Inventories

12 Months Ended

Dec. 31, 2019

Disclosure Of Inventories Explanatory [Abstract]

Note 11

Inventories

The composition of inventory at each period-end is as follows:

Type of inventory	As of December ‎ 31, 2019		As of December ‎ 31, 2018
	ThUS$		ThUS$
Raw material		7,287		6,764
Supplies for production		26,064		26,840
Products-in-progress		457,563		423,621
Finished product		492,424		456,449
Total		983,338		913,674

As of December 31, 2019 and 2018, the Company held caliche stockpiles, solutions in solar ponds and intermediary salts amounting ThUS$ 393,600 and ThUS$ 347,100, respectively (including products in progress).

As of December 31, 2019, bulk inventories recognized as part of products-in-progress and finished product amounted to US$ 104,295 and US$ 204,686, respectively.

As of December 31, 2019 and 2018, inventory allowances recognized, amounted to ThUS$ 88,174 and ThUS$ 105,282, respectively. For finished and in-process products, recognized allowances include the provision associated with the lower value of stock (considers lower realizable value, uncertain future use, reprocessing costs of off-specification products, etc.), provision for inventory differences and the provision for potential errors in the determination of inventories (e.g., errors in topography, grade, porosity, etc.), (see Note 3.13).

For raw materials, supplies, materials and parts, the lower value provision was associated to the proportion of obsolete, defective or slow-moving materials and potential differences.

The breakdown of inventory allowances is detailed as follows:

Type of inventory	As of December ‎ 31, 2019		As of December ‎ 31, 2018
	ThUS$		ThUS$
Raw material and supplies for production		2,488		1,838
Products-in-progress		71,468		82,673
Finished product		14,218		20,771
Total		88,174		105,282

The Company has not pledged inventory as collateral for the periods indicated above.

As of December 31, 2019 and

December 31, 2018,

movements in provisions are detailed as follows:

Conciliation	As of December 31, ‎ 2019			As of December 31, ‎ 2018			As of December 31, ‎ 2017
	ThUS$			ThUS$			ThUS$
Beginning balance		105,282			96,284			81,295
Increase (decrease) in lower value provision (1)		(6,987	)		7,845			19,515
Increase (decrease) in provision relating to differences of inventory (2)		(123	)		3,176			573
Increase / decrease in provision relating to eventual differences and others (3)		(6,262	)		2,436			(178	)
Provision used		(3,736	)		(4,459	)		(4,921	)
Total changes		(17,108	)		8,998			14,989
Final balance		88,174			105,282			96,284

(1)

There are three types of Lower Value Provisions: (a) Economic Realizable Lower Value, (b) Potential Inventory with Uncertain Future Use and (c) Reprocessing Costs of Off-Specification Products.

(2)

Provisions for Inventory Differences generated when physical differences are detected when taking inventory, which exceed the tolerance levels for this process, At least two annual inventories are taken in the production sites and in the port in Chile (“zero sum” systems have immediate potential adjustments).

(3)

This algorithm corresponds to the provision of diverse percentages based on the complexity in the measurement and rotation of stock, as well as standard differences based on previous results, as is the case with provisions relating to Commercial Offices.