Why Lithium Producer Sociedad Quimica Shares Are Rising Today

Sociedad Quimica Y Minera S.A. (NYSE: SQM) shares are trading higher on Thursday.

Yesterday, the company inked a memorandum of understanding with the National Copper Corporation of Chile (Codelco) to develop lithium in the Salar de Atacama from 2025 to 2060.

The execution of definitive agreements is expected to happen during the first quarter of 2024.

The agreement stipulated Codelco would be entitled to receive a profit allocation from the Operating Company (NewCo) for the commercialization of 201,000 metric tons of LCE from 2025 through 2030. 

As per the memorandum of understanding, the newly suggested entity would manufacture lithium carbonate and hydroxide on properties leased by Sociedad Quimica Y Minera from the Chilean economic development agency, CORFO.

This allocation is equivalent to 33,500 metric tons of LCE per annum when distributed over six years. 

Throughout the second term of the partnership, each party would receive economic benefits in proportion to its respective shareholding.

“We believe that the successful development of the Salar Futuro project will make the Salar de Atacama operations the most sustainable lithium operation in the world,” Ricardo Ramos, chief executive of SQM, said.

SQM´s total contribution to the Chilean treasury reached close to US$2.4 billion for the first nine months of 2023, including payments related to the public-private alliance with CORFO.

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Price Action: SQM shares are trading higher by 3.07% to $62.76 at last check Thursday. 

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