Storm clouds continue to gather over SQM as its
lease to extract lithium from
Salar de Atacama (pictured) faces further threats.
(Terry Feuerborn, via Flickr)
In separate statements released in the second week of March,
the lithium, potash and iodine producer referred to reports
published by various Chilean media outlets containing
allegations that SQM had used its influence to persuade
politicians to amend royalty legislation to its advantage and
that it had failed to register all of its exports with the
On the royalties issue, SQM said the Chilean Law to
Establish a Specific Tax on Mining Activity, enacted by the
country’s government in 2005 and modified in 2010,
contained "no special regiment, benefits, or economic
advantages for SQM and its subsidiaries".
"In 2010, SQM expressed its view that the modification of
the law should consider equitable and non-discriminatory
treatment for both Chilean and foreign companies, just as the
original law had established in 2005," SQM said in a statement
released on 10 March.
"This view was considered logical and therefore was accepted
by all of the parties who participated in the final drafting
and approval of the law (…) Both the original law and
the modified version were subjected to thorough public scrutiny
and were ultimately approved by a majority of both houses of
congress," it added.
The company asserted that between 2010 and 2012 –
the first three years during which the modification to the
mining royalty law was in force – SQM paid royalty
taxes of approximately $75m, compared with $29m over the
preceding three-year period.
SQM further pointed out that at no point since 2010 has it
been alleged that the law was either discriminatory or
advantageous to any of the companies it covers and that it is
continuing to support an investigation by Chile’s
public prosecutor into SQM’s tax affairs and its
previous dealings with politicians.
The company’s former CEO, Patricio Contesse,
remains under house arrest in Santiago as his trial concerning
alleged payments made to Chilean political parties.
In a separate document released a day later, SQM insisted
that all of its exports are properly registered, with
information consistently sent to all relevant authorities.
"The CCHEN has been informed of all the uses and types of
customers to whom SQM has sold its finished lithium," the
Local news service CIPER had accused the nuclear
regulator of failing in its supervisory duties, allowing SQM to
bypass various controls since 1995, which should have required
CCHEN authorisation for all lithium sales and exports, taking
into account volume, technical characteristics, final
destination and end use.
The report stated that, in the case of most export
authorisation requests submitted by SQM to CCHEN, it had not
specified clearly either the end use or final destination of
lithium exports, which it alleged included North Korea.
"[SQM] reported something general, that it would be used for
batteries, glass and generally for 'industrial
uses’, a concept that encompasses practically
everything," CIPER quoted a former CCHEN official as
The news service suggested that failure to comply with these
regulations may be grounds for the termination of
SQM’s lease of its principle source of lithium
brine, the Salar de Atacama, from state resource body
Corporacion de Fomento de la Produccion (CORFO), a subject
which is already a source of ongoing conflict between the two
organisations due to a rent payment dispute.
But SQM told IM that the piece "contains
several untruths and assumptions and for which we never
even contacted". It has insisted that it maintains "clear
and complete" records and that its international sales network
allows it to maintain direct contact with its final
"These procedures allow the company to assert that the
lithium exported has not been used in processes oriented at
nuclear fusion, in accordance with CCHEN regulations," it
It further noted that there are no physical-chemical
processes that allow the controlled production of energy
through nuclear fusion and that it is unlikely that this
technology will be developed in the short-to-medium term.
Parcels to Pyongyang
Regarding the allegation that it had sold lithium to North
Korea, the company said this was patently untrue.
"Two exports to the South Korean port of Busan were
erroneously reflected as having been sent to North Korea in the
export records," SQM said, adding that the numerical codes for
the two countries are very similar.
It said that information provided to the authorities made it
clear that South Korea was the effective final destination of
the shipments in question, where it has longstanding business
relationships with a number of battery producers.
"SQM and its subsidiaries do not carry out business
activities of any kind in North Korea," it clarified.