Inventories

12 Months Ended

Dec. 31, 2020

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, 2020		As of December 31, 2019
	ThUS$		ThUS$
Raw material		10,694		7,287
Production supplies		31,007		26,064
Products-in-progress		487,830		457,563
Finished product		563,497		492,424
Total		1,093,028		983,338

As of December 31, 2020, and December 31, 2019, the Company held caliche stockpiles, solutions in solar ponds and intermediary salts amounting ThUS$ 422,535 and ThUS$ 393,600, respectively (including products in progress).

As of December 31, 2020, bulk inventories recognized within work in progress and finished goods were ThUS$ 108,909 and ThUS$ 176,561, respectively. As of December 31, 2019, bulk inventories recognized within work in progress and finished goods were ThUS$ 104,295 and ThUS$ 204,686, respectively. Bulk products in progress do not include ponds or stockpiles, but they do include intermediary salts on pads.

As of December 31, 2020, and 2019, inventory allowances recognized, amounted to ThUS$ 80,930 and ThUS$ 88,174, 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, moisture, etc.), (see Note 3.13).

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

The breakdown of inventory allowances is detailed as follows:

Type of inventory	As of December 31, 2020		As of December 31, 2019
	ThUS$		ThUS$
Raw material and supplies for production		1,934		2,488
Products-in-progress		66,122		71,468
Finished product		12,874		14,218
Total		80,930		88,174

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

As of December 31, 2020, and December 31, 2019, movements in provisions are detailed as follows:

Conciliation	As of December 31, 2020			As of December 31, 2019			As of December 31, 2018
	ThUS$			ThUS$			ThUS$
Beginning balance		88,174			105,282			96,284
Increase in Lower Value (1)		(5,404	)		(6,987	)		7,845
Additional Provision Differences of Inventory (2)		(704	)		(123	)		3,176
Increase / Decrease eventual differences and others (3)		1,244			(6,262	)		2,436
Provision Used		(2,380	)		(3,736	)		(4,459	)
Total changes		(7,244	)		(17,108	)		8,998
Final balance		80,930			88,174			105,282

(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.

(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.