XML 161 R15.htm IDEA: XBRL DOCUMENT

Joint Ventures

12 Months Ended

Dec. 31, 2019

Disclosure Of Joint Ventures Explanatory [Abstract]

Disclosure of joint ventures [text block]

Note 9 Joint Ventures

9.1

Policy for the accounting of equity accounted investment in joint ventures

The method for recognizing joint ventures is that in which participation is initially recorded at cost, and subsequently adjusted, considering changes after the acquisition in the portion of the entity’s net assets that correspond to the investor. Profit or loss for the period will include the portion of the entity’s entire profit or loss that correspond to the investor. For these joint ventures, there is no quoted market price to measure these investments. (See Note 2.6)

At the date of issuance of these financial statements, SQM is not aware of the existence of any significant contingent liabilities associated with the partnerships in joint ventures.

9.2

Disclosures of interest in joint ventures

Operations conducted in 2019



On January 1, 2019, SQM Vitas Perú changed its functional currency from the Peruvian Sol to USD (United States dollar).



During the fourth quarter del 2019, SQM Vitas Fzco paid dividends of ThUS$ 21,196.

Operations conducted in 2018



During the first quarter of 2018, Minera Exar S.A. increased its capital by ThUS$ 13,000. The entity was a joint venture and contributions were made on January 25, 2018 (ThUS$ 6,000) and on February 14, 2018 (ThUS$ 7,000) by SQM Potasio S.A. and Lithium Americas Corporation (LAC). Both partners share 50% ownership of the respective company.



On March 14, 2018, the company SQM Vitas Plantacote B.V. was closed.



As of the date, Minera Exar S.A. has changed its functional currency from the Argentine peso to the United States dollar.



In April 2018, Minera Exar made a new capital increase of ThUS$ 7,000, which was contributed in equal parts by its partners.



On May 15, 2018, the subsidiary Soquimich European Holdings BV, signed a joint venture agreement with PAVONI & C., SpA in Italy, EUR 5.5 million were paid for a 50% share, generating a lower value of EUR 2.6 million. The functional currency of the joint venture is the Euro.



On December 31, 2018, the conditions were met for Covalent Lithium Pty Ltd, to be recognized as a separate joint venture. In previous years, the financial statements for this entity were included as part of SQM Australia Pty.



On December 31, 2018, as part of the investment in Pavoni & C., SpA. the goodwill generated in the purchase of this joint venture by an amount of ThUS$ 3,206.



The subsidiary SQM Industrial S.A. recorded an impairment loss of ThUS$ 8,802, corresponding to its Sichuan SQM-Migao Chemical Fertilizer Co, Ltd, joint venture. The impairment is disclosed by netting the value of the aforementioned investment, in the caption “Equity method investments



During

December 2018, the Company

sold its shares in Minera Exar S.A. and generated a profit before taxes of ThUS$ 14,507.

Operations conducted in 2017

On December 1, 2017, SQM Potasio S.A. recognized the goodwill value generated by the acquisition of 50% of the joint venture Minera Exar S.A. in the amount of ThUS$6,205.

On October 6, 2017, a capital contribution of ThUS$13,300 was made in the mining entity EXAR S.A., which was 50% owned by the subsidiary SQM Potasio S.A. The functional currency of EXAR S.A. was the Argentine peso (ARS). This contribution had no impact on the Company's consolidated results.

9.3

Investment in joint ventures accounted for under the equity method of accounting

									Dividends received
									For the year		For the year		For the year
	Description of the nature				Country of		Share of interest		ended December		ended December		ended December
Joint venture	of the relationship		Domicile		incorporation		in ownership		31, 2019		31, 2018		31, 2017
									ThUS$		ThUS$		ThUS$
Sichuan SQM Migao Chemical Fertilizers Co Ltd.		Production and distribution of soluble fertilizers.		Huangjing Road, Dawan Town, Qingbaijiang District, Chengdu Municipality, Sichuan Province		China		50%		-		-		-
Coromandel SQM India		Production and distribution of potassium nitrate.		1-2-10, Sardar Patel Road, Secunderabad – 500003 Andhra Pradesh		India		50%		-		-		-
SQM Vitas Fzco.		Production and commercialization of specialty plant and animal nutrition and industrial hygiene.		Jebel ALI Free Zone P.O. Box 18222, Dubai		United Arab Emirates		50%		10,598		-		-
SQM Qingdao Star Corp Nutrition Co. Ltd.		Production and distribution of nutrient plant solutions with specialties NPK soluble.		Longquan Town, Jimo City, Qingdao Municipality, Shangdong Province		China		50%		-		-		-
SQM Vitas Holland		Without information production of specialized fertilizers and other products for distribution in Italy and other countries.		Herikerbergweg 238, 1101 CM Amsterdam Zuidoost		Holland		50%		-		-		-
Pavoni & C. Spa		products for distribution in Italy and other countries.		Corso Italia 172, 95129 Catania (CT), Sicilia		Italy		50%		-		-		-
Covalent Lithium Pty Ltd.		Development and operation of the Mt Holland Lithium project, which will include the construction of a lithium extraction and refining mine		L18, 109 St Georges Tce Perth WA 6000 \|PO Box Z5200 St Georges Tce Perth WA 6831		Australia		50%		-		-		-
Total										10,598		-		-

The companies described in the following table are related to the following joint ventures:

(1)

SQM Vitas Fzco.

(2)

Pavoni & C Spa

Dividends received

Joint venture

Description of the nature of the relationship

Domicile

Country of incorporation

Share of interest in ownership (*)

For the year

‎

ended December

‎

31, 2019

For the year

‎

ended December

‎

31, 2018

For the year ended

‎

December 31, 2017

ThUS$

SQM Vitas Brasil Agroindustria (1)

Production and trading of specialty vegetable and animal nutrition and industrial hygiene.

Via Cndeias, Km. 01 Sem Numero, Lote 4, Bairro Cia Norte, Candeias, Bahia.

Brazil

49.99%

SQM Vitas Perú S.A.C. (1)

Production and trading of specialty vegetable and animal nutrition and industrial hygiene

Av. Juan de Arona 187, Torre B, Oficina 301-II, San Isidro, Lima

Perú

50%

Arpa Speciali S.R.L. (2)

Production of specialty fertilizers and others for distribution in Italy and other countries.

Mantova (MN) Via Cremona 27 Int. 25

Italy

50.48%

Total

(*) The percentages presented correspond to the ownership used in the consolidation of the company.

	Equity-accounted investees						Share in profit (loss) of associates and joint ventures ‎ accounted for using the equity method
Joint Venture	As of December ‎ 31, 2019		As of December ‎ 31, 2018		As of December ‎ 31, 2017		For the year ‎ ended December ‎ 31, 2019			For the year ‎ ended December ‎ 31, 2018			For the year ‎ ended December ‎ 31, 2017
	ThUS$		ThUS$		ThUS$		ThUS$			ThUS$			ThUS$
Sichuan SQM Migao Chemical Fertilizers Co Ltd.		1,992		1,992		11,444		(632	)		(650	)		(535	)
Coromandel SQM India		1,568		1,729		1,633		(98	)		174			165
SQM Vitas Fzco.		9,111		20,202		19,478		1,797			1,781			1,502
SQM Qingdao Star Corp Nutrition Co. Ltd.		3,464		3,168		2,980		296			188			361
SQM Vitas Holland		1,304		1,345		1,429		(15	)		(14	)		(18	)
Minera Exar S.A. (1)		-		-		33,065		-			(206	)		(27	)
Pavoni & C. Spa		6,864		7,084		-		36			(39	)		-
Covalent Lithium Pty Ltd.		40		53		-		-			36			-
Total		24,343		35,573		70,029		1,384			1,270			1,448

	Share on other comprehensive income of associates ‎ and joint ventures accounted for using the equity ‎ method, net of tax									Share on total other comprehensive income of ‎ associates and joint ventures accounted for using ‎ the equity method
Joint Venture	For the year ‎ ended December ‎ 31, 2019			For the year ‎ ended December ‎ 31, 2018			For the year ‎ ended December ‎ 31, 2017			For the year ‎ ended December ‎ 31, 2019			For the year ‎ ended December ‎ 31, 2018			For the year ‎ ended December ‎ 31, 2017
	ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$
Sichuan SQM Migao Chemical Fertilizers Co Ltd.		-			-			-			(631	)		(650	)		(535	)
Coromandel SQM India		(38	)		(159	)		-			(136	)		15			165
SQM Vitas Fzco.		437			(903	)		(5	)		2,234			878			1,497
SQM Qingdao Star Corp Nutrition Co. Ltd.		-			-			-			296			188			361
SQM Vitas Holland		(27	)		(70	)		-			(42	)		(84	)		(18	)
Minera Exar S.A. (1)		-			-			-			-			(206	)		(27	)
Pavoni & C. Spa		(255	)		70			-			(219	)		31			-
Covalent Lithium Pty Ltd.		(13	)		-			-			(13	)		36			-
Total		104			(1,062	)		(5	)		1,489			208			1,443

(1)

Minera Exar S.A. was sold in December 2018,

The amounts described in the following box represent numbers used in the consolidation of the company:

	Equity-accounted investees						Share in profit (loss) of associates and joint ventures ‎ accounted for using the equity method
Joint Venture	As of December ‎ 31, 2019		As of December ‎ 31, 2018		As of December ‎ 31, 2017		For the year ‎ ended December ‎ 31, 2019		For the year ‎ ended December ‎ 31, 2018			For the year ‎ ended December ‎ 31, 2017
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			ThUS$
SQM Vitas Brasil Agroindustria (1)		5,347		5,915		11,003		564		1,439			1,753
SQM Vitas Perú S.A.C. (1)		1,955		2,671		5,961		211		(275	)		(216	)
SQM Vitas Plantacote B.V. (2)		-		-		669		-		-			(1	)
Arpa Speciali S.R.L. (2)		92		62		-		31		(44	)		-
Total		7,394		8,648		17,633		806		1,120			1,536

	Share on other comprehensive income of associates ‎ and joint ventures accounted for using the equity ‎ method, net of tax									Share on total other comprehensive income of ‎ associates and joint ventures accounted for using ‎ the equity method
Joint Venture	For the year ‎ ended December ‎ 31, 2019			For the year ‎ ended December ‎ 31, 2018			For the year ‎ ended December ‎ 31, 2017			For the year ‎ ended December ‎ 31, 2019		For the year ‎ ended December ‎ 31, 2018			For the year ‎ ended December ‎ 31, 2017
	ThUS$			ThUS$			ThUS$			ThUS$		ThUS$			ThUS$
SQM Vitas Brasil Agroindustria (1)		(225	)		(792	)		(51	)		338		647			826
SQM Vitas Perú S.A.C. (1)		661			(112	)		-			872		(387	)		(108	)
SQM Vitas Plantacote B.V. (2)		-			-			-			-		-			(1	)
Arpa Speciali S.R.L. (2)		(1	)		-			-			30		(44	)		-
Total		435			(904	)		(51	)		1.240		216			717

The following companies are subsidiaries of:

(1)

SQM Vitas Fzco.

(2)

Pavoni & C. Spa

9.4 Assets, liabilities, revenue and expenses from joint ventures:

	As of and for the year ended December 31, 2019
											Gain (loss) from			Other
	Assets				Liabilities						continuing			comprehensive			Comprehensive
Joint Venture	Current		Non-current		Current		Non-current		Revenue		operations			income			income
	ThUS $		ThUS $		ThUS $		ThUS $		ThUS $		ThUS $			ThUS $			ThUS $
Sichuan SQM Migao Chemical Fertilizers Co Ltd.		28,668		5,129		13,472		-		7		(1,262	)		-			(1,262	)
Coromandel SQM India		4,504		633		1,704		-		8,197		(197	)		(77	)		(274	)
SQM Vitas Fzco.		9,695		20,014		1,136		-		36		3,595			(876	)		2,719
SQM Qingdao Star Corp Nutrition Co. Ltd.		7,534		26		632		-		12,003		592			-			592
SQM Vitas Holland		2,609		-		2		-		-		(30	)		(53	)		(83	)
SQM Vitas Brasil Agroindustria		46,118		7,299		40,334		-		87,901		1,128			(451	)		677
SQM Vitas Perú S.A.C.		29,452		8,378		24,855		6,044		28,590		421			1,322			1,743
Pavoni & C. Spa		9,444		7,074		8,466		735		14,296		71			(510	)		(439	)
Covalent Lithium Pty Ltd.		1,616		958		2,111		383		-		-			(25	)		(25	)
Total		139,640		49,511		92,712		7,162		151,030		4,318			(670	)		3,648

	As of and for the year ended December 31, 2018
											Gain (loss) from			Other
	Assets				Liabilities						continuing			comprehensive			Comprehensive
Joint Venture	Current		Non-current		Current		Non-current		Revenue		operations			income			income
	ThUS $		ThUS $		ThUS $		ThUS $		ThUS $		ThUS $			ThUS $			ThUS $
Sichuan SQM Migao Chemical Fertilizers Co Ltd.		28,577		5,913		12,902		-		16		(1,301	)		-			(1,301	)
Coromandel SQM India		5,905		852		3,050		-		11,605		348			(318	)		30
SQM Vitas Fzco.		30,430		17,592		2,678		-		16,583		3,561			(1,806	)		1,755
SQM Qingdao Star Corp Nutrition Co. Ltd.		7,754		114		1,533		-		13,004		377			-			377
SQM Vitas Holland		2,692		-		1		-		-		(28	)		(139	)		(167	)
SQM Vitas Brasil Agroindustria		36,648		7,566		31,808		-		82,625		2,879			(1,585	)		1,294
SQM Vitas Perú S.A.C.		22,365		7,785		18,996		5,966		28,619		(550	)		(223	)		(773	)
Pavoni & C. Spa		10,062		6,490		8,098		698		15,461		(79	)		140			61
Covalent Lithium Pty Ltd.		239		100		233		-		-		106			-			106
Total		144,672		46,412		79,299		6,664		167,913		5,313			(3,931	)		1,382

9.5

Other Joint Venture disclosures:

	Cash and cash equivalents				Other current financial liabilities				Other non-current financial liabilities
Joint Venture	As of December 31, 2019		As of December 31, 2018		As of December 31, 2019		As of December 31, 2018		As of December 31, 2019		As of December 31, 2018
	ThUS $		ThUS $		ThUS $		ThUS $		ThUS $		ThUS $
Sichuan SQM Migao Chemical Fertilizers Co Ltd.		33		106		-		-		-		-
Coromandel SQM India		2,240		308		-		-		-		-
SQM Vitas Fzco.		3,071		19,312		-		-		-		-
SQM Qingdao Star Corp Nutrition Co. Ltd.		4,640		4,543		-		-		-		-
SQM Vitas Holland		2,609		2,692		-		-		-		-
SQM Vitas Brasil Agroindustria		2,101		1,869		9,106		13,380		-		-
SQM Vitas Perú S.A.C.		225		371		258		3,819		895		801
Pavoni & C. Spa		314		407		5,509		5,464		-		-
Covalent Lithium Pty Ltd.		693		156		472		-		-		-
Total		15,926		29,764		15,345		22,663		895		801

	Depreciation and amortization expense									Interest expense									Income tax benefit (expense) from ‎ continuing operations
Joint Venture	For the year ‎ ended ‎ December ‎ 31, 2019			For the year ‎ ended ‎ December ‎ 31, 2018			For the year ‎ ended ‎ December ‎ 31, 2017			For the year ‎ ended ‎ December ‎ 31, 2019			For the year ‎ ended ‎ December ‎ 31, 2018			For the year ‎ ended ‎ December ‎ 31, 2017			For the year ‎ ended ‎ December ‎ 31, 2019			For the year ‎ ended ‎ December ‎ 31, 2018			For the year ‎ ended ‎ December ‎ 31, 2017
	ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$
Sichuan SQM Migao Chemical Fertilizers Co Ltd.		(743	)		(948	)		(691	)		-			(1	)		(433	)		153			97			200
Coromandel SQM India		(291	)		445			-			(4	)		(9	)		(49	)		(27	)		(38	)		(44	)
SQM Vitas Fzco.		-			(509	)		(717	)		(7	)		(8	)		(16	)		-			-			-
SQM Qingdao Star Corp Nutrition Co. Ltd.		(62	)		(67	)		(64	)		-			-			(1	)		(241	)		(187	)		(195	)
SQM Vitas Holland		-			-			-			(1	)		-			-			-			-			(337	)
SQM Vitas Plantacote B.V.		-			-			-			-			-			(1	)		-			-			-
SQM Vitas Brasil Agroindustria		(33	)		(408	)		(438	)		(1,176	)		(886	)		(2,127	)		181			(117	)		-
SQM Vitas Perú S.A.C.		(287	)		(347	)		(82	)		(435	)		(425	)		(323	)		(316	)		(230	)		(362	)
Pavoni & C. Spa		(149	)		(542	)		-			-			(335	)		-			(214	)		-			-
Covalent Lithium Pty Ltd.		(126	)		(16	)		-			(32	)		(5	)		-			-			(46	)		-
Total		(1,691	)		(2,392	)		(1,992	)		(1,655	)		(1,669	)		(2,950	)		(464	)		(521	)		(738	)

9.6

Joint Ventures

In 2017, we continued to expand our operations outside Chile and, together with our subsidiary SQM Australia Pty, we entered into an agreement to acquire 50% of the assets of the Mount Holland lithium project in Western Australia. We entered into a 50/50 unincorporated joint operation with Kidman Resources Limited (“Kidman”), the Mt Holland Lithium Project, to design, construct and operate a mine, concentrator and refinery to produce approximately 45,000 metric tons of lithium hydroxide per year. Kidman retained the exclusive right to exploit gold within the project area. SQM Australia Pty committed to pay a price of US$ 70 million for the 50% of the Mt Holland assets, which was split into an initial payment of US$15 million and a deferred payment of US$ 55 million, both payments subject to certain conditions precedent.

As agreed by the parties, US$ 40 million of a total of US$70 million paid to Kidman was provided directly to the project and

SQM Australia paid an additional (i) US$ 10 million as part of the initial payment, and (ii) US$ 30 million once the deferred payment took place. An additional US$ 5 million for Kidman for resolution of legal disputes.

All payments subject to conditions under the purchase agreement with Kidman were executed by December 2018

This business met the conditions stipulated in IFRS 11 to be considered a "joint operation", since management has agreed that the rights of the related assets and liabilities relate to a joint arrangement, which states that the joint operators share all interests in the related assets and liabilities in specific proportions.