LITHIUM LIFE CYCLE

Committed to caring for the environment, at SQM we work on production processes under strict national and international standards. For this reason, one of the most important actions of the operation is to measure the impact of the company's lithium production, both on the environment and on communities and areas of operation. It is the Life Cycle Analysis, an environmental management tool that objectively, methodically, systematically and scientifically analyzes the environmental impact generated by a process or product during its entire life cycle.

An important item that is measured is the carbon footprint of the operation and its products. In the case of lithium, the process is measured under strict, demanding and prestigious international standards, under the norms ISO standards 14040 and 14044. Currently, the company was able to measure under three measurement variables, based on energy use, water consumption, and CO2 from operations; It is a study carried out by Afry, the results of which are used to develop different processes in SQM's own operations and to communicate them, as the case may be, to different stakeholders. The LCA ISO 14040 and 14044 standards are applied for the calculations of these studies.

The study provides a document that allows defining the levels of CO2, energy and water consumption in order to keep the emissions of the operation and the life cycle of the product up to date and controlled. This method allows calculating the contribution of emissions for the manufacture of lithium ion batteries and cathode materials. There is also a strength that is reputational, since it is a laboratory in the United States, which depends on the Department of Energy of that country, which provides support and credibility to the information that emanates from its studies.

ENERGY CONSUMPTION

SQM's lithium production process has the lowest energy consumption compared to spodumene-based lithium production. This statement is based on the fact that during 2018 approximately half of the world's lithium production came from spodumene and the other half from brine, as is the case of SQM Lithium, and according to a life cycle analysis carried out by SQM and the consulting firm Afry, SQM has low energy consumption.

According to the SQM Lithium Life Cycle Analysis provided by AFRY, the water footprint in brine production is significantly lower than in Australian refined hard rock (spodumene) production in China. For example, SQM requires approximately 22,5 liters of water per kilogram of lithium carbonate for the entire process if the water consumption of the supplied products (door to door) is not included. In the LCA, the water consumption was calculated by SQM (cradle to customer) according to ISO 14040 and 14044.

During 2018, lithium carbonate and lithium hydroxide produced from brine and spodumene were consumed almost in equal parts and, according to our estimates, we can say that only 1/3 of the total carbon footprint was generated by the production based on brine such as SQM Lithium. That means SQM's lithium has one of the lowest carbon footprints in the world.

* Afry SQM study (2018 world data). The comparison was made with Australian spodumeno, refined in China.

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