Friday, August 14, 2009

A Long Look at Lithium: Chile's SQM Poised for Growth

Editor's Note: Government Alternative Energy Subsidies = Electric Car Stimulus Funds = Major Battery Technology Gains = Increased Lithium Usage

Sociedad Quimica y Minera (SQM), headquartered in Chile, looks poised for solid returns as global markets demand more lithium-ion battery energy and agricultural resources. SQM is a leading producer of key resources such as potassium nitrate, iodine and lithium carbonate. It also produces specialty plant nutrition products, iodine and lithium derivatives, and certain industrial chemicals, including industrial nitrates. SQM is well positioned as the world population adds 700 million new middle class people (examples, China 350 million and India 100 million respectively) by 2022.

Its primary competitor, Rockwood Holdings' Chemestall Division (ROC), has 28% global Lithium market share. However, Rockwood -- exposed widely among several sectors -- reported a 21% decrease in net sales for Q2 2009 with debt issues and poor earnings per share results. SQM is financially better positioned long-term, given low debt and Lithium plays with contributing plant nutrition (agriculture) and iodine (medical) revenues, despite its just announced 11% earnings decrease for Q2 2009.

Balance of article: Seeking Alpha

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