Ann: Cauchari Resource Upgrade, page-16

Some will be seeing vindication for the MS view of impending market collapse as SQM finally outline their expansion plans in their own words. So what are they saying?

"The price pressure in the lithium market is a result of growing demand, which is expected to reach almost 260,000 MT this year, a 20% increase over last year. Given this, and long-term lithium expectations, we announced plans to increase our lithium production in Chile from 48,000 MT/year (our current capacity) to 180,000 MT/year. This capacity is planned in three stages, with a total capex of approximately US$525 million. In the past, the market has consistently underestimated lithium demand growth, and the industry has failed to grow supply accordingly. We have been a major player in the lithium market for over 20 years, and as always, remain very diligent in assessing the market and its needs. Our production and development teams have been able to expand lithium capacity in the past in a very efficient way. By executing this plan, we will have the capacity and flexibility to respond to market growth. The low capex per ton, and our very strong financial position, makes this an attractive investment."

OK, so 180 ktpa is getting up there -
It is a bit shy of the 210 ktpa that Corfo's Bitran was crowing about earlier in the year.
But it is well shy of the 350 ktpa that the MS analysts thought SQM could get to when they mistakenly confused a life of project metallic lithium quota with an annual LCE output...
And if SQM flat line at 180ktpa, it pretty much accounts for the entire 2.2 million t LCE quota through the balance of the contract to 2030 - that's all folks...

But there is an aspect of this that doesn't quite ring true - 525 mUSD capex.... Chris Berry tweeted "The capital intensity on the $SQM lithium expansion is incredible. What was that I was saying about the oligopoly getting stronger?"
I agree - it looks incredible.

Some context-
The SQM/LAC team over at Cauchari are spending 425mUSD to produce 25 ktpa = 17,000 USD/tpa

Olaroz phase 2 is to cost 285 mUSD for 25 ktpa = 11,400 USD/tpa

And the Atacama expansion is to come in at <4,000 USD/tpa.

So what are the SQM team doing that makes Atacama so much cheaper than Cauchari? I reckon I would be asking that if I was invested in LAC...
"Given the strong demand, we will work to increase our total capacity from 48,000MT to 180,000 MT in the next three years, investing a total of US$525 million in Chile, mainly in chemical plants in Antofagasta"
No pond expansion??

Never say never, but I am sceptical on both the time and investment required to more than triple their output. An announcement like this will certainly make it harder for unfunded juniors to get their funding - perhaps there could be a little smoke and mirrors in this announcement.