SANTIAGO, Dec 23 (Reuters) - Chile´s SQM said on Wednesday its board of directors agreed to begin the process of raising $1.1 billion in capital through the sale of common stock to help underwrite an ambitious expansion of its lithium, nitrate and iodine operations.
The world´s No. 2 lithium producer said in a statement it would call an extraordinary shareholders meeting on Jan. 22 to green-light a proposal to issue 22.4 million of the company´s series B shares.
If approved, the capital will help finance its previously announced $1.9 billion, four-year investment plan, which aims to more than double its capacity to produce lithium carbonate in Chile to 180,000 tonnes annually from 70,000 tonnes.
Lithium is a key ingredient in the batteries that power cellphones and electric vehicles.
SQM said in the statement that funds might also be put toward its Mount Holland lithium project in Australia. A final investment decision on that project is slated for the first quarter of 2021, the statement said.
Many miners had announced plans to boost output of lithium ahead of an expected spike in demand. But the COVID-19 pandemic temporarily slammed the brakes on the electric vehicle revolution, driving down prices, denting profits and forcing many companies to shelve expansion plans.
SQM said, however, it would push forward with its own expansion despite the pandemic, fueled by a steady increase of its sales volumes in 2020.
The company said it believed the lithium market would expand long-term by 20% a year, reaching 800,000 to 1 million metric tons by 2025.
Reporting by Dave Sherwood; Editing by Peter Cooney