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Chilean miner SQM, the world's No. 2
lithium producer, reported a nearly five-fold rise in profits in the fourth
quarter on Wednesday, driven by the surging price of the ultra-light metal that
is key to make electric vehicle batteries.
The metal, extracted from brine lakes in
Chile's salt flats, is going through a price boom since the start of last year
amid a global push toward electric modes of transportation, driving huge demand
from carmakers and battery firms to shore up supply.
SQM reported a net profit of $321.6-million
in the fourth quarter, compared with a net profit of $67.0-million in the
year-ago quarter and beating the average Refinitiv estimate of $266.44 million.
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The company, which has seen its share price
climb strongly this year, just topped its target to sell around 100 000 t of
lithium in 2021.
SQM CEO Ricardo Ramos had said in November
that the goal was to hit production capacity of 180 000 t of lithium in 2022
and reiterated that forecast on Wednesday, saying expansions to hit the goal
would be "completed in the coming months."
Chile's lithium sector has for years been
dominated by SQM and rival Albemarle, though the door has been edged open for
rivals after Chinese carmaker BYD and local firm Servicios y Operaciones
Mineras del Norte this year won an auction for new lithium contracts.
Incoming Chilean President Gabriel Boric
has also said he wants to create a state-owned lithium firm, which could add an
additional player to the sector. The Chilean state already owns Codelco, the
world's largest copper producer.
Optimism in the global lithium industry has
risen significantly, helped by an accelerating global push towards electric
vehicles.