SQM Set to Gain from Lithium Geopolitics

TL;DR

Analyst Dilantha De Silva calls SQM stock his top lithium pick amid market revival and geopolitical shifts.
SQM shares surged 124% since his April 2025 bullish article.
Company's Australian sourcing and Codelco JV shield it from trade restrictions while targeting volume growth.[[1]](https://seekingalpha.com/article/4861130-sociedad-qumica-y-minera-de-chile-positioned-to-benefit-from-geopolitical-tensions)

The story at a glance

Analyst Dilantha De Silva argues Sociedad Química y Minera de Chile (SQM) stands to gain from lithium market tensions driven by U.S., EU, and South Korean stockpiling efforts. The article highlights SQM's strategies like Australian spodumene imports and its joint venture with Codelco. This comes as lithium prices recover after a 90% drop from 2022 peaks, with SQM's stock up sharply since De Silva's prior call.[[1]](https://seekingalpha.com/article/4861130-sociedad-qumica-y-minera-de-chile-positioned-to-benefit-from-geopolitical-tensions)

Key points

SQM stock is De Silva's leading bet for lithium revival, up 124% from his first bullish piece in April 2025 and another in July 2025.[[1]](https://seekingalpha.com/article/4861130-sociedad-qumica-y-minera-de-chile-positioned-to-benefit-from-geopolitical-tensions)
A $2.5 billion U.S. stockpile bill sets a price floor; De Silva sees legal details letting SQM avoid FEOF restrictions.[[1]](https://seekingalpha.com/article/4861130-sociedad-qumica-y-minera-de-chile-positioned-to-benefit-from-geopolitical-tensions)
SQM pivots geopolitically with record Australian spodumene volumes, diversifying from Chilean brine amid protectionism.[[1]](https://seekingalpha.com/article/4861130-sociedad-qumica-y-minera-de-chile-positioned-to-benefit-from-geopolitical-tensions)
Codelco joint venture structure protects cash flows, with SQM managing until 2030 and Codelco taking control after.[[1]](https://seekingalpha.com/article/4861130-sociedad-qumica-y-minera-de-chile-positioned-to-benefit-from-geopolitical-tensions)
Focus on volume growth positions SQM for larger share as U.S., EU, and South Korea stockpile lithium.[[1]](https://seekingalpha.com/article/4861130-sociedad-qumica-y-minera-de-chile-positioned-to-benefit-from-geopolitical-tensions)

Details and context

SQM extracts lithium from Chile's Salar de Atacama, the world's richest brine deposit, but faces rising trade barriers tied to Chinese influence—Tianqi holds a stake—and U.S. policies like FEOF, which limits foreign adversary sourcing. Australian spodumene provides a non-Chinese hard-rock alternative, with SQM ramping volumes and hydroxide output for supply security.[[1]](https://seekingalpha.com/article/4861130-sociedad-qumica-y-minera-de-chile-positioned-to-benefit-from-geopolitical-tensions)

The Codelco JV, formed via NovaAndino Litio merger in late 2025, extends operations to 2060; SQM runs it through 2030, then Codelco holds majority control under Chile's national strategy, boosting quotas to 1.65 million tonnes LCE by 2030 end.[[2]](https://www.argusmedia.com/en/news-and-insights/latest-market-news/2770632-sqm-codelco-create-public-private-li-miner)

Lithium spot prices crashed ~90% post-2022 highs due to oversupply, but stockpiling signals demand rebound from EVs and batteries.[[1]](https://seekingalpha.com/article/4861130-sociedad-qumica-y-minera-de-chile-positioned-to-benefit-from-geopolitical-tensions)

Key quotes

"Sociedad Química y Minera de Chile stock is my top bet for the lithium market revival." — Dilantha De Silva[[1]](https://seekingalpha.com/article/4861130-sociedad-qumica-y-minera-de-chile-positioned-to-benefit-from-geopolitical-tensions)

Why it matters

Geopolitical tensions accelerate Western efforts to secure lithium outside China, reshaping supply chains and favoring diversified producers like SQM. Investors see upside in SQM's low-cost position and growth plans, though tied to volatile prices and JV terms. Watch U.S. stockpile implementation, lithium demand from EVs, and Codelco JV execution post-2030.[[1]](https://seekingalpha.com/article/4861130-sociedad-qumica-y-minera-de-chile-positioned-to-benefit-from-geopolitical-tensions)