Picture: ISTOCK
Picture: ISTOCK

 Santiago — Chilean miner SQM  says delays in a project to boost output of lithium from salt flat Salar de Atacama slashed sales volumes of the ultralight battery metal by 27% in the third quarter.

SQM, the world’s second-largest producer of lithium, said the previously announced delays were partly offset by high prices and 25% growth in demand in 2018 on sales to producers of electric vehicles.

“These two factors have contributed to market prices remaining high during the third quarter,” CEO Patricio de Solminihac said after the company reported that third-quarter profit fell.

“It is expected that prices will remain at these levels for the remainder of the year.”

Prices so far in 2018  have averaged $16,500 per ton, up from $13,500 in 2017, according to the company’s earnings statement.

SQM said in October it was facing delays in upgrading its lithium carbonate plant, which processes lithium from Salar de Atacama. The project, first announced in 2017, was designed to upgrade lithium production capacity to 70,000 tons.

“We are working diligently to resolve these issues as soon as possible,” Solminihac said. “The ramp-up delay will likely impact our fourth-quarter lithium and derivative sales volumes, delaying part of these volumes to the first quarter of 2019.”

Revenues for lithium and derivatives during the third quarter dropped 8.9% from the third quarter of 2017 amid the production delays, the company said.

Total lithium sales volumes in 2018  should be about 45,000 tons, Solminihac said. The company earlier in 2018 targeted sales volumes in the lithium business line of 55,000 tons in 2018.

SQM reported earnings of $83.5m in the quarter, down 26% from $112.9m in 2017.

China’s Tianqi Lithium has cleared regulatory hurdles in Chile to purchase nearly one-quarter of SQM for $4.1bn from Canada-based fertiliser company Nutrien.

SQM has said it will overtake competitor Albemarle as the world’s top producer of lithium by 2022.

Both SQM and Albemarle are preparing to ramp up production in Salar de Atacama, one of the world’s richest source of lithium, amid the sharp spike in global demand.