tr><tr><td>Other non-current financial assets</td><td>8.8</td><td>17.1</td></tr><tr><td>Investments in related companies</td><td>109.4</td><td>111.5</td></tr><tr><td>Property, plant and equipment</td><td>1,607.1</td><td>1,454.8</td></tr><tr><td>Other Non-current Assets</td><td>276.7</td><td>286.2</td></tr><tr><td colspan="3"></td></tr><tr><td>Total Assets</td><td>4,684.2</td><td>4,268.1</td></tr><tr><td colspan="3"></td></tr><tr><td>Total Current Liabilities</td><td>776.8</td><td>555.7</td></tr><tr><td>Other current financial liabilities</td><td>298.8</td><td>23.5</td></tr><tr><td>Other current liabilities</td><td>478.0</td><td>532.1</td></tr><tr><td colspan="3"></td></tr><tr><td>Total, pasivos no corrientes</td><td>1,772.9</td><td>1,574.6</td></tr><tr><td>Other non-current financial liabilities</td><td>1,518.9</td><td>1,330.40</td></tr><tr><td>Other non-current liabilities</td><td>253.9</td><td>244.2</td></tr><tr><td>Shareholders&#x27; Equity before Minority Interest</td><td>2,086.3</td><td>2,085.50</td></tr><tr><td>Minority Interest</td><td>48.2</td><td>52.3</td></tr><tr><td colspan="3"></td></tr><tr><td>Total Shareholders&#x27; Equity</td><td>2,134.5</td><td>2,137.8</td></tr><tr><td colspan="3"></td></tr><tr><td>Total Liabilities &amp; Shareholders&#x27; Equity</td><td>4,684.2</td><td>4,268.1</td></tr><tr><td>Liquidity (2)</td><td>3.5</td><td>4.3</td></tr><tr><td colspan="3"></td></tr><tr><td colspan="3">(1) Accounts receivable + accounts receivable from related companies</td></tr><tr><td colspan="3">(2) Current assets / current liabilities</td></tr></table>



## 1.1 Analysis of the Consolidated Statement of Financial Position

As of December 31, 2019, the company's total assets amount to MUS$4,684.2, which represents an increase of approximately 10% compared to the MUS$4,268.1 obtained as of December 31, 2018. This difference between both periods is mainly produced by the variation in the following items:

Current assets decreased by approximately 12%, from MUS$2,398.4 recorded at the end of the prior year to MUS$2,466.3 in the current period:

- Cash and cash equivalents increased by MUS$32.5 (6%) as of December 31, 2019 amounting to MUS$588.5. The detail of this item is disclosed in Note 11.

- Other current financial assets increased by MUS$192.8 (62%) as of December 31, 2010 amounting to MUS$505.5. The detail of the item is disclosed in Note 14.

- Accounts receivable decreased by MUS$49.0 (10%) as of December 31, 2019 amounting to MUS$460.4. The detail of this item is disclosed in Note 14.

- Current inventories increased by MUS$69.7 (8%) as of December 31, 2019 amounting to MUS$983.3. The detail of this item is disclosed in Note 12.

Non-current assets increased by approximately 7%, from MUS$1,869.7 recorded at the end of prior year, to MUS$1,868.5 for the current quarter.

- Other non-current financial assets decreased by MUS$8.4 (49%) as of December 31, 2019 amounting to MUS$8.8. The detail of the item is disclosed in Note 14.

- Property, plant and equipment increased by MUS$152.6 (10%), as of December 31, 2019 amounting to MUS$1,607.1. The detail of this item is disclosed in Note 16.

As of December 31, 2019, the Company’s total liabilities amount to MUS$2,549.7, representing an increase of approximately 20% compared to MUS$2,130.3 recorded as of December 31, 2018. This difference is mainly generated by changes in the following items:

Current liabilities increased by approximately 40%, from MUS$555.7 recorded at the end of December of the previous year to MUS$776.8.7 for the current quarter.

- Other current financial liabilities increased by MUS$275.2 (1,167%) as of December 31, 2019 amounting to MUS$298.8. The detail of this item is disclosed in Note 14.

- Other current non-financial liabilities decreased by MUS$54.1 (10%) as of December 31, 2019 amounting to MUS$478. The detail of this item is disclosed in Note 13, 14, 18, 19 and 31.

Non-current liabilities increased by approximately 13%, from MUS$1,574.6 recorded at the end of the previous year, to MUS$1,772.9 for the current quarter.

- Other non-current financial liabilities increased by MUS$188.5 (14%) as of December 31, 2019 amounting to MUS$1,518.9. The detail of this item is disclosed in Note 14.



The consolidated financial statements of Sociedad Química y Minera de Chile S.A. and Subsidiaries have been prepared in accordance with International Financial Reporting Standards (hereinafter “IFRS”) and represent the comprehensive, explicit and unreserved adoption of International Financial Reporting Standards as issued by the International Accounting Standard Board (IASB). Should there be any discrepancies between IFRS and the instructions issued by the Chilean Commission for the Financial Market (CMF) the latter shall prevail.

These consolidated financial statements fairly reflect the Company’s equity and financial position and the results of its operations, changes in the statement of income and expenses recognized and cash flows, which have occurred in the year then ended.

The valuation of the main assets and liabilities has been performed as follows:

Inventories: The Company states inventories for the lower of cost and net realizable value. The cost price of finished products and products in progress includes the direct cost of materials and, when applicable, labor costs, indirect costs incurred to transform raw materials into finished products, and general expenses incurred in carrying inventories to their current location and conditions. The method used to determine the cost of inventories is weighted average cost.

Commercial discounts, rebates obtained, and other similar entries are deducted in the determination of the acquisition price.

The net realizable value represents the estimate of the sales price, less all finishing estimated costs and costs which will be incurred in commercialization, sales, and distribution processes.

The Company conducts an evaluation of the net realizable value of inventories at the end of each year, recording an estimate with a charge to income when these are overstated. When a situation arises whereby the circumstances, which previously caused the rebate to cease to exist, or when there is clear evidence of an increase in the net realizable value due to a change in the economic circumstances or prices of main raw materials, the estimate made previously is modified.

The valuation of obsolete, impaired or slow-moving products relates to their net estimated, net realizable value.

The provisions for technical specification on the Company’s inventories have been made based on a technical study covering different variables affecting products in stock (density, moist, among others).

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

Property, plant and equipment: Tangible property, plant and equipment assets are stated at acquisition cost, net of the related accumulated depreciation and impairment losses that they have experienced.



## 1.2 Consolidated Statement of Comprehensive Income

<table><tr><td>Income Statement</td><td></td><td></td><td></td><td></td></tr><tr><td>(US$ Millions)</td><td colspan="2">For the 4th quarter</td><td colspan="2">For the twelve months ended December 31,</td></tr><tr><td></td><td>2019</td><td>2018</td><td>2019</td><td>2018</td></tr><tr><td>Revenues</td><td>472.2</td><td>565.2</td><td>1,943.7</td><td>2,265.8</td></tr><tr><td>Lithium and Lithium Derivatives</td><td>99.7</td><td>233.9</td><td>505.7</td><td>734.8</td></tr><tr><td>Specialty Plant Nutrition (1)</td><td>172.8</td><td>174.4</td><td>723.9</td><td>781.8</td></tr><tr><td>Iodine and Iodine Derivatives</td><td>93.6</td><td>81.9</td><td>371.0</td><td>325.0</td></tr><tr><td>Potassium Chloride &amp; Potassium Sulfate</td><td>49.9</td><td>47.7</td><td>212.2</td><td>267.5</td></tr><tr><td>Industrial Chemicals</td><td>47.0</td><td>13.7</td><td>94.9</td><td>108.3</td></tr><tr><td>Other Income</td><td>9.2</td><td>13.8</td><td>36.0</td><td>48.5</td></tr><tr><td>Cost of Goods Sold</td><td>(281.8)</td><td>(315.4)</td><td>(1,181.3)</td><td>(1,264.2)</td></tr><tr><td>Depreciation and Amortization</td><td>(52.6)</td><td>(48.8)</td><td>(202.3)</td><td>(221.4)</td></tr><tr><td>Gross Profit</td><td>137.8</td><td>201.1</td><td>560.1</td><td>780.2</td></tr><tr><td>Administrative Expenses</td><td>(33.4)</td><td>(34.6)</td><td>(117.2)</td><td>(118.1)</td></tr><tr><td>Financial Expenses</td><td>(18.0)</td><td>(17.4)</td><td>(76.9)</td><td>(57.8)</td></tr><tr><td>Financial Income</td><td>7.0</td><td>6.0</td><td>26.3</td><td>22.5</td></tr><tr><td>Exchange Difference</td><td>(1.1)</td><td>(7.2)</td><td>(2.2)</td><td>(16.6)</td></tr><tr><td>Other</td><td>1.9</td><td>14.9</td><td>0.6</td><td>10.9</td></tr><tr><td>Income Before Taxes</td><td>94.1</td><td>162.9</td><td>390.6</td><td>621.0</td></tr><tr><td>Income Tax</td><td>(26.0)</td><td>(52.7)</td><td>(110.0)</td><td>(179.0)</td></tr><tr><td>Net Income before minority interest</td><td>68.2</td><td>110.2</td><td>280.6</td><td>442.1</td></tr><tr><td>Minority Interest</td><td>1.3</td><td>1.5</td><td>2.5</td><td>2.2</td></tr><tr><td>Net Income</td><td>66.9</td><td>108.6</td><td>278.1</td><td>439.8</td></tr><tr><td>Net Income per Share (US$)</td><td>0.25</td><td>0.41</td><td>1.06</td><td>1.67</td></tr><tr><td colspan="5">(1) Includes other specialty fertilizers</td></tr></table>






## 1.2.1 Analysis by business area and market variances

## Lithium and Derivatives

Revenues from lithium and derivatives totaled US$505.7 million during the twelve months ended December 31, 2019, a decrease of 31.2% compared to the US$734.8 million for the twelve months ended December 31, 2018.

Lithium and derivatives revenues decreased 57.4% during the fourth quarter of 2019 compared to the fourth quarter of 2018. Total revenues amounted to US99.7 million during the fourth quarter of 2019, compared to US233.9 million in the fourth quarter of 2018.

During 2019, we believe total market demand reached 307,000 metric tons. Our sales volumes remained flat compared to 2018, and our average prices fell over 30% in line with our estimates. The decrease in lithium price was a result of lower than expected demand growth, which we believe reached approximately 14% during 2019. During 2020, we believe the European electric vehicle market will gain momentum and contribute significantly to lithium demand growth. However, we believe the oversupply seen in 2019 may continue in 2020 and could further impact average prices this year when compared to 2019. We remain optimistic about the long-term growth of the lithium market related to electric vehicles.

We believe that our sales volumes in 2020 could reach approximately 55,000-60,000 metric tons, allowing us to increase our market share. We continue our expansion plans in Chile, expecting to reach a capacity of 120,000 metric tons in 2021. We have decided to complete our lithium hydroxide expansion in two modules of 8,000 metric tons and believe the first stage will be completed next year. We have plans to further expand lithium carbonate in Chile and continue to work on the development of our Mt. Holland project in Australia.

Gross profit \( ^{(1)} \)  for the Lithium and Derivatives segment accounted for approximately 36% of SQM’s consolidated gross profit for the twelve months ended December 31, 2019.

## Specialty plant nutrition

Revenues from the SPN business line for the twelve months ended December 31, 2019 totaled US$723.9 million, a decrease of 7.4% compared to $781.8 million reported for the twelve months ended December 31, 2018.

Fourth quarter 2019 revenues reached US172.8 million, 0.9% lower than the US174.4 million reported in the fourth quarter of 2018.

In the potassium nitrate market, demand growth was weaker than expected in 2019, as a result of weather conditions in various geographical markets. Our average prices fell as a result of this lower demand, about 3% less in 2019 than average prices reported in 2018. We expect that to change in 2020, as we should see strong demand in the North America, specifically the United States and Mexico. We believe that water soluble potassium nitrate could see growth rates of approximately 6%. This demand recovery could also have a positive impact on prices this year.

SPN gross profit accounted for approximately 27% of SQM’s consolidated gross profit for the twelve months ended December 31, 2019.

## Iodine and derivatives

Revenues from sales of iodine and derivatives during the twelve months ended December 31, 2019 were US371.0 million, an increase of 14.2% compared to US325.0 million generated for the twelve months ended December 31, 2018.



Revenues from sales of iodine and derivatives for the fourth quarter of 2019 amounted to US$93.6 million, an increase of 14.3% compared to US$81.9 million achieved during the fourth quarter of 2018.

Higher iodine revenues were the result of higher prices during 2019 compared to the 2018 where average prices in the business line increased almost 20%. We believe that this positive price momentum should continue during 2020, increasing margins per ton significantly in this business lines. This should offset the slightly lower sales volumes that we expect during 2020.

Gross profit for the Iodine and Derivatives segment accounted for approximately 25% of SQM’s consolidated gross profit for the twelve months ended December 31, 2019.

## Potassium: Potassium chloride and potassium sulfate

Potassium chloride and potassium sulfate revenues for 2019 totaled US$212.2 million, a 20.7% decrease compared to the US$267.5 million reported for the twelve months ended December 31, 2018.

Potassium chloride and potassium sulfate revenues increased 4.8% in the fourth quarter of 2019, totaling US$49.9 million compared to the US$47.7 million reported for the fourth quarter of 2018.

In 2019, we believe that the potassium chloride market reached approximately 64 million metric tons and could grow an additional 2 million tons in 2020. Revenues in the potassium chloride and potassium sulfate business line during 2019 were impacted by lower sales volumes when compared to 2018, which were not offset by higher average prices in the business line. Sales volumes for potassium chloride and potassium sulfate reached almost 600k metric tons, which is significantly higher than our original annual sales estimate of 500k metric tons. We believe that sales volumes in 2020 could increase another 20-25% when compared to 2019, but the lower price dynamics that we have seen during the first two months of this year could continue.

Gross profit for Potassium Chloride and Potassium Sulfate business line accounted for approximately 6% of SQM’s consolidated gross profit for the twelve months ended December 31, 2019.

## Industrial chemicals

Industrial chemicals revenues for the twelve months ended December 31, 2019 reached US$94.9 million, a 12.4% decrease compared to US$108.3 million for the twelve months ended December 31, 2018.

Revenues for the fourth quarter of 2019 totaled US$47.0 million, an increase of 243.2% compared to US$13.7 million for the fourth quarter of 2018.

Our lower revenues in this business line were a result of lower sales volumes in the business line. We reported sales of over 48,000 metric tons of solar salts during the fourth quarter of the year, in line with our estimates. We will be supplying a very large CSP project in the Middle East with the expected 2020 sales volumes of approximately 150,000 MT.

Gross profit for the Industrial Chemicals segment accounted for approximately 6% of SQM’s consolidated gross profit for the twelve months ended December 31, 2019.

## Other commodity fertilizers and other revenues



Revenues from sales of other commodity fertilizers and other income reached US$36.0 million in the twelve months ended December 31, 2019, lower than the US$48.5 million for the twelve months ended December 31, 2018.

## Financial Information

## Cost of Goods Sold

Cost of goods sold, excluding total depreciation and amortization expenses, amounted to US$1,181.3 million for the twelve months ended December 31, 2019, a decrease of 6.6% compared to US$1,264.2 million for the same period in 2018.

## Administrative expenses

Administrative expenses totaled US$117.2 million (6.0% of revenues) for the twelve months ended December 31, 2019, compared to US$118.1 million (5.2% of revenues) recorded during the twelve months ended December 31, 2018.

## Net finance costs

Net financial expenses for the twelve months ended December 31, 2019 were US$50.6 million, compared to US$35.3 million recorded for the twelve months ended December 31, 2018.

## Income tax expense

Income tax expense reached US$110.0 million for the twelve months ended December 31, 2019, representing an effective tax rate of 28.2%, compared to an income tax expense of US$179.0 million during the twelve months ended December 31, 2018. The Chilean corporate tax rate was 27.0% during 2019 and 2018.

## Other

The adjusted EBITDA margin was approximately 33.2% for the twelve months ended December 31, 2019. AdjustedEBITDA margin for the twelve months ended December 31, 2018 was approximately 39.0%. The adjusted EBITDAmargin for the fourth quarter of 2019 was approximately 33.3%.

1) A significant portion of SQM’s costs of goods sold are costs related to common productive processes (mining, crushing, leaching, etc.) which are distributed among the different final products. To estimate gross profit by business line in both periods covered by this report, the Company employed similar criteria on the allocation of common costs to the different business areas. This gross profit distribution should be used only as a general and approximated reference of the margins by business line.

2) Adjusted EBITDA = gross profit - administrative expenses + depreciation and amortization. Adjusted EBITDA margin = Adjusted EBITDA/revenues.







## 2. Financial ratios

<table><tr><td>Liquidity ratios</td><td></td><td>31-12-2019</td><td>31-12-2018</td><td></td></tr><tr><td>Current liquidity</td><td>Times</td><td>3.45</td><td>4.32</td><td>Current assets</td></tr><tr><td></td><td></td><td></td><td></td><td>Current liabilities</td></tr><tr><td>Acid test</td><td>Times</td><td>2.19</td><td>2.67</td><td>(Current assets - Inventories)</td></tr><tr><td></td><td></td><td></td><td></td><td>Current liabilities</td></tr></table>

<table><tr><td>Indebtedness ratios</td><td></td><td>31-12-2019</td><td>31-12-2018</td><td></td></tr><tr><td>Indebtedness ratio</td><td>%</td><td>119.5</td><td>99.6</td><td>Liabilities</td></tr><tr><td></td><td></td><td></td><td></td><td>Equity attributable to owners of the Parent</td></tr><tr><td>Short-term debt to total debt ratio</td><td>%</td><td>30.5</td><td>26.1</td><td>Current liabilities</td></tr><tr><td></td><td></td><td></td><td></td><td>Total debt</td></tr><tr><td>Long-term debt to total debt ratio</td><td>%</td><td>69.5</td><td>73.9</td><td>Non-current liabilities</td></tr><tr><td></td><td></td><td></td><td></td><td>Total debt</td></tr></table>

<table><tr><td>Activity ratios</td><td></td><td>31-12-2019</td><td>31-12-2018</td><td></td></tr><tr><td>Total assets</td><td>MUS\(</td><td>4.684</td><td>4.268</td><td></td></tr><tr><td>Inventory turnover</td><td>%</td><td>1.44</td><td>1.62</td><td>Cost of sales  \( t_{TM} \)</td></tr><tr><td></td><td></td><td></td><td></td><td>Inventories</td></tr><tr><td>Inventory permanence</td><td>%</td><td>251</td><td>222</td><td>360 days</td></tr><tr><td></td><td></td><td></td><td></td><td>Inventory turnover</td></tr></table>

<table><tr><td>Profitability ratios</td><td></td><td>31-12-2019</td><td>31-12-2018</td><td></td></tr><tr><td>Earnings per share</td><td>Times</td><td>1.07</td><td>1.68</td><td>Net profit (loss)  \( t_{TM} \)</td></tr><tr><td></td><td></td><td></td><td></td><td>Shares subscribed</td></tr><tr><td>Return on equity</td><td>%</td><td>13.1</td><td>20.7</td><td>Net profit (loss)  \( t_{TM} \)</td></tr><tr><td></td><td></td><td></td><td></td><td>Equity</td></tr><tr><td>Return on assets</td><td>%</td><td>12.8</td><td>20.3</td><td>Net profit (loss)  \( t_{TM} \)</td></tr><tr><td></td><td></td><td></td><td></td><td>Assets \( ^{(1)} \)</td></tr></table>

(1) Assets = Total Assets – (Cash and cash equivalents + Financial Assets + Investments in related companies)



## 2.1 Analysis of Financial Indicators

## Liquidity:

- Current liquidity: the decrease in the ratio can be explained because even though there was an increase in Current Assets (CA) of US$284 million (12%), there was also greater percentage magnitude in Current Liabilities (CL) of US$221 million (40%), resulting in a lower ratio value. The main variation in assets was seen in the US$193 million increase in Other current financial assets, mainly due to the US$178 million increase in more than 90 days deposits, and an increase in Inventory of US$70 million. On the liabilities side, the greatest change was seen in Other Current Financial Liabilities, which increased by US$275 million, an amount explained mainly by the transfer of a US$250 million bond that matures this year into the short-term debt from the long-term debt.

- Acid test: As mentioned in the previous ratio, when comparing both periods it can be seen that there was an increase in Inventory of US$70 million, considering that CA increased by US$284 million, if we remove these US$70 million from the equation, the effect explained above remains, because of the magnitude, and therefore the ratio should have decreased as it did.

## Indebtedness:

- Debt ratio: it can be seen that this ratio increased, since the CL increased in the aforementioned manner, and the Non-Current Liabilities (NCL) increased by US$198 million (12.6%), mainly explained by the increase in Other Non-Current Financial Liabilities of US$189 million, as a result of the transfer of the aforementioned US$250 million bond in the short-term and the issuance of a new 144A bond of US$450 million that will mature in 2029. Given these movements, the Total Liability can be seen increased by US$419 million while the equity was held almost constant, causing the ratio to increase.

- Proportional amount of debt: as mentioned above, both the CL and the NCL increased, however, as the CL increased by a greater percentage (40% vs. 12% of the NCL), it can be concluded that the short-term debt ratio has increased and the long-term decreased.

## Activities:

- Inventory Turnover and Permanence: you can see a decrease in inventory turnover, mainly because inventory increased by US$70 million, close to 8%, while LTM cost of sales decreased US$102 million, a proportion close to 7%, mainly due to a decrease in sales for the year. Since the denominator increased and the ratio numerator decreased, a lower ratio is therefore obtained. Due to this increase, an increase in inventory permanence of 29 days can also be seen, since both ratios are inversely proportional.

## Profitability:

- Earnings per share: with the same number of shares, as there is a decrease in the profit obtained during the 2019 period of US$161.5 million (36.5%), if compared to that obtained during 2018, a decrease in this ratio is generated. For further details, please, see the statement of income for the corresponding periods.



- ROE: The decrease in this ratio was due to the decrease in the LTM Net Income in the amount and proportion mentioned above, while equity remained almost constant (decreased by US$3.3 million, about 0.1%).

- ROA: The decrease in this ratio was affected both by the decrease in the dividend by US$221 million (around 33%), and by the increase in Assets that affect this ratio, which increased by US$201 million (approximately 6%).

## 3. Analysis of the Statement of Cash Flows

The detail of the main components of cash flows as of December 31, 2019 and 2018 is as follows:

<table><tr><td>Statement of cash flows</td><td>31-12-2019</td><td>31-12-2018</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Net cash flows from (used in) operating activities</td><td>426,971</td><td>524,839</td></tr><tr><td>Net cash flows from (used in) investing activities</td><td>(485,471)</td><td>(187,004)</td></tr><tr><td>Net cash flows from (used in) financing activities</td><td>105,896</td><td>(387,313)</td></tr><tr><td>Effects of changes in exchange rates on cash and cash equivalents</td><td>(14,932)</td><td>(24,894)</td></tr><tr><td>Cash and cash equivalents at the beginning of the period</td><td>556,066</td><td>630,438</td></tr><tr><td>Cash and cash equivalents at the end of the period</td><td>588,530</td><td>556,066</td></tr></table>

## 4. Market risk analysis

Interest rate: As of December 31, 2019, the Company’s financial liabilities, current and non-current that accrue interest amount to US$1,790.9 million and include the following types of financing:

i. Unsecured obligations bearing interest, current and non-current (considering principal owed only): a bond in U.S. dollars of US$300 million considering a fixed interest rate of 3.625%, a bond in U.S. dollars of US$250 million considering a fixed interest rate of 5.5%, a bond in U.S. dollars of US$250 million considering a fixed interest rate of 4.375%; a bond in UF for the amount equivalent to US$148.2 million at fixed rate in U.S. dollars, through a Cross Currency Swap, of 6.24%; a bond in UF for the amount equivalent to MUS$58.7 at fixed rate in U.S. dollars, through a Cross Currency Swap, of 4.47%; a bond in UF for the amount equivalent to MUS$134.2 at fixed rate in U.S. dollars, through a Cross Currency Swap, of 5.11%; and a bond in UF for the amount equivalent to US$113.4 million at variable rate in U.S. dollars of UF+3.45.

ii. A loan in U.S. dollars of US$70 million at a variable rate of LIBOR6M+1.1%.

As of December 31, 2019, the Company recorded US$298.8 million within other current financial liabilities and US$1,518.9 million within other non-current financial liabilities.

Exchange rate: SQM’s main economic environment operates in U.S. dollars. However, because of the Company’s internationalization, the Company operates in different countries which generate exposure to changes in exchange rates for the different currencies with respect to U.S. dollar. Accordingly, SQM has hedging contracts to mitigate the exposure generated by its main mismatches (assets net of liabilities) in currencies other than U.S.



dollar against the variation in the exchange rate, updating such contracts on a weekly basis depending on the quantity of assets and liabilities necessary to hedge in currencies other than U.S. dollar.

To ensure the difference between its assets and liabilities, as of December 31, 2019, the Company had the following derivative contracts (as the sum of the absolute value of their notional values): US$56.75 million in Chilean peso/U.S. dollar derivative contracts, US$26.5 million in Euro/U.S. dollar derivative contracts, US$16.1 million in South African rand/U.S. dollar contracts and US$52 million in other currencies.

In addition, the Company had US$289.4 million in derivative contracts to hedge its investments in term deposits in Chilean pesos.

To hedge its expected net cash flows in Chilean pesos related to the businesses associated with the trading of fertilizers in Chile, the Company did not maintain any Chilean peso/U.S. dollar derivative contract as of December 31, 2019. To hedge its expected net cash flows in Euros the Company did not maintain any Euro/U.S. dollar derivative contracts as of December 31, 2019.

Commodity prices: The main commodities the Company uses are oil (petroleum) as fuel and in all its forms. Currently, the Company has no hedging contracts hedging international changes in prices. However, the Company has long-term contracts for energy supply.

As indicated in the Company’s Annual Report, markets in which the Company operates are unpredictable, exposed to significant fluctuations in supply and demand, and price high volatility. Additionally, the supply of certain fertilizers or chemicals, including certain products which the Company trades, vary mainly depending on the production of top producers and their related business strategies. Accordingly, the Company cannot forecast with certainty changes in demand, responses from competitors or fluctuations in the final price of its products. These factors can lead to significant impacts on the Company’s product sales volumes, financial position and share price.

The Company’s Annual Report includes a detailed analysis of risks associated with the Company’s businesses.



## 10) B) SUMMARY FINANCIAL STATEMENTS

The summary consolidated or individual financial statements of all companies mentioned in CMF ex SVS General Rule No. 346, Section I, No. 2.1, Letter a. 4.2 are provided below. The complete financial statements of such companies are available to the public in our offices and at the offices of the CMF.



## Summary Consolidated Classified Statements of Financial Position

<table><tr><td rowspan="2">Assets</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Current assets</td><td></td><td></td></tr><tr><td>Cash and cash equivalents</td><td>84,010</td><td>88,268</td></tr><tr><td>Trade receivables due from related parties, current</td><td>351,069</td><td>423,292</td></tr><tr><td>Current inventories</td><td>245,229</td><td>217,103</td></tr><tr><td>Other current assets</td><td>104,929</td><td>46,404</td></tr><tr><td>Total current assets</td><td>785,237</td><td>775,067</td></tr><tr><td>Non-current assets</td><td></td><td></td></tr><tr><td>Property, plant and equipment</td><td>892,894</td><td>826,122</td></tr><tr><td>Other non-current assets</td><td>221,948</td><td>203,908</td></tr><tr><td>Total non-current assets</td><td>1,114,842</td><td>1,030,030</td></tr><tr><td>Total assets</td><td>1,900,079</td><td>1,805,097</td></tr><tr><td rowspan="2">Liabilities and Equity</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Current liabilities</td><td></td><td></td></tr><tr><td>Other current financial liabilities</td><td>3,532</td><td>-</td></tr><tr><td>Trade payables due to related parties, current</td><td>509,616</td><td>470,957</td></tr><tr><td>Other current liabilities</td><td>169,456</td><td>165,323</td></tr><tr><td>Total current liabilities</td><td>682,604</td><td>636,280</td></tr><tr><td>Non-current liabilities</td><td></td><td></td></tr><tr><td>Deferred tax liabilities</td><td>191,056</td><td>182,555</td></tr><tr><td>Other non-current liabilities</td><td>14,619</td><td>11,072</td></tr><tr><td>Total non-current liabilities</td><td>205,675</td><td>193,627</td></tr><tr><td>Total liabilities</td><td>888,279</td><td>829,907</td></tr><tr><td>Equity</td><td></td><td></td></tr><tr><td>Equity attributable to owners of the Parent</td><td>853,456</td><td>826,246</td></tr><tr><td>Non-controlling interest</td><td>158,344</td><td>148,944</td></tr><tr><td>Total equity</td><td>1,011,800</td><td>975,190</td></tr><tr><td>Total liabilities and equity</td><td>1,900,079</td><td>1,805,097</td></tr></table>



## Summary Consolidated Statements of Income by Function

<table><tr><td rowspan="2">Consolidated Statements of Income</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Revenue</td><td>780,312</td><td>1,038,987</td></tr><tr><td>Cost of sales</td><td>(556,296)</td><td>(592,385)</td></tr><tr><td>Gross profit</td><td>224,016</td><td>446,602</td></tr><tr><td>Profit from operating activities</td><td>214,856</td><td>454,230</td></tr><tr><td>Profit before taxes</td><td>208,797</td><td>463,652</td></tr><tr><td>Income tax expense</td><td>(54,906)</td><td>(133,108)</td></tr><tr><td>Profit for the year</td><td>153,891</td><td>330,544</td></tr><tr><td>Profit attributable to Owners of the Parent</td><td>125,975</td><td>271,247</td></tr><tr><td>Profit (loss) attributable to Non-controlling interests</td><td>27,916</td><td>59,297</td></tr><tr><td>Profit for the year</td><td>153,891</td><td>330,544</td></tr></table>

Summary Consolidated Statements of Comprehensive Income

<table><tr><td rowspan="2">Summary Consolidated Statements of Comprehensive Income</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Profit for the year</td><td>153,891</td><td>330,544</td></tr><tr><td>Changes in other comprehensive income</td><td>(720)</td><td>82</td></tr><tr><td>Total comprehensive income</td><td>153,171</td><td>330,626</td></tr><tr><td>Comprehensive income attributable to</td><td></td><td></td></tr><tr><td>Comprehensive income attributable to owners of the parent</td><td>125,395</td><td>271,492</td></tr><tr><td>Comprehensive income attributable to non-controlling interest</td><td>27,776</td><td>59,134</td></tr><tr><td></td><td>153,171</td><td>330,626</td></tr></table>



Summary Consolidated Statements of Cash Flows

<table><tr><td rowspan="2">Consolidated Statements of Cash Flows</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Net cash generated from operating activities</td><td>259,551</td><td>549,648</td></tr><tr><td>Net cash generated used in investing activities</td><td>(150,299)</td><td>(180,873)</td></tr><tr><td>Net cash generated used in financing activities</td><td>(112,300)</td><td>(391,729)</td></tr><tr><td>Net decrease in cash and cash equivalents before the effect of changes in the exchange rate</td><td>(3,048)</td><td>(22,954)</td></tr><tr><td>Effects of exchange rate fluctuations on cash held</td><td>(1,210)</td><td>(1,057)</td></tr><tr><td>Net decrease in cash and cash equivalents</td><td>(4,258)</td><td>(24,011)</td></tr><tr><td>Cash and cash equivalents at beginning of period</td><td>88,268</td><td>112,279</td></tr><tr><td>Cash and cash equivalents at end of period</td><td>84,010</td><td>88,268</td></tr></table>



## SQM Potasio S.A. y Subsidiarias

Summary Consolidated Statements of Changes in Equity

<table><tr><td rowspan="2">Statements of Changes in Equity</td><td>Share capital</td><td>Foreign currency translation reserves</td><td>Reserve for (losses) gains from of defined benefit plans</td><td>Other miscellaneous reserves</td><td>Total Other reserves</td><td>Retained earnings</td><td>Equity attributable to owners of the Parent</td><td>Non-controlling interests</td><td>Total equity</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>$ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Equity as of January 1, 2019</td><td>257,010</td><td>(3,983)</td><td>(504)</td><td>11,289</td><td>6,802</td><td>562,434</td><td>826,246</td><td>148,944</td><td>975,190</td></tr><tr><td>Net profit</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>125,975</td><td>125,975</td><td>27,916</td><td>153,891</td></tr><tr><td>Other comprehensive income</td><td>-</td><td>61</td><td>(641)</td><td>-</td><td>(580)</td><td>-</td><td>(580)</td><td>(140)</td><td>(720)</td></tr><tr><td>Comprehensive income</td><td>-</td><td>61</td><td>(641)</td><td>-</td><td>(580)</td><td>125,975</td><td>125,395</td><td>27,776</td><td>153,171</td></tr><tr><td>Dividends</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(98,184)</td><td>(98,184)</td><td>(18,376)</td><td>(116,560)</td></tr><tr><td>Increase (decrease) in equity</td><td>-</td><td>61</td><td>(641)</td><td>-</td><td>(580)</td><td>27,791</td><td>27,211</td><td>9,400</td><td>36,611</td></tr><tr><td>Equity as of December 31, 2019</td><td>257,010</td><td>(3,922)</td><td>(1,145)</td><td>11,289</td><td>6,222</td><td>590,225</td><td>853,457</td><td>158,344</td><td>1,011,800</td></tr></table>

<table><tr><td rowspan="2">Statements of Changes in Equity</td><td>Share capital</td><td>Foreign currency translation reserves</td><td>Reserve for (losses) gains from of defined benefit plans</td><td>Other miscellaneous reserves</td><td>Total Other reserves</td><td>Retained earnings</td><td>Equity attributable to owners of the Parent</td><td>Non-controlling interests</td><td>Total equity</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>$ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Equity as of January 1, 2018</td><td>257,010</td><td>(4,956)</td><td>229</td><td>11,289</td><td>6,562</td><td>823,017</td><td>1,086,589</td><td>165,714</td><td>1,252,303</td></tr><tr><td>Net profit</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>271,247</td><td>271,247</td><td>59,297</td><td>330,544</td></tr><tr><td>Other comprehensive income</td><td>-</td><td>972</td><td>(733)</td><td>-</td><td>240</td><td>-</td><td>240</td><td>(163)</td><td>77</td></tr><tr><td>Comprehensive income</td><td>-</td><td>972</td><td>(733)</td><td>-</td><td>240</td><td>271,247</td><td>271,487</td><td>59,134</td><td>330,621</td></tr><tr><td>Dividends</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(531,830)</td><td>(531,830)</td><td>(75,904)</td><td>(607,734)</td></tr><tr><td>Increase (decrease) in equity</td><td>-</td><td>972</td><td>(733)</td><td>-</td><td>240</td><td>(260,583)</td><td>(260,343)</td><td>(16,770)</td><td>(277,113)</td></tr><tr><td>Equity as of December 31, 2018</td><td>257,010</td><td>(3,983)</td><td>(504)</td><td>11,289</td><td>6,802</td><td>562,434</td><td>826,246</td><td>148,944</td><td>975,190</td></tr></table>



## Detail of related parties and related party transactions

As of December 31, 2019 and 2018, the detail of transactions with related parties is as follows:



<table><tr><td rowspan="2">Tax ID No.</td><td rowspan="2">Company</td><td rowspan="2">Nature</td><td rowspan="2">Country of origin</td><td rowspan="2">Transaction</td><td>For the year ended December 31, 2019</td><td>For the year ended December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Foreign</td><td>SQM Africa Pty. Ltd.</td><td>Other related parties</td><td>South Africa</td><td>Sale of products</td><td>26,928</td><td>32,092</td></tr><tr><td>76.686.311-9</td><td>SQM Mag SPA</td><td>Common Controller</td><td>Chile</td><td>Sale of products</td><td>-</td><td>308</td></tr><tr><td>96.592.180-K</td><td>Ajay SQM Chile</td><td>Other related parties</td><td>Chile</td><td>Sale of products</td><td>1</td><td>-</td></tr><tr><td>Foreign</td><td>SQM Internacional S.A.</td><td>Other related parties</td><td>Belgium</td><td>Sale of products</td><td>4,664</td><td>-</td></tr><tr><td>Foreign</td><td>SQM Ecuador S.A.</td><td>Other related parties</td><td>Ecuador</td><td>Sale of products</td><td>15,006</td><td>8,937</td></tr><tr><td>Foreign</td><td>SQM Europe N.V.</td><td>Other related parties</td><td>Belgium</td><td>Sale of products</td><td>322,666</td><td>524,991</td></tr><tr><td>96.592.190-7</td><td>SQM Nitratos S.A.</td><td>Associate</td><td>Chile</td><td>Current account interest</td><td>151</td><td>295</td></tr><tr><td>96.592.190-7</td><td>SQM Nitratos S.A.</td><td>Associate</td><td>Chile</td><td>Services provided</td><td>1,098</td><td>1,084</td></tr><tr><td>79.947.100-0</td><td>SQM Industrial S.A.</td><td>Associate</td><td>Chile</td><td>Sale of products</td><td>83,854</td><td>81,869</td></tr><tr><td>79.947.100-0</td><td>SQM Industrial S.A.</td><td>Associate</td><td>Chile</td><td>Current account interest</td><td>97</td><td>3,934</td></tr><tr><td>79.947.100-0</td><td>SQM Industrial S.A.</td><td>Associate</td><td>Chile</td><td>Current account interest</td><td>306</td><td>123</td></tr><tr><td>79.947.100-0</td><td>SQM Industrial S.A.</td><td>Associate</td><td>Chile</td><td>Services provided</td><td>886</td><td>853</td></tr><tr><td>79.947.100-0</td><td>SQM Industrial S.A.</td><td>Associate</td><td>Chile</td><td>Dividends</td><td>1,334</td><td>-</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>Current account interest</td><td>-</td><td>2,586</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>Current account interest</td><td>17,559</td><td>5,581</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>Sale of products</td><td>-</td><td>39</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>Services provided</td><td>1,365</td><td>1,332</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>Sale of fixed asset</td><td>-</td><td>88</td></tr><tr><td>Foreign</td><td>SQM North América Corp.</td><td>Other related parties</td><td>United States</td><td>Sale of products</td><td>44,370</td><td>55,808</td></tr><tr><td>Foreign</td><td>SQM North América Corp.</td><td>Other related parties</td><td>United States</td><td>Current account interest</td><td>407</td><td>207</td></tr><tr><td>79.768.170-9</td><td>Soquimich Comercial S.A.</td><td>Other related parties</td><td>Chile</td><td>Sale of products</td><td>7,790</td><td>15,340</td></tr><tr><td>Foreign</td><td>Ajay North América</td><td>Associate</td><td>United States</td><td>Dividends</td><td>2,796</td><td>2,807</td></tr><tr><td>79.770.780-5</td><td>SIT S.A.</td><td>Other related parties</td><td>Chile</td><td>Current account interest</td><td>2</td><td>5</td></tr><tr><td>79.770.780-5</td><td>SIT S.A.</td><td>Other related parties</td><td>Chile</td><td>Current account interest</td><td>470</td><td>678</td></tr><tr><td>Foreign</td><td>SQM Comercial de México S.A. de C.V.</td><td>Associate</td><td>México</td><td>Sale of products</td><td>25,502</td><td>22,477</td></tr><tr><td>Foreign</td><td>SQM Iberian S.A.</td><td>Other related parties</td><td>Spain</td><td>Sale of products</td><td>4,575</td><td>12,142</td></tr><tr><td>Foreign</td><td>SQM Vitas Brasil Agroindustria</td><td>Other related parties</td><td>Brazil</td><td>Sale of products</td><td>17,303</td><td>11,081</td></tr><tr><td>Foreign</td><td>SQM Vitas Perú S.A.C.</td><td>Other related parties</td><td>Perú</td><td>Sale of products</td><td>6,941</td><td>1,682</td></tr><tr><td>Foreign</td><td>SQM Thailand Limited</td><td>Other related parties</td><td>Thailand</td><td>Sale of products</td><td>-</td><td>2,238</td></tr><tr><td>Foreign</td><td>SQM Japan Co. Ltd.</td><td>Associate</td><td>Japan</td><td>Sale of products</td><td>156,471</td><td>195,343</td></tr><tr><td>Foreign</td><td>SQM Colombia S.A.S.</td><td>Subsidiary</td><td>Colombia</td><td>Sale of products</td><td>4,787</td><td>2,649</td></tr><tr><td>Foreign</td><td>Minera Exar (1)</td><td>Joint venture</td><td>Argentina</td><td>Current account interest</td><td>-</td><td>1,864</td></tr><tr><td>Foreign</td><td>Soquimich European Holding B.V.</td><td>Other related parties</td><td>Holland</td><td>Current account interest</td><td>509</td><td>1,596</td></tr></table>

(1) During the month of December 2018, the Company sold its interest in Minera Exar S.A. generating a pre-tax profit of ThUS$12,139.



## Trade receivables due from related parties, current:

<table><tr><td rowspan="2">Tax ID N°</td><td rowspan="2">Company</td><td rowspan="2">Nature</td><td rowspan="2">Country of origin</td><td rowspan="2">Currency</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Foreign</td><td>Nitratos Naturais Do Chile Ltda.</td><td>Other related parties</td><td>Brazil</td><td>US\(</td><td>2,358</td><td>2,358</td></tr><tr><td>Foreign</td><td>Soquimich European Holding B.V.</td><td>Other related parties</td><td>Holland</td><td>US\)</td><td>-</td><td>30,726</td></tr><tr><td>Foreign</td><td>SQM Thailand Limited</td><td>Other related parties</td><td>Thailand</td><td>US\(</td><td>-</td><td>2,238</td></tr><tr><td>Foreign</td><td>SQM Africa Pty Ltd.</td><td>Other related parties</td><td>South Africa</td><td>US\)</td><td>21,341</td><td>21,974</td></tr><tr><td>Foreign</td><td>SQM Colombia SAS</td><td>Other related parties</td><td>Colombia</td><td>US\(</td><td>4,787</td><td>2,649</td></tr><tr><td>Foreign</td><td>SQM Corporation N.V.</td><td>Associate</td><td>Curacao</td><td>US\)</td><td>3,594</td><td>3,586</td></tr><tr><td>Foreign</td><td>SQM Ecuador S.A.</td><td>Other related parties</td><td>Ecuador</td><td>US\(</td><td>14,668</td><td>9,118</td></tr><tr><td>Foreign</td><td>SQM Europe N.V.</td><td>Other related parties</td><td>Belgium</td><td>US\)</td><td>157,303</td><td>208,051</td></tr><tr><td>Foreign</td><td>SQM Iberian S.A.</td><td>Other related parties</td><td>Spain</td><td>US\(</td><td>3,044</td><td>4,155</td></tr><tr><td>Foreign</td><td>SQM Japan</td><td>Associate</td><td>Japan</td><td>US\)</td><td>65,335</td><td>74,494</td></tr><tr><td>96.592.190-7</td><td>SQM Nitratos S.A.</td><td>Associate</td><td>Chile</td><td>US\(</td><td>1,185</td><td>8,571</td></tr><tr><td>Foreign</td><td>SQM North America Corp.</td><td>Other related parties</td><td>United States</td><td>US\)</td><td>41,558</td><td>36,709</td></tr><tr><td>Foreign</td><td>SQM Perú S.A.</td><td>Other related parties</td><td>Perú</td><td>US\(</td><td>-</td><td>1,080</td></tr><tr><td>79.768.170-9</td><td>Soquimich Comercial S.A.</td><td>Other related parties</td><td>Chile</td><td>US\)</td><td>-</td><td>9,414</td></tr><tr><td>Foreign</td><td>SQM Comercial de México S.A. de C.V.</td><td>Other related parties</td><td>México</td><td>US\(</td><td>16,611</td><td>4,477</td></tr><tr><td>Foreign</td><td>Ajay North America</td><td>Associate</td><td>United States</td><td>US\)</td><td>25</td><td>25</td></tr><tr><td>Foreign</td><td>SQM Vitas Brasil Agroindustria</td><td>Other related parties</td><td>Brazil</td><td>US\(</td><td>12,227</td><td>2,423</td></tr><tr><td>Foreign</td><td>SQM Vitas Fzco</td><td>Other related parties</td><td>United Arab Emirates</td><td>US\)</td><td>65</td><td>65</td></tr><tr><td>Foreign</td><td>SQM Vitas Perú S.A.C</td><td>Other related parties</td><td>Perú</td><td>US\(</td><td>6,968</td><td>1,179</td></tr><tr><td colspan="6">Total</td><td>351,069</td><td>423,292</td></tr></table>

## Trade payables due to related parties, current:

<table><tr><td rowspan="2">Tax ID N°</td><td rowspan="2">Company</td><td rowspan="2">Nature</td><td rowspan="2">Country of origin</td><td rowspan="2">Currency</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Foreign</td><td>RS Agro Chemical Trading Corporation A.V.V.</td><td>Associate</td><td>Aruba</td><td>US\(</td><td>5,140</td><td>5,140</td></tr><tr><td>79.770.780-5</td><td>Serv. Integrales de Tránsito y Transf. S.A.</td><td>Other related parties</td><td>Chile</td><td>US\)</td><td>6,044</td><td>21,640</td></tr><tr><td>Foreign</td><td>SQM Beijing Commercial Co. Ltd.</td><td>Other related parties</td><td>China</td><td>US\(</td><td>-</td><td>-</td></tr><tr><td>79.947.100-0</td><td>SQM Industrial S.A.</td><td>Associate</td><td>Chile</td><td>US\)</td><td>12,294</td><td>31,661</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>US\(</td><td>485,587</td><td>412,507</td></tr><tr><td>Foreign</td><td>Covalent Lithium Pty Ltd.</td><td>Joint venture</td><td>Australia</td><td>US\)</td><td>232</td><td>9</td></tr><tr><td>79.768.170-9</td><td>Soquimich Comercial S.A.</td><td>Other related parties</td><td>Chile</td><td>US\(</td><td>319</td><td>-</td></tr><tr><td colspan="6">Total</td><td>509,616</td><td>470,957</td></tr></table>



## Summary Consolidated Classified Statements of Financial Position

<table><tr><td rowspan="2">Assets</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Current assets</td><td></td><td></td></tr><tr><td>Cash and cash equivalents</td><td>136,973</td><td>145,085</td></tr><tr><td>Trade receivables due from related parties, current</td><td>54,088</td><td>53,575</td></tr><tr><td>Current inventories</td><td>961,378</td><td>903,196</td></tr><tr><td>Other current assets</td><td>423,140</td><td>469,471</td></tr><tr><td>Total current assets</td><td>1,575,579</td><td>1,571,327</td></tr><tr><td>Non-current assets</td><td></td><td></td></tr><tr><td>Property, plant and equipment (net)</td><td>549,483</td><td>474,570</td></tr><tr><td>Other non-current assets</td><td>94,388</td><td>97,535</td></tr><tr><td>Total non-current assets</td><td>643,871</td><td>572,105</td></tr><tr><td>Total assets</td><td>2,219,450</td><td>2,143,432</td></tr></table>

<table><tr><td rowspan="2">Liabilities and Equity</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Current liabilities</td><td></td><td></td></tr><tr><td>Other current financial liabilities</td><td>5,855</td><td>52</td></tr><tr><td>Trade payables due to related parties, current</td><td>841,117</td><td>806,805</td></tr><tr><td>Other current liabilities</td><td>187,332</td><td>174,947</td></tr><tr><td>Total current liabilities</td><td>1,034,304</td><td>981,804</td></tr><tr><td>Non-current liabilities</td><td></td><td></td></tr><tr><td>Deferred tax liabilities</td><td>50,170</td><td>49,535</td></tr><tr><td>Other non-current liabilities</td><td>101,555</td><td>38,552</td></tr><tr><td>Total non-current liabilities</td><td>151,725</td><td>88,087</td></tr><tr><td>Total liabilities</td><td>1,186,029</td><td>1,069,891</td></tr><tr><td>Equity</td><td></td><td></td></tr><tr><td>Equity attributable to owners of the Parent</td><td>981,261</td><td>1,017,432</td></tr><tr><td>Non-controlling interests</td><td>52,160</td><td>56,109</td></tr><tr><td>Total equity</td><td>1,033,421</td><td>1,073,541</td></tr><tr><td>Total liabilities and equity</td><td>2,219,450</td><td>2,143,432</td></tr></table>



## SQM Industrial S.A. and Subsidiaries

## Summary Consolidated Statements of Income by Function

<table><tr><td rowspan="3">Consolidated Statements of Income</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Revenue</td><td>2,105,365</td><td>2,361,574</td></tr><tr><td>Cost of sales</td><td>(1,874,158)</td><td>(2,134,135)</td></tr><tr><td>Gross profit</td><td>231,207</td><td>227,439</td></tr><tr><td>Profit from operating activities</td><td>150,627</td><td>129,198</td></tr><tr><td>Profit before taxes</td><td>147,687</td><td>115,802</td></tr><tr><td>Income tax expense</td><td>(40,444)</td><td>(32,506)</td></tr><tr><td>Profit for the year</td><td>107,243</td><td>83,296</td></tr><tr><td>Profit attributable to Owners of the Parent</td><td>105,198</td><td>82,638</td></tr><tr><td>Profit attributable to Non-controlling interests</td><td>2,045</td><td>658</td></tr><tr><td>Profit for the year</td><td>107,243</td><td>83,296</td></tr></table>

## Summary Consolidated Statements of Comprehensive Income

<table><tr><td rowspan="3">Summary Consolidated Statements of Comprehensive Income</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Profit for the year</td><td>107,243</td><td>83,296</td></tr><tr><td>Changes in other comprehensive income</td><td>(1,434)</td><td>(1,447)</td></tr><tr><td>Total comprehensive income</td><td>105,809</td><td>81,849</td></tr><tr><td>Comprehensive income attributable to</td><td></td><td></td></tr><tr><td>Comprehensive income attributable to owners of the parent</td><td>103,822</td><td>80,924</td></tr><tr><td>Comprehensive income attributable to non-controlling interest</td><td>1,987</td><td>925</td></tr><tr><td>Total comprehensive income</td><td>105,809</td><td>81,849</td></tr></table>



## SQM Industrial S.A. and Subsidiaries

## Summary Consolidated Statements of Cash Flows

<table><tr><td rowspan="2">Consolidated Statements of Cash Flows</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Net cash generated used in operating activities</td><td>(33,325)</td><td>(114,187)</td></tr><tr><td>Net cash generated used in investing activities</td><td>(117,435)</td><td>(16,325)</td></tr><tr><td>Net cash generated from financing activities</td><td>142,468</td><td>63,982</td></tr><tr><td>Net decrease in cash and cash equivalents before the effect of changes in the exchange rate</td><td>(8,292)</td><td>(66,530)</td></tr><tr><td>Effects of exchange rate fluctuations on cash held</td><td>180</td><td>218</td></tr><tr><td>Net decrease in cash and cash equivalents</td><td>(8,112)</td><td>(66,312)</td></tr><tr><td>Cash and cash equivalents at beginning of period</td><td>145,085</td><td>211,397</td></tr><tr><td>Cash and cash equivalents at end of period</td><td>136,973</td><td>145,085</td></tr></table>



## SQM Industrial S.A. and Subsidiaries

Summary Consolidated Statements of Changes in Equity

<table><tr><td>Statements of Changes in Equity</td><td>Share capital</td><td>Foreign currency translation reserves</td><td>Reserve for (losses) gains from of defined benefit plans</td><td>Other miscellaneous reserves</td><td>Total Other reserves</td><td>Retained earnings</td><td>Equity attributable to owners of the Parent</td><td>Non-controlling interests</td><td>Total equity</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS$</td></tr><tr><td>Equity as of January 1, 2019</td><td>715,066</td><td>(11,950)</td><td>(3,201)</td><td>6,383</td><td>(8,768)</td><td>311,134</td><td>1,017,432</td><td>56,109</td><td>1,073,541</td></tr><tr><td>Net profit</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>105,198</td><td>105,198</td><td>2,045</td><td>107,243</td></tr><tr><td>Other comprehensive income</td><td>-</td><td>(72)</td><td>(1,304)</td><td>-</td><td>(1,376)</td><td>-</td><td>(1,376)</td><td>(58)</td><td>(1,434)</td></tr><tr><td>Comprehensive income</td><td>-</td><td>(72)</td><td>(1,304)</td><td>-</td><td>(1,376)</td><td>105,198</td><td>103,822</td><td>1,987</td><td>105,809</td></tr><tr><td>Dividends</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(140,000)</td><td>(140,000)</td><td>(5,935)</td><td>(145,935)</td></tr><tr><td>Increase in Equity</td><td>-</td><td>-</td><td>-</td><td>7</td><td>7</td><td>-</td><td>7</td><td>-</td><td>7</td></tr><tr><td>Increase (decrease) in equity</td><td>-</td><td>(72)</td><td>(1,304)</td><td>7</td><td>(1,368)</td><td>(34,802)</td><td>(36,171)</td><td>(3,949)</td><td>(40,120)</td></tr><tr><td>Equity as of December 31, 2019</td><td>715,066</td><td>(12,022)</td><td>(4,505)</td><td>6,390</td><td>(10,137)</td><td>276,332</td><td>981,261</td><td>52,160</td><td>1,033,421</td></tr></table>

<table><tr><td>Statements of Changes in Equity</td><td>Share capital</td><td>Foreign currency translation reserves</td><td>Reserve for (losses) gains from of defined benefit plans</td><td>Other miscellaneous reserves</td><td>Total Other reserves</td><td>Retained earnings</td><td>Equity attributable to owners of the Parent</td><td>Non-controlling interests</td><td>Total equity</td></tr><tr><td></td><td>MUS\(</td><td>MUS\)</td><td>MUS\(</td><td>MUS\)</td><td>MUS\(</td><td></td><td></td><td></td><td>MUS$</td></tr><tr><td>Equity as of January 1, 2018</td><td>715,066</td><td>(10,605)</td><td>(2,831)</td><td>6,383</td><td>(7,053)</td><td>228,496</td><td>936,509</td><td>43,385</td><td>979,894</td></tr><tr><td>Net profit</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>82,638</td><td>82,638</td><td>658</td><td>83,296</td></tr><tr><td>Other comprehensive income</td><td>-</td><td>(1,345)</td><td>(370)</td><td>-</td><td>(1,715)</td><td>-</td><td>(1,715)</td><td>268</td><td>(1,447)</td></tr><tr><td>Comprehensive income</td><td>-</td><td>(1,345)</td><td>(370)</td><td>-</td><td>(1,715)</td><td>82,638</td><td>80,923</td><td>926</td><td>81,849</td></tr><tr><td>Dividends</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>(8,910)</td><td>(8,910)</td></tr><tr><td>Increase (decrease) due to transfers and other changes</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td><td>20,708</td><td>20,708</td></tr><tr><td>Increase (decrease) in equity</td><td>-</td><td>(1,345)</td><td>(370)</td><td>-</td><td>(1,715)</td><td>82,638</td><td>80,923</td><td>12,724</td><td>93,647</td></tr><tr><td>Equity as of December 31, 2018</td><td>715,066</td><td>(11,950)</td><td>(3,201)</td><td>6,383</td><td>(8,768)</td><td>311,134</td><td>1,017,432</td><td>56,109</td><td>1,073,541</td></tr></table>



Balances and transactions with related parties

Detailed identification of the link between the Parent and subsidiary

As of December 31, 2019 and 2018, the detail of transactions with related parties is as follows:



## SQM Industrial S.A. and Subsidiaries

<table><tr><td rowspan="2">Tax ID No.</td><td rowspan="2">Company</td><td rowspan="2">Nature</td><td rowspan="2">Country of origin</td><td rowspan="2">Transaction</td><td>For the year ended December 31, 2019</td><td>For the year ended December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>96.592.190-7</td><td>SQM Nitratos S.A.</td><td>Common parent</td><td>Chile</td><td>Purchase products</td><td>167,481</td><td>185,486</td></tr><tr><td>96.592.190-7</td><td>SQM Nitratos S.A.</td><td>Common parent</td><td>Chile</td><td>Sale of fixed assets</td><td>1,019</td><td>221</td></tr><tr><td>96.592.190-7</td><td>SQM Nitratos S.A.</td><td>Common parent</td><td>Chile</td><td>Current account interest</td><td>13,537</td><td>15,025</td></tr><tr><td>96.592.190-7</td><td>SQM Nitratos S.A.</td><td>Common parent</td><td>Chile</td><td>Current account interest</td><td>66</td><td>152</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>Sale of services</td><td>237,617</td><td>181,299</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>Current account interest</td><td>2,486</td><td>2,840</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>Current account interest</td><td>3,446</td><td>6,069</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>Sale of services</td><td>573</td><td>484</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>Purchase fixed asset</td><td>-</td><td>14</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>Sale of fixed assets</td><td>1,509</td><td>1,568</td></tr><tr><td>79.626.800-K</td><td>SQM Salar S.A.</td><td>Common parent</td><td>Chile</td><td>Purchase products</td><td>83,854</td><td>81,016</td></tr><tr><td>79.626.800-K</td><td>SQM Salar S.A.</td><td>Common parent</td><td>Chile</td><td>Sale of product</td><td>272</td><td>217</td></tr><tr><td>79.626.800-K</td><td>SQM Salar S.A.</td><td>Common parent</td><td>Chile</td><td>Sale of services</td><td>9,963</td><td>11,038</td></tr><tr><td>79.626.800-K</td><td>SQM Salar S.A.</td><td>Common parent</td><td>Chile</td><td>Current account interest</td><td>72</td><td>3,759</td></tr><tr><td>79.626.800-K</td><td>SQM Salar S.A.</td><td>Common parent</td><td>Chile</td><td>Current account interest</td><td>774</td><td>799</td></tr><tr><td>76.425.380-9</td><td>Exploraciones Mineras</td><td>Other related parties</td><td>Chile</td><td>Current account interest</td><td>2</td><td>1</td></tr><tr><td>96.651.060-9</td><td>SQM Potasio S.A.</td><td>Common parent</td><td>Chile</td><td>Current account interest</td><td>27</td><td>181</td></tr><tr><td>96.651.060-9</td><td>SQM Potasio S.A.</td><td>Common parent</td><td>Chile</td><td>Services received</td><td>886</td><td>853</td></tr><tr><td>Foreign</td><td>Royal Seed Trading Corporation V.V.V.</td><td>Other related parties</td><td>Aruba</td><td>Current account interest</td><td>-</td><td>774</td></tr><tr><td>Foreign</td><td>SQM Investment Corporation N.V</td><td>Other related parties</td><td>Dutch Antilles</td><td>Current account interest</td><td>509</td><td>829</td></tr><tr><td>Foreign</td><td>Ajay Europe SARL</td><td>Associate</td><td>France</td><td>Sale of product</td><td>21,348</td><td>19,768</td></tr><tr><td>Foreign</td><td>SQMC Holding Corporation L.L.P.</td><td>Other related parties</td><td>United States</td><td>Current account interest</td><td>407</td><td>212</td></tr><tr><td>Foreign</td><td>Abu Dhabi Fertilizer Industries WWL.</td><td>Associate</td><td>United Arab Emirates</td><td>Sale of product</td><td>3,749</td><td>5,811</td></tr><tr><td>Foreign</td><td>Ajay North America LLC</td><td>Other related parties</td><td>United States</td><td>Sale of product</td><td>16,932</td><td>16,810</td></tr><tr><td>Foreign</td><td>Doktor Tarsa Tarim Sanayi AS</td><td>Associate</td><td>Turkey</td><td>Sale of product</td><td>14,767</td><td>16,726</td></tr><tr><td>Foreign</td><td>Charlee SQM Thailand Co. Ltd.</td><td>Associate</td><td>Thailand</td><td>Sale of product</td><td>-</td><td>5,261</td></tr><tr><td>Foreign</td><td>Coromandel SQM</td><td>Joint venture</td><td>India</td><td>Sale of product</td><td>3,955</td><td>7,696</td></tr><tr><td>Foreign</td><td>SQM Vitas Brasil Agroindustria</td><td>Joint venture</td><td>Brazil</td><td>Sale of product</td><td>29,573</td><td>32,272</td></tr><tr><td>Foreign</td><td>SQM Vitas Perú S.A.C.</td><td>Joint venture</td><td>Perú</td><td>Sale of product</td><td>17,197</td><td>15,522</td></tr><tr><td>Foreign</td><td>Plantacote NV</td><td>Associate</td><td>Belgium</td><td>Sale of product</td><td>4,096</td><td>4,554</td></tr><tr><td>Foreign</td><td>Terra Tarsa Ukraine LLC</td><td>Associate</td><td>Ukraine</td><td>Sale of product</td><td>1,280</td><td>1,677</td></tr><tr><td>Foreign</td><td>Terra Tarsa Don LLC</td><td>Associate</td><td>Russian Federation</td><td>Sale of product</td><td>40</td><td>187</td></tr><tr><td>Foreign</td><td>Arpa Speciali S.R.L</td><td>Other related parties</td><td>Italy</td><td>Sale of product</td><td>2,359</td><td>207</td></tr><tr><td>Foreign</td><td>SQM Eastmed Turkey</td><td>Associate</td><td>Turkey</td><td>Sale of product</td><td>47</td><td>30</td></tr><tr><td>Foreign</td><td>Pavoni &amp; C., Spa</td><td>Joint venture</td><td>Italy</td><td>Sale of product</td><td>3,152</td><td>201</td></tr><tr><td>Foreign</td><td>SQM Star Qingdao Corp Nutrition Co., Ltd.</td><td>Joint venture</td><td>China</td><td>Sale of product</td><td>1,929</td><td>-</td></tr></table>



## SQM Industrial S.A. and Subsidiaries

Trade receivables due from related parties, current:

<table><tr><td rowspan="2">Tax ID No.</td><td rowspan="2">Company</td><td rowspan="2">Nature</td><td rowspan="2">Country of origin</td><td rowspan="2">Currency</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Foreign</td><td>Arpa Speciali S.R.L</td><td>Other related parties</td><td>Italy</td><td>Euro</td><td>134</td><td>-</td></tr><tr><td>Foreign</td><td>Comercial Caiman Int. S.A.</td><td>Other related parties</td><td>Panama</td><td>US\(</td><td>805</td><td>801</td></tr><tr><td>76.686.311-9</td><td>SQM Mag SPA</td><td>Other related parties</td><td>Chile</td><td>US\)</td><td>4</td><td>-</td></tr><tr><td>76.425.380-9</td><td>Exploraciones Mineras S.A.</td><td>Other related parties</td><td>Chile</td><td>US\(</td><td>40</td><td>38</td></tr><tr><td>96.592.180-K</td><td>Ajay SQM Chile S.A.</td><td>Other related parties</td><td>Chile</td><td>US\)</td><td>35</td><td>-</td></tr><tr><td>Foreign</td><td>Soquimich SRL Argentina</td><td>Subsidiary</td><td>Argentina</td><td>US\(</td><td>158</td><td>158</td></tr><tr><td>Foreign</td><td>Terra Tarsa Ukraine LLC</td><td>Associate</td><td>Ukraine</td><td>Ukrainian grivna</td><td>7</td><td>-</td></tr><tr><td>96.511.530-7</td><td>Soc. Inv P. Calichera S.A.</td><td>Jointly controlled entity</td><td>Chile</td><td>US\(</td><td>5</td><td>6</td></tr><tr><td>Foreign</td><td>Abu Dhabi Fertilizer Ind</td><td>Other related parties</td><td>United Arab Emirates</td><td>US\)</td><td>803</td><td>857</td></tr><tr><td>Foreign</td><td>Ajay Europe SARL</td><td>Other related parties</td><td>France</td><td>US\(</td><td>3,489</td><td>3,536</td></tr><tr><td>Foreign</td><td>Ajay North América llc</td><td>Other related parties</td><td>United States</td><td>US\)</td><td>2,318</td><td>2,716</td></tr><tr><td>Foreign</td><td>Terra Tarsa Don LLC</td><td>Other related parties</td><td>Russian Federation</td><td>Russian ruble</td><td>13</td><td>41</td></tr><tr><td>Foreign</td><td>Coromandel SQM India</td><td>Joint venture</td><td>India</td><td>Indian rupee</td><td>1,792</td><td>2,026</td></tr><tr><td>Foreign</td><td>Plantacote N.V.</td><td>Joint venture</td><td>Belgium</td><td>Euro</td><td>657</td><td>312</td></tr><tr><td>Foreign</td><td>SQM Star Qingdao Corp Nutrition Co., Ltd</td><td>Joint venture</td><td>China</td><td>US\(</td><td>-</td><td>248</td></tr><tr><td>Foreign</td><td>SQM Vitas Brasil Agroindustria</td><td>Joint venture</td><td>Brazil</td><td>US\)</td><td>15,049</td><td>13,395</td></tr><tr><td>Foreign</td><td>SQM Vitas Fzco.</td><td>Joint venture</td><td>United Arab Emirates</td><td>US\(</td><td>169</td><td>39</td></tr><tr><td>Foreign</td><td>SQM Vitas Perú S.A.C</td><td>Joint venture</td><td>Perú</td><td>US\)</td><td>16,507</td><td>11,588</td></tr><tr><td>Foreign</td><td>Royal Seed Trading Corporation V.V.V.</td><td>Other related parties</td><td>Aruba</td><td>US\(</td><td>11,275</td><td>11,275</td></tr><tr><td>Foreign</td><td>Doktor Tarsa Tarim Sanayi AS</td><td>Other related parties</td><td>Turkey</td><td>US\)</td><td>110</td><td>6,497</td></tr><tr><td>Foreign</td><td>SQM Eastmed Turkey</td><td>Other related parties</td><td>Turkey</td><td>Euro</td><td>47</td><td>30</td></tr><tr><td>Foreign</td><td>Pavoni &amp; C., Spa</td><td>Joint venture</td><td>Italy</td><td>Euro</td><td>1,028</td><td>12</td></tr><tr><td>Foreign</td><td>Provision</td><td></td><td></td><td></td><td>(357)</td><td>-</td></tr><tr><td>Total</td><td></td><td></td><td></td><td></td><td>54,088</td><td>53,575</td></tr></table>

The receivables for Sichuan SQM Migao Chemical Fertilizers Co Ltd. are presented net of provisions (allowance for bad debts as of December 31, 2019 ThUS$ 10,965 and December 31, 2018 ThUS$ 10,965).



## SQM Industrial S.A. and Subsidiaries

Trade payables due to related parties, current:

<table><tr><td rowspan="2">Tax ID No.</td><td rowspan="2">Company</td><td rowspan="2">Nature</td><td rowspan="2">Country of origin</td><td rowspan="2">Currency</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Foreign</td><td>SQM Investment Co.</td><td>Other related parties</td><td>Dutch Antilles</td><td>US\(</td><td>5,550</td><td>36,267</td></tr><tr><td>96.592.190-7</td><td>SQM Nitratos S.A.</td><td>Other related parties</td><td>Chile</td><td>US\)</td><td>356,516</td><td>348,697</td></tr><tr><td>79.626.800-k</td><td>SQM Salar S.A.</td><td>Other related parties</td><td>Chile</td><td>US\(</td><td>291,794</td><td>309,060</td></tr><tr><td>96.651.060-9</td><td>SQM Potasio S.A.</td><td>Common parent</td><td>Chile</td><td>Peso</td><td>571</td><td>919</td></tr><tr><td>Foreign</td><td>SQMC Holding Corporation L.L.P.</td><td>Other related parties</td><td>United States</td><td>US\)</td><td>26,307</td><td>23,754</td></tr><tr><td>Foreign</td><td>SQM Star Qingdao Corp Nutrition Co., Ltd.</td><td>Joint venture</td><td>China</td><td>US\(</td><td>243</td><td>-</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>US\)</td><td>160,136</td><td>88,108</td></tr><tr><td>Total</td><td></td><td></td><td></td><td></td><td>841,117</td><td>806,805</td></tr></table>



## SQM Nitratos S.A.

## Summary Classified Statements of Financial Position

<table><tr><td rowspan="2">Assets</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Current assets</td><td></td><td></td></tr><tr><td>Cash and cash equivalents</td><td>285</td><td>14</td></tr><tr><td>Trade receivables due from related parties, current</td><td>356,532</td><td>352,671</td></tr><tr><td>Current inventories</td><td>11,030</td><td>8,878</td></tr><tr><td>Other current assets</td><td>627</td><td>2,929</td></tr><tr><td>Total current assets</td><td>368,474</td><td>364,492</td></tr><tr><td>Non-current assets</td><td></td><td></td></tr><tr><td>Property, plant and equipment</td><td>34,049</td><td>26,012</td></tr><tr><td>Other non-current assets</td><td>7,639</td><td>7,703</td></tr><tr><td>Total non-current assets</td><td>41,688</td><td>33,715</td></tr><tr><td>Total assets</td><td>410,162</td><td>398,207</td></tr></table>

<table><tr><td rowspan="2">Liabilities and Equity</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Current liabilities</td><td></td><td></td></tr><tr><td>Trade payables due to related parties, current</td><td>274,647</td><td>281,600</td></tr><tr><td>Other current liabilities</td><td>17,888</td><td>28,462</td></tr><tr><td>Total current liabilities</td><td>292,535</td><td>310,062</td></tr><tr><td>Non-current liabilities</td><td></td><td></td></tr><tr><td>Deferred tax liabilities</td><td>2,874</td><td>1,156</td></tr><tr><td>Provisions for employee benefits, non-current</td><td>647</td><td>465</td></tr><tr><td>Total non-current liabilities</td><td>3,521</td><td>1,621</td></tr><tr><td>Total liabilities</td><td>296,056</td><td>311,683</td></tr><tr><td>Equity</td><td></td><td></td></tr><tr><td>Equity attributable to owners of the Parent</td><td>114,106</td><td>86,524</td></tr><tr><td>Total equity</td><td>114,106</td><td>86,524</td></tr><tr><td>Total liabilities and equity</td><td>410,162</td><td>398,207</td></tr></table>



## SQM Nitratos S.A.

## Summary Statements of Income by Function

<table><tr><td rowspan="2">Statements of Income by Function</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Revenue</td><td>167,481</td><td>185,487</td></tr><tr><td>Cost of sales</td><td>(112,896)</td><td>(137,482)</td></tr><tr><td>Gross profit</td><td>54,585</td><td>48,005</td></tr><tr><td>Profit (loss) from operating activities</td><td>54,271</td><td>45,793</td></tr><tr><td>Profit (loss) before taxes</td><td>57,866</td><td>49,020</td></tr><tr><td>Income tax expense</td><td>(18,336)</td><td>(16,488)</td></tr><tr><td>Profit for the year</td><td>39,530</td><td>32,532</td></tr></table>

## Summary Statements of Comprehensive Income

<table><tr><td rowspan="2">Statements of Comprehensive Income</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Profit for the year</td><td>39,530</td><td>32,532</td></tr><tr><td>(Losses) gains from measurements of defined benefit plans</td><td>(90)</td><td>14</td></tr><tr><td>Total comprehensive income</td><td>39,440</td><td>32,546</td></tr></table>



## SQM Nitratos S.A.

Summary Statements of Cash Flows

<table><tr><td rowspan="2">Statements of Cash Flows</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Net cash generated from (used in) operating activities</td><td>1.605</td><td>(63)</td></tr><tr><td>Net cash generated used in investing activities</td><td>(19,661)</td><td>(6,364)</td></tr><tr><td>Net cash generated from financing activities</td><td>18,322</td><td>5,609</td></tr><tr><td>Net increase (decrease) in cash and cash equivalents before the effect of changes in the exchange rate</td><td>266</td><td>(818)</td></tr><tr><td>Effects of exchange rate fluctuations on cash held</td><td>5</td><td>(1)</td></tr><tr><td>Net decrease in cash and cash equivalents</td><td>271</td><td>(819)</td></tr><tr><td>Cash and cash equivalents at beginning of period</td><td>14</td><td>833</td></tr><tr><td>Cash and cash equivalents at end of period</td><td>285</td><td>14</td></tr></table>

Note: All cash flows related to the operation of SQM Nitratos are made by SQM S.A.



Summary Statements of Changes in Equity

<table><tr><td rowspan="2">Statements of Changes in Equity</td><td>Share capital</td><td>Reserve for (losses) gains from defined benefit plans</td><td>Retained earnings</td><td>Total equity</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Equity as of January 1, 2019</td><td>30,350</td><td>14</td><td>56,160</td><td>86,524</td></tr><tr><td>Net profit</td><td>-</td><td>-</td><td>39,530</td><td>39,530</td></tr><tr><td>Other comprehensive income</td><td>-</td><td>(90)</td><td>-</td><td>(90)</td></tr><tr><td>Comprehensive income</td><td>-</td><td>(90)</td><td>39,530</td><td>39,440</td></tr><tr><td>Dividends</td><td>-</td><td>-</td><td>(11,858)</td><td>(11,858)</td></tr><tr><td>Increase (decrease) in equity</td><td>-</td><td>(90)</td><td>27,672</td><td>27,582</td></tr><tr><td>Equity as of December 31, 2019</td><td>30,350</td><td>(76)</td><td>83,832</td><td>114,106</td></tr></table>

<table><tr><td rowspan="2">Statements of Changes in Equity</td><td>Share capital</td><td>Reserve for (losses) gains from defined benefit plans</td><td>Retained earnings</td><td>Total equity</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Equity as of January 1, 2018</td><td>30,350</td><td>-</td><td>33,388</td><td>63,738</td></tr><tr><td>Net profit</td><td>-</td><td>-</td><td>32,532</td><td>32,532</td></tr><tr><td>Other comprehensive income</td><td>-</td><td>14</td><td>-</td><td>14</td></tr><tr><td>Comprehensive income</td><td>-</td><td>14</td><td>32,532</td><td>32,546</td></tr><tr><td>Dividends</td><td>-</td><td>-</td><td>(9,760)</td><td>(9,760)</td></tr><tr><td>Increase (decrease) in equity</td><td>-</td><td>14</td><td>22,772</td><td>22,786</td></tr><tr><td>Equity as of December 31, 2018</td><td>30,350</td><td>14</td><td>56,160</td><td>86,524</td></tr></table>



## Related party disclosures

As of December 31, 2019 and December 31, 2018, the detail of transactions with related parties is as follows:

<table><tr><td rowspan="2">Tax ID No.</td><td rowspan="2">Company</td><td rowspan="2">Nature</td><td rowspan="2">Country of origin</td><td rowspan="2">Transaction</td><td>For the year ended December 31, 2019</td><td>For the year ended December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>79.947.100-0</td><td>SQM Industrial S.A.</td><td>Common parent</td><td>Chile</td><td>Sale of products</td><td>167,481</td><td>185,487</td></tr><tr><td>79.947.100-0</td><td>SQM Industrial S.A.</td><td>Common parent</td><td>Chile</td><td>Current account interest</td><td>13,537</td><td>15,025</td></tr><tr><td>79.947.100-0</td><td>SQM Industrial S.A.</td><td>Common parent</td><td>Chile</td><td>Miscellaneous services</td><td>5,461</td><td>4,789</td></tr><tr><td>79.947.100-0</td><td>SQM Industrial S.A.</td><td>Common parent</td><td>Chile</td><td>Purchase of materials and supplies</td><td>12,615</td><td>11,421</td></tr><tr><td>79.947.100-0</td><td>SQM Industrial S.A.</td><td>Common parent</td><td>Chile</td><td>Purchase fixed asset</td><td>1,019</td><td>221</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>Mining concession rental service</td><td>19,999</td><td>30,306</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>Services received</td><td>9</td><td>15</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>Current account interest</td><td>9,423</td><td>12,663</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>Payment of value added tax</td><td>14,490</td><td>17,213</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>Miscellaneous services</td><td>1,176</td><td>1,023</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>Energy Services received</td><td>66</td><td>83</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>Provisional monthly payment</td><td>14,623</td><td>7,733</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>Dividends</td><td>11,859</td><td>9,760</td></tr><tr><td>79.770.780-5</td><td>Serv. Integrales de Tránsito y Transferencias S.A.</td><td>Other related parties</td><td>Chile</td><td>Current account interest</td><td>66</td><td>152</td></tr><tr><td>79.626.800-K</td><td>SQM Salar S.A.</td><td>Other related parties</td><td>Chile</td><td>Current account interest</td><td>5</td><td>12</td></tr><tr><td>96.651.060-9</td><td>SQM Potasio S.A.</td><td>Common parent</td><td>Chile</td><td>Current account interest</td><td>146</td><td>283</td></tr><tr><td>96.651.060-9</td><td>SQM Potasio S.A.</td><td>Common parent</td><td>Chile</td><td>Camp Service</td><td>1,098</td><td>1,084</td></tr></table>



## Trade receivables due from related parties, current

<table><tr><td rowspan="2">Tax ID No.</td><td rowspan="2">Company</td><td rowspan="2">Nature</td><td rowspan="2">Country of origin</td><td rowspan="2">Transaction</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>79.947.100-0</td><td>SQM Industrial S.A.</td><td>Common parent</td><td>Chile</td><td>US$</td><td>356,532</td><td>352,671</td></tr><tr><td>Total</td><td></td><td></td><td></td><td></td><td>356,532</td><td>352,671</td></tr></table>

## Trade payables due to related parties, current

<table><tr><td rowspan="2">Tax ID No.</td><td rowspan="2">Company</td><td rowspan="2">Nature</td><td rowspan="2">Country of origin</td><td rowspan="2">Transaction</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>MUS\(</td><td>MUS\)</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>US\(</td><td>273,446</td><td>269,054</td></tr><tr><td>96.651.060-9</td><td>SQM Potasio S.A.</td><td>Other related parties</td><td>Chile</td><td>US\)</td><td>820</td><td>7,885</td></tr><tr><td>79.770.780-5</td><td>Serv. Integrales de Tránsito y Transferencias S.A.</td><td>Other related parties</td><td>Chile</td><td>US\(</td><td>16</td><td>3,975</td></tr><tr><td>79.626.800-K</td><td>SQM Salar S.A.</td><td>Other related parties</td><td>Chile</td><td>US\)</td><td>1</td><td>322</td></tr><tr><td>76.425.380-9</td><td>Exploraciones Mineras S.A.</td><td>Other related parties</td><td>Chile</td><td>US$</td><td>364</td><td>364</td></tr><tr><td>Total</td><td></td><td></td><td></td><td></td><td>274,647</td><td>281,600</td></tr></table>



## Orcoma SPA

## Summary Classified Statements of Financial Position

<table><tr><td rowspan="2">Assets</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Non-current assets</td><td></td><td></td></tr><tr><td>Intangible assets other than goodwill</td><td>2,357</td><td>2,357</td></tr><tr><td>Deferred tax assets</td><td>4</td><td>4</td></tr><tr><td>Total non-current assets</td><td>2,361</td><td>2,361</td></tr><tr><td>Total assets</td><td>2,361</td><td>2,361</td></tr></table>

<table><tr><td rowspan="2">Liabilities and Equity</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>MUS\(</td><td>MUS\)</td></tr><tr><td>Current liabilities</td><td></td><td></td></tr><tr><td>Trade payables due to related parties, current</td><td>14</td><td>13</td></tr><tr><td>Total current liabilities</td><td>14</td><td>13</td></tr><tr><td>Total liabilities</td><td>14</td><td>13</td></tr><tr><td>Equity</td><td></td><td></td></tr><tr><td>Share capital</td><td>2,358</td><td>2,358</td></tr><tr><td>Retained earnings</td><td>(11)</td><td>(11)</td></tr><tr><td>Total equity</td><td>2,347</td><td>2,347</td></tr><tr><td>Total liabilities and equity</td><td>2,361</td><td>2,361</td></tr></table>



## Orcoma SPA

Summary Statements of Changes in Equity

<table><tr><td>Statements of Changes in Equity</td><td>Share capital</td><td>Retained earnings</td><td>Equity attributable to owners of the Parent</td><td>Total equity</td></tr><tr><td></td><td>MUS\(</td><td></td><td></td><td>MUS\)</td></tr><tr><td>Equity as of January 1, 2019</td><td>2,358</td><td>(11)</td><td>2,347</td><td>2,347</td></tr><tr><td>Net profit</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Comprehensive income</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Increase (decrease) in equity</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Equity as of December 31, 2019</td><td>2,358</td><td>(11)</td><td>2,347</td><td>2,347</td></tr></table>

<table><tr><td>Statements of Changes in Equity</td><td>Share capital</td><td>Retained earnings</td><td>Equity attributable to owners of the Parent</td><td>Total equity</td></tr><tr><td></td><td>MUS\(</td><td></td><td></td><td>MUS\)</td></tr><tr><td>Equity as of January 1, 2018</td><td>2,358</td><td>(11)</td><td>2,347</td><td>2,347</td></tr><tr><td>Net profit</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Comprehensive income</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Increase (decrease) in equity</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Equity as of December 31, 2018</td><td>2,358</td><td>(11)</td><td>2,347</td><td>2,347</td></tr></table>

## Transactions with related parties

As of December 31, 2019 and 2018, there were no transactions with related entities.



## Rs Agro Chemical Trading Corporation A.V.V.

## Summary Classified Statements of Financial Position

<table><tr><td rowspan="2">Assets</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Currents assets</td><td></td><td></td></tr><tr><td>Cash and cash equivalents</td><td>6</td><td>6</td></tr><tr><td>Trade receivables due from related parties, current</td><td>5,149</td><td>5,149</td></tr><tr><td>Total current assets</td><td>5,155</td><td>5,155</td></tr><tr><td>Total assets</td><td>5,155</td><td>5,155</td></tr></table>

<table><tr><td rowspan="2">Liabilities and Equity</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Current liabilities</td><td></td><td></td></tr><tr><td>Trade and other payables, current</td><td>2</td><td>2</td></tr><tr><td>Trade payables due to related parties, current</td><td>62</td><td>37</td></tr><tr><td>Total current liabilities</td><td>64</td><td>39</td></tr><tr><td>Total liabilities</td><td>64</td><td>39</td></tr></table>

<table><tr><td>Equity</td><td></td><td></td></tr><tr><td>Share capital</td><td>6</td><td>6</td></tr><tr><td>Retained earnings</td><td>5,085</td><td>5,110</td></tr><tr><td>Total equity</td><td>5,091</td><td>5,116</td></tr><tr><td>Total liabilities and equity</td><td>5,155</td><td>5,155</td></tr></table>

## Summary Statements of comprehensive income

<table><tr><td rowspan="3">Statements of comprehensive Income</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Other expenses per function</td><td>(25)</td><td>(24)</td></tr><tr><td>Loss from operating activities</td><td>(25)</td><td>(24)</td></tr><tr><td>Finance Costs</td><td>-</td><td>(1)</td></tr><tr><td>Loss before taxes</td><td>(25)</td><td>(25)</td></tr><tr><td>Total comprehensive loss</td><td>(25)</td><td>(25)</td></tr></table>



## Rs Agro Chemical Trading Corporation A.V.V.

Summary Statements of Cash Flows

<table><tr><td rowspan="3">Statements of Cash Flows</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Net cash generated from (used in) operating activities</td><td></td><td></td></tr><tr><td>Net cash generated from (used in) operating activities</td><td>-</td><td>(2)</td></tr><tr><td>Net increase (decrease) in cash and cash equivalents before the effect of changes in the exchange rate</td><td>-</td><td>(2)</td></tr><tr><td>Cash and cash equivalents at beginning of period</td><td>6</td><td>8</td></tr><tr><td>Cash and cash equivalents at end of period</td><td>6</td><td>6</td></tr></table>

## Summary Statements of Changes in Equity

<table><tr><td>Statements of Changes in Equity</td><td>Share capital</td><td>Retained earnings</td><td>Total equity</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td></tr><tr><td>Equity as of January 1, 2019</td><td>6</td><td>5,110</td><td>5,116</td></tr><tr><td>Net loss</td><td>-</td><td>(25)</td><td>(25)</td></tr><tr><td>Comprehensive loss</td><td></td><td>(25)</td><td>(25)</td></tr><tr><td>Decrease in equity</td><td></td><td>(25)</td><td>(25)</td></tr><tr><td>Equity as of December 31, 2019</td><td>6</td><td>5,085</td><td>5,091</td></tr></table>

<table><tr><td>Statements of Changes in Equity</td><td>Share capital</td><td>Retained earnings</td><td>Total equity</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS\(</td></tr><tr><td>Equity as of January 1, 2018</td><td>6</td><td>5,135</td><td>5,141</td></tr><tr><td>Net loss</td><td>-</td><td>(25)</td><td>(25)</td></tr><tr><td>Comprehensive loss</td><td>-</td><td>(25)</td><td>(25)</td></tr><tr><td>Decrease in equity</td><td>-</td><td>(25)</td><td>(25)</td></tr><tr><td>Equity as of December 31, 2018</td><td>6</td><td>5,110</td><td>5,116</td></tr></table>



## Rs Agro Chemical Trading Corporation A.V.V.

## Transactions with related parties

Trade receivables due from related parties, current:

<table><tr><td rowspan="2">Tax ID N°</td><td rowspan="2">Company</td><td rowspan="2">Nature</td><td rowspan="2">Country of origin</td><td rowspan="2">Currency</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Foreign</td><td>SQM Investment Corporation</td><td>Associate</td><td>Aruba</td><td>US$</td><td>5,149</td><td>5,149</td></tr><tr><td colspan="5">Total</td><td>5,149</td><td>5,149</td></tr></table>

Trade payables due to related parties, current:

<table><tr><td rowspan="2">Tax ID N°</td><td rowspan="2">Company</td><td rowspan="2">Nature</td><td rowspan="2">Country of origin</td><td rowspan="2">Currency</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>US\(</td><td>53</td><td>28</td></tr><tr><td>Foreign</td><td>Royal Seed Trading Co.</td><td>Other related parties</td><td>Aruba</td><td>US\)</td><td>9</td><td>9</td></tr><tr><td colspan="5">Total</td><td>62</td><td>37</td></tr></table>



## Orcoma Estudios SPA

## Summary Classified Statements of Financial Position

<table><tr><td rowspan="2">Assets</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Currents assets</td><td></td><td></td></tr><tr><td>Cash and cash equivalents</td><td>154</td><td>294</td></tr><tr><td>Other non financial assets, current</td><td>2</td><td>2</td></tr><tr><td>Total current assets</td><td>156</td><td>296</td></tr><tr><td>Non-current assets</td><td></td><td></td></tr><tr><td>Other non-current financial assets</td><td>1,240</td><td>-</td></tr><tr><td>Property, plant and equipment</td><td>3,281</td><td>4,416</td></tr><tr><td>Total non-current assets</td><td>4,521</td><td>4,416</td></tr><tr><td>Total assets</td><td>4,677</td><td>4,712</td></tr></table>

<table><tr><td rowspan="2">Liabilities and Equity</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Current liabilities</td><td></td><td></td></tr><tr><td>Trade and other payables, current</td><td>1</td><td>2</td></tr><tr><td>Trade payables due to related parties, current</td><td>27</td><td>61</td></tr><tr><td>Current tax liabilities</td><td>-</td><td>-</td></tr><tr><td>Total current liabilities</td><td>28</td><td>63</td></tr><tr><td>Non-current liabilities</td><td></td><td></td></tr><tr><td>Deferred tax liabilities</td><td>-</td><td>1</td></tr><tr><td>Total non-current liabilities</td><td>-</td><td>1</td></tr><tr><td>Total liabilities</td><td>28</td><td>64</td></tr></table>

<table><tr><td>Equity</td><td></td><td></td></tr><tr><td>Share capital</td><td>4,632</td><td>4,632</td></tr><tr><td>Retained earnings</td><td>17</td><td>16</td></tr><tr><td>Total equity</td><td>4,649</td><td>4,648</td></tr><tr><td>Total liabilities and equity</td><td>4,677</td><td>4,712</td></tr></table>



## Orcoma Estudios SPA

## Summary Statements of Income by Function

<table><tr><td rowspan="2">Statements of Income by Function</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Foreign currency translation differences</td><td>1</td><td>1</td></tr><tr><td>Profit before taxes</td><td>1</td><td>1</td></tr><tr><td>Income tax expense</td><td>(1)</td><td>-</td></tr><tr><td>Profit for the year</td><td>-</td><td>1</td></tr></table>

## Summary Statements of Comprehensive Income

<table><tr><td rowspan="2">Statements of Comprehensive Income</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Other comprehensive income</td><td>-</td><td>-</td></tr><tr><td>Total comprehensive income</td><td>-</td><td>1</td></tr></table>

## Summary Statements of Cash Flows

<table><tr><td rowspan="2">Statements of Cash Flows</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Net cash generated (used in) from operating activities</td><td>(35)</td><td>15</td></tr><tr><td>Net cash generated used in investing activities</td><td>(105)</td><td>(60)</td></tr><tr><td>Net increase (decrease) in cash and cash equivalents before the effect of changes in the exchange rate</td><td>(140)</td><td>(45)</td></tr><tr><td>Cash and cash equivalents at beginning of period</td><td>294</td><td>339</td></tr><tr><td>Cash and cash equivalents at end of period</td><td>154</td><td>294</td></tr></table>



## Orcoma Estudios SPA

## Summary Statements of Changes in Equity

<table><tr><td>Statements of Changes in Equity</td><td>Share capital</td><td>Retained earnings</td><td>Total equity</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS$</td></tr><tr><td>Equity as of January 1, 2019</td><td>4,632</td><td>16</td><td>4,648</td></tr><tr><td>Net profit</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Comprehensive income</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Increase (decrease) in equity</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Equity as of December 31, 2019</td><td>4,632</td><td>16</td><td>4,648</td></tr></table>

<table><tr><td>Statements of Changes in Equity</td><td>Share capital</td><td>Retained earnings</td><td>Total equity</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td><td>ThUS$</td></tr><tr><td>Equity as of January 1, 2018</td><td>4,632</td><td>15</td><td>4,647</td></tr><tr><td>Net profit</td><td>-</td><td>1</td><td>1</td></tr><tr><td>Comprehensive income</td><td>-</td><td>1</td><td>1</td></tr><tr><td>Increase (decrease) in equity</td><td>-</td><td>1</td><td>1</td></tr><tr><td>Equity as of December 31, 2018</td><td>4,632</td><td>16</td><td>4,648</td></tr></table>



## Related party disclosures

As of December 31, 2019 and December 31, 2018, there are no transactions with related entities.

## Relationships between the parent and the entity

Orcoma Estudios SPA is controlled by two shareholders, Sociedad Química y Minera de Chile S.A. and IM Inversiones Limitada, with ownership percentages of 51% and 49%, respectively.

Sociedad Química y Minera de Chile S.A. is registered with the Securities Registry of the Chilean Commission for Financial Markets (CMF) ex Superintendence of Securities and Insurance under No. 0184 of March 18, 1983 and accordingly, is subject to the oversight of such regulating authority.

## Detailed identification of the link between Orcoma Estudios SPA and subsidiary

As of December 31, 2019 and December 31, 2018, the detail of entities that are related parties is as follows:

<table><tr><td rowspan="2">Tax ID N°</td><td rowspan="2">Company</td><td rowspan="2">Nature</td><td rowspan="2">Country of origin</td><td rowspan="2">Functional currency</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>US$</td><td>27</td><td>61</td></tr><tr><td colspan="5">Total</td><td>27</td><td>61</td></tr></table>



## Ajay SQM Chile

## Summary Classified Statements of Financial Position

<table><tr><td rowspan="2">Assets</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Currents assets</td><td></td><td></td></tr><tr><td>Cash and cash equivalents</td><td>77</td><td>2,633</td></tr><tr><td>Trade receivables due from related parties, current</td><td>2,512</td><td>5,912</td></tr><tr><td>Current inventories</td><td>9,506</td><td>5,384</td></tr><tr><td>Other current assets</td><td>5,685</td><td>4,330</td></tr><tr><td>Total current assets</td><td>17,780</td><td>18,259</td></tr><tr><td>Non-current assets</td><td></td><td></td></tr><tr><td>Property, plant and equipment</td><td>1,115</td><td>1,167</td></tr><tr><td>Other non-current assets</td><td>145</td><td>131</td></tr><tr><td>Total non-current assets</td><td>1,260</td><td>1,298</td></tr><tr><td>Total assets</td><td>19,040</td><td>19,557</td></tr></table>

<table><tr><td rowspan="2">Liabilities and Equity</td><td>As of December 31, 2019</td><td>As of December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Current liabilities</td><td></td><td></td></tr><tr><td>Trade payables due to related parties, current</td><td>731</td><td>659</td></tr><tr><td>Other current liabilities</td><td>553</td><td>837</td></tr><tr><td>Total current liabilities</td><td>1,284</td><td>1,496</td></tr><tr><td>Non-current liabilities</td><td></td><td></td></tr><tr><td>Provisions for employee benefits, non-current</td><td>374</td><td>389</td></tr><tr><td>Total non-current liabilities</td><td>374</td><td>389</td></tr><tr><td>Total liabilities</td><td>1,658</td><td>1,885</td></tr><tr><td>Equity</td><td></td><td></td></tr><tr><td>Equity attributable to owners of the Parent</td><td>17,382</td><td>17,672</td></tr><tr><td>Total equity</td><td>17,382</td><td>17,672</td></tr><tr><td>Total liabilities and equity</td><td>19,040</td><td>19,557</td></tr></table>



## Ajay SQM Chile

## Summary Statements of Income by Function

<table><tr><td rowspan="3">Statement of Income by Function</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Revenue</td><td>24,882</td><td>32,758</td></tr><tr><td>Cost of sales</td><td>(21,463)</td><td>(28,262)</td></tr><tr><td>Gross profit</td><td>3,419</td><td>4,496</td></tr><tr><td>Profit from operating activities</td><td>2,162</td><td>3,467</td></tr><tr><td>Profit before taxes</td><td>2,098</td><td>3,310</td></tr><tr><td>Income tax expense</td><td>(588)</td><td>(910)</td></tr><tr><td>Profit for the year</td><td>1,510</td><td>2,400</td></tr></table>

## Summary Statements of Comprehensive Income

<table><tr><td rowspan="3">Statements of Comprehensive Income</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Profit for the year</td><td>1,510</td><td>2,400</td></tr><tr><td>Total comprehensive income</td><td>1,510</td><td>2,400</td></tr></table>



## Ajay SQM Chile

Summary Statements of Cash Flows

<table><tr><td rowspan="2">Statements of Cash Flows</td><td colspan="2">For the period from January to December of the year</td></tr><tr><td>2019</td><td>2018</td></tr><tr><td></td><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>Net cash generated from (used in) operating activities</td><td>(706)</td><td>4,084</td></tr><tr><td>Net cash generated from (used in) investing activities</td><td>(50)</td><td>(244)</td></tr><tr><td>Net cash generated from (used in) financing activities</td><td>(1,800)</td><td>(1,566)</td></tr><tr><td>Net increase (decrease) in cash and cash equivalents before the effect of changes in the exchange rate</td><td>(2,556)</td><td>2,274</td></tr><tr><td>Effects of exchange rate fluctuations on cash held</td><td>-</td><td>-</td></tr><tr><td>Net decrease in cash and cash equivalents</td><td>(2,556)</td><td>2,274</td></tr><tr><td>Cash and cash equivalents at beginning of period</td><td>2,633</td><td>359</td></tr><tr><td>Cash and cash equivalents at end of period</td><td>77</td><td>2,633</td></tr></table>



## Ajay SQM Chile S.A.

Summary Consolidated Statements of Changes in Equity

<table><tr><td rowspan="2">Statements of Changes in Equity</td><td>Share capital</td><td>Retained earnings</td><td>Total equity</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS$</td></tr><tr><td>Equity as of January 1, 2019</td><td>5,314</td><td>12,358</td><td>17,672</td></tr><tr><td>Net profit</td><td>-</td><td>1,510</td><td>1,510</td></tr><tr><td>Comprehensive income</td><td>-</td><td>1,510</td><td>1,510</td></tr><tr><td>Dividends</td><td></td><td>(1,800)</td><td>(1,800)</td></tr><tr><td>Increase (decrease) in equity</td><td>-</td><td>(290)</td><td>(290)</td></tr><tr><td>Equity as of December 31, 2019</td><td>5,314</td><td>12,068</td><td>17,382</td></tr></table>

<table><tr><td rowspan="2">Statements of Changes in Equity</td><td>Share capital</td><td>Retained earnings</td><td>Total equity</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td><td>ThUS$</td></tr><tr><td>Equity as of January 1, 2018</td><td>5,314</td><td>11,638</td><td>16,952</td></tr><tr><td>Net profit</td><td>-</td><td>2,400</td><td>2,400</td></tr><tr><td>Comprehensive income</td><td>-</td><td>2,400</td><td>2,400</td></tr><tr><td>Dividends</td><td></td><td>(1,680)</td><td>(1,680)</td></tr><tr><td>Increase (decrease) in equity</td><td>-</td><td>720</td><td>720</td></tr><tr><td>Equity as of December 31, 2018</td><td>5,314</td><td>12,358</td><td>17,672</td></tr></table>



## Related party disclosures

## Detailed identification of the link between Ajay-SQM Chile S.A. and subsidiary

As of December 31, 2019 and December 31, 2018, the detail of entities that are related parties is as follows:

<table><tr><td>Tax ID No.</td><td>Company</td><td>Nature</td><td>Country of origin</td><td>Transaction</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>US\(</td></tr><tr><td>79.768.170-9</td><td>Soquimich Comercial S.A.</td><td>Other related parties</td><td>Chile</td><td>US\)</td></tr><tr><td>Foreign</td><td>SQM (Shanghai) Chemicals Co. Ltd.</td><td>Other related parties</td><td>China</td><td>US\(</td></tr><tr><td>Foreign</td><td>Ajay North America</td><td>Other related parties</td><td>United States</td><td>US\)</td></tr><tr><td>Foreign</td><td>Ajay Europe SARL</td><td>Other related parties</td><td>France</td><td>Euro</td></tr><tr><td colspan="5">Total</td></tr></table>

## Trade receivables due from related parties, current:

<table><tr><td rowspan="2">Tax ID No.</td><td rowspan="2">Company</td><td rowspan="2">Nature</td><td rowspan="2">Country of origin</td><td rowspan="2">Transaction</td><td>For the year ended December 31, 2019</td><td>For the year ended December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>93.007.000-9</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>Ch\)</td><td>2,237</td><td>5,691</td></tr><tr><td>79.768.170-9</td><td>Soquimich Comercial S.A.</td><td>Other related parties</td><td>Chile</td><td>US\(</td><td>17</td><td>-</td></tr><tr><td>Foreign</td><td>Ajay Europe SARL</td><td>Other related parties</td><td>France</td><td>Euro</td><td>258</td><td>221</td></tr><tr><td colspan="5">Total</td><td>2,512</td><td>5,912</td></tr></table>

## Trade payables due to related parties, current:

<table><tr><td rowspan="2">Tax ID No.</td><td rowspan="2">Company</td><td rowspan="2">Nature</td><td rowspan="2">Country of origin</td><td rowspan="2">Transaction</td><td>For the year ended December 31, 2019</td><td>For the year ended December 31, 2018</td></tr><tr><td>ThUS\(</td><td>ThUS\)</td></tr><tr><td>93.007.000</td><td>SQM S.A.</td><td>Parent</td><td>Chile</td><td>Peso</td><td>591</td><td>-</td></tr><tr><td>Foreign</td><td>SQM (Shanghai) Chemicals Co. Ltd.</td><td>Other related parties</td><td>China</td><td>US\(</td><td>52</td><td>-</td></tr><tr><td>Foreign</td><td>Ajay North America</td><td>Other related parties</td><td>United States of America</td><td>US\)</td><td>53</td><td>659</td></tr><tr><td>Foreign</td><td>Ajay Europe SARL</td><td>Other related parties</td><td>France</td><td>Euro</td><td>35</td><td>-</td></tr><tr><td colspan="5">Total</td><td>731</td><td>659</td></tr></table>



## 11) RESPONSIBILITY STATEMENT

The Directors and Chief Executive Officer of SQM S.A. declare that we have exercised our respective functions as administrators and chief executive of the Company in conformity with the practices that are customarily used for such purposes in Chile and, in accordance with these practices, we swear under oath that the information in this 2019 Annual Report is true and that we accept any liability that may arise from this statement.





Vice Chairman
Patricio Contesse F.
Chilean Taxpayer ID: 15.315.085-0



Chilean Taxpayer ID: 7.269.147-4

Director
Hernán Büchi B.
Chilean Taxpayer ID: 5.718.666-6





Laurence Golbome R.
Chilean Taxpayer ID: 8.170.562-3

Gonzalo Guerrero Y.
Chilean Taxpayer ID: 10.581.580-8



Francisco Ugarte L.
Chilean Taxpayer ID: 10.325.736-0



Robert J. Zatta
Chilean Taxpayer ID: 48.211.511-K