White petroleum of the carbon neutrality era: ALB, SQM, and LTHM—now is the time to reassess lithium mining valuations.

According to information disclosed at the 2020 investor briefing, the company forecasts that battery-grade lithium demand will rise from 113,000 tonnes LCE in 2020 to 787,000 tonnes LCE in 2025, representing a CAGR of 47%; battery capacity per vehicle is expected to grow by 28% to 55 kWh/vehicle by 2025. Through its Wave 2, Wave 3, and Wave 4 initiatives, the company plans to expand its lithium production capacity to 450,000–500,000 tonnes annually. These initiatives include major projects such as establishing lithium conversion facilities in China and Australia. Under Wave 2, significant increases in lithium carbonate and lithium hydroxide sales are expected starting in 2022: the La Negra III/IV brine-based lithium facility in Chile is scheduled for completion mid-2021, adding 40,000 tonnes of annual lithium carbonate output; the Kemerton I/II spodumene-based lithium facility in Australia, slated for completion by end-2021, will contribute 50,000 tonnes of annual lithium hydroxide capacity. By tallying Albemarle’s (ALB) future capacity ramp-ups, both 2022 and 2023 are expected to witness rapid capacity deployment, accelerating revenue growth and earnings realization. We remain optimistic about Albemarle’s resource moat and its orderly capacity rollout. As the world’s leading lithium resource stock, Albemarle maintains a steady pace of capacity expansion—perfectly aligning with the explosive growth of new-energy vehicles—and backed by its robust sales capabilities, the company’s prospects look promising. Sociedad Química y Minera de Chile S.A. (SQM) SQM is a global leader in the integrated production and sale of fertilizers, lithium, iodine, and industrial chemicals. SQM produces specialty plant nutrients and chemicals. Its operations span several business segments: Specialty Plant Nutrition (SPN), engaged in producing organic fertilizers and nutrient solutions; Lithium and Derivatives, focused on lithium ore mining and lithium salt production; Iodine and Derivatives, involved in iodine and iodine derivative extraction and production; Industrial Chemicals, including production of sodium nitrate, potassium nitrate, and boric acid; Potassium, covering potassium chloride and potassium sulfate production; and Other Products and Services, comprising ancillary support activities. This article focuses specifically on SQM’s lithium and derivatives business. SQM sources its products primarily from the Caliche nitrate deposit and the Salar de Atacama brine deposit in northern Chile. The Caliche deposit hosts the world’s largest reserves of iodine and nitrates, while the Salar de Atacama brine deposit features high concentrations of lithium and potassium. SQM extracts raw materials from the Caliche nitrate deposit in northern Chile to produce specialty plant fertilizers and nitrate products for various industrial applications, as well as iodine and iodine derivatives. From the Salar de Atacama brine deposit, it extracts potassium-, lithium-, and sulfate-rich brines to produce potassium chloride, potassium sulfate, lithium solution, and carnallite (magnesium chloride). Lithium carbonate and lithium hydroxide are produced at its facility near Antofagasta, Chile. SQM sells its products globally via an extensive distribution network spanning over 100 countries, with the majority of its revenue generated outside Chile.

Lithium prices have risen—so why does Tianqi Lithium still need to watch SQM?

Summary: Tianqi Lithium’s profits stem not only from its own lithium products. As a key associate company, SQM’s equity-method investment income flows directly into Tianqi’s income statement; when analyzing lithium prices, these two revenue streams must be verified separately. When lithium prices rise, many investors instinctively first examine Tianqi Lithium’s owned lithium mines and lithium product selling prices. Yet another indispensable line item appears on Tianqi Lithium’s income statement: equity-method investment income from SQM. This does not mean SQM is more important than Tianqi’s core operations—but rather, to accurately determine the source of profit improvement, one cannot simply equate “rising lithium prices” with “improved performance of Tianqi’s core business.” Why does SQM impact Tianqi Lithium’s income statement? SQM is a Chilean chemical and mining company whose business spans lithium, potassium, and other products. According to Tianqi Lithium’s 2025 annual report, as of the reporting date, Tianqi Chile holds a 21.90% equity stake in SQM, while Tianqi Lithium Hong Kong holds an additional 0.20%. Such investments in associate companies are generally accounted for using the equity method. In simple terms, SQM’s operating results affect Tianqi Lithium’s “investment income” proportionally to its ownership stake—not through consolidation into Tianqi Lithium’s operating revenue. Therefore, when reading Tianqi Lithium’s income statement, at least two distinct items must be analyzed separately: ・ Volume, realized selling price, cost, and gross margin of self-operated lithium products; ・ Investment income recognized from associate and joint venture enterprises (e.g., SQM). Although both lines relate to the lithium industry, they enter the income statement at different locations and require different verification methods. In Q1 2026, SQM contributed to profit improvement—but was not the sole driver Tianqi Lithium’s Q1 2026 earnings report shows a net profit attributable to shareholders of RMB 1.876 billion and a non-recurring net profit of RMB 1.816 billion; investment income totaled RMB 475 million, of which RMB 428 million came from investments in associates and joint ventures. The company disclosed in its quarterly report that year-on-year increases in average selling prices of its primary lithium products drove higher revenue and gross profit; concurrently, SQM’s Q1 2026 earnings were expected to grow year-on-year, resulting in higher equity-method investment income recognized by Tianqi Lithium. This disclosure should not be misread as “profits entirely depend on SQM,” nor as “SQM can be ignored.” Rather, the correct interpretation is: current-period profit improvement stems from at least two sources—changes in volume, pricing, and gross margin of self-operated products, and changes in investment income from associate enterprises.

JPMorgan Downgrades Sociedad Quimica y Minera de Chile S.A. to Neutral From Overweight, Adjusts PT to $100 From $94

Jun 2, 2026

JPMorgan downgraded Sociedad Quimica y Minera de Chile S.A. (SQM) to Neutral with a $100 price target. The adjustment reflects a changed outlook for the lithium and specialty chemicals producer supplying agriculture and EV battery markets.

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