Jacob Kim: Sounds good. Okay. Thank you so much.
Operator: Our next question will come from César Pérez-Novoa with BTG Pactual. You may now go ahead.
César Pérez-Novoa: Thank you. Good afternoon to you all and congratulations for your strong performance. I have a group of questions here. My first one is regarding this incremental 60,000 hydroxide expansion in Chile, which certainly is a bold and confident movement and investment, considering that the contractual terms with CORFO expire in 2030. On this rationale, has there been any progress with pertinent authorities as voiced with the press? And also when considering this new investment, what CapEx should we assume in 2023? And how have your numbers have changed for the next years? On China, could it be possible to say when will this facility start contributing to SQM’s numbers and possibly what — under what economic terms?
And third and finally on lithium pricing. The third quarter 2022 numbers had — are consistently increased pricing on a quarter-on-quarter basis, and it seems that much of the first 45 days of quarter four, there has been a significant uptick in spot prices. Maybe if you could qualitatively — I know that you don’t talk about price levels but maybe qualitatively indicate price direction into 2023. And what sales mix would you attain next year or seeking to attain? Those would be my three questions, gentlemen. Thank you.
Gerardo Illanes : Hi, César. This is Gerardo. We will try to go over each of your questions. Carlos will start with the first one.
Carlos Diaz : Hello, César. I will explain about — a little bit about the hydroxide expansion in Chile. What I said as before, we have been explaining that we believe that the demand is — will be very strong in the coming year regarding to the lithium, especially lithium hydroxide outside of China. The market, obviously, we will need more supply and we’re working on that in Chile, in China and Australia. So we feel very confident that we will do our best effort to reach that capacity. We have shown in the past we have done it. And so regarding to CORFO, I don’t know, Ricardo?
Ricardo Ramos : Thank you, Carlos. It’s important to say that this hydroxide capacity increase is a very good project without even considering moving forward in the 2030 agreement we have with CORFO. It means it’s a very good project itself, considering that we will be ready in 2025. But about — you’re asking about the 2030 CORFO agreement we have today, let me comment that, as you may know, we are in the process, César, we are in the process of informing the different authorities and the stakeholders to explain, I think, what we call the scope of the Salar Futuro project. So far, I’m very pleased to say that everyone agrees on the interest of developing processes and technology that aim at the objective of water balance at the Salar site.
High yields is also a very good objective and maintaining an extremely low carbon footprint. At the end, what we are looking forward is deepening a sustainable productive activity in the Salar de Atacama. And we have a full agreement with everyone we have been in touch so far. We are advancing today, as we speak, at maximum speed in the work of process design and engineering technological definitions and to develop a complete environmental survey of the project. This project, as I explained before, is very complex and requires a high-level of knowledge and experience. We strongly believe that SQM, we are — we have significant experience after 25 years in the Salar de Atacama. We have the human team, experience, the commitment and the resources to successfully face the project.
We hope to complete all the necessary definitions to submit the final project to the environmental assessment, authority in Chile during the second half of 2024. It’s important to consider that in Chile, complete progress is required in all the definitions of a project prior to being submitted to the environmental evaluation. That’s very important in the Chilean framework. I think also it’s important to consider that this project, of course, implies operation commitments that go far beyond the year 2030. So working in agreement with CORFO, is necessary prior to its presentation to the environmental authorities for evaluation. We all agree that the development of the Salar Futuro project must be carried out in a way that is positive for the second region of Chile.
It has to be positive for the communities near the Salar, of course, positive for Chile and for SQM.
Gerardo Illanes: So regarding your question regarding your question about CapEx, we have announced our CapEx for the period 2022-2024. We expect that, that total CapEx will be approximately $3 billion, which is comprised of $1 billion of CapEx related to nitrates and iodine business, including maintenance of those operations, plus $700 million of investments in Australia, plus $1.3 billion of lithium expansions in Chile, and here, I’m including the $360 million that we announced yesterday for expansion of our lithium hydroxide capacity, regarding your China question. Carlos?
Carlos Diaz: Yeah, regarding to China, we expect to start producing in the second quarter next year. We’re still in the ramp-up of the factory. And so we expect in March and April something, but that is something that say, to produce next year.
César Pérez-Novoa: All right. Second quarter 2023? All right. Thank you.
Felipe Smith: Yeah. And this is Felipe. For the last question, regarding the price direction, yes, we have a lot of questions. So well, we already mentioned in our press release that we believe that the price environment will remain high, for the rest of this year and the beginning of 2023. So we stick to that view. The demand remains very strong. This is — we are very convinced because we received the feedback from our customers as well. They are all with very aggressive expansion plans. So demand will play a big factor in the price direction. And we believe that those fundamentals are there.
César Pérez-Novoa: All right, Felipe. So if I can make a final conclusion here is essentially, you’ll be 100% exposed to the market in 2023 on the solid conditions that — on the strong demand that we’re seeing? Is that a correct assessment, because in the third quarter, you were open 80% to the market, if I recall correctly?
Felipe Smith: Yeah, for next year, we will be almost entirely exposed to the market price, so we are very confident on that.
César Pérez-Novoa: Yes. All right. Thank you everyone, and thank you for taking all of my questions.
Operator: Our next question will come from Andrew McCarthy with CrediCorp Capital. You may now go ahead.
