Cascading Losses: SQM’s Struggles Impact Julio Ponce’s Holdings

Five Chilean companies indirectly controlled by Julio Ponce, who holds shares in SQM, have reported losses in the first six months of the year. These losses are directly tied to the poor performance of SQM, a non-metallic mining company, whose shares are the only asset these companies possess. The decline in lithium prices has significantly impacted SQM’s profitability, causing losses for Pampa Calichera, Oro Grande, Norte Grande, Nitratos, and Potasios. Pampa Calichera, for example, recorded a loss of US$128 million in the first half of the year, compared to profits of US$267 million in the same period last year. The company’s second-quarter earnings did show improvement, but they were still down 63% year-on-year, reaching US$42 million. This decline is directly attributable to SQM’s reduced profits due to lower lithium prices. Other companies in the cascade structure have experienced similar losses, highlighting the dependence of these entities on SQM’s performance.