Edgar Filing: CHEMICAL & MINING CO OF CHILE INC

UNITED STATES OF AMERICA

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN ISSUER

PURSUANT TO RULE 13A-16 OR 15D-16

OF THE SECURITIES AND EXCHANGE ACT OF 1934

Includes financial statements and their related notes for the six-month period ended June 30, 2012 filed by Sociedad Química y Minera de Chile S.A. before the Superintendencia de Valores y Seguros de Chile on August 27, 2012.

SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.

(Exact name of registrant as specified in its charter)

CHEMICAL AND MINING COMPANY OF CHILE INC.

(Translation of registrant's name into English)

El Trovador 4285, Santiago, Chile (562) 425-2000

(Address and phone number of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x

Form 40-F ¨

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ¨

No x

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82_________

On August 27, 2012, the Registrant filed with the Superintendencia de Valores y Seguros of Chile (the "SVS") a report that included information as to the Registrant's consolidated financial condition and results of operations for the six-month period ended June 30, 2012. Attached is a summary of such consolidated financial information included in the summary and in the report filed with the Superintendencia de Valores y Seguros of Chile. This financial information was prepared on the basis of International Financial Reporting Standards (“IFRS”).

THIS REPORT IS AN ENGLISH TRANSLATION OF, AND AN INTERNATIONAL FINANCIAL REPORTING STANDARDS PRESENTATION OF, THE SIX-MONTH PERIOD ENDED JUNE 30, 2011 REPORT FILED WITH THE SUPERINTENDENCIA DE VALORES Y SEGUROS (SVS) IN CHILE, AND UNLESS OTHERWISE INDICATED, FIGURES ARE IN US DOLLARS.

CONSOLIDATED FINANCIAL STATEMENTS

For the period ended June 30, 2012

SOCIEDAD QUIMICA Y MINERA DE CHILE S.A. AND SUBSIDIARIES

In Thousands of United States Dollars

This document includes:

-	Report of Independent Registered Public Accounting Firm

-	Consolidated Classified Statements of Financial Position

-	Consolidated Statements of Income by Function

-	Consolidated Statements of Comprehensive Income

-	Consolidated Statements of Cash Flows

-	Statements of Changes in Equity

-	Notes to the Consolidated Financial Statements

Table of Contents – Consolidated Financial Statements

Note		Page

	Consolidated Classified Statements of Financial Position	7
	Consolidated Statements of Income by Function	9
	Consolidated Statements of Comprehensive Income	11
	Consolidated Statements of Cash Flows	12
	Statements of Changes in Equity	14

	Notes to the consolidated financial statements
1	Identification and Activities of the Company and Subsidiaries
	1.1 Historical background	17
	1.2 Main domicile where the Company performs its production activities	17
	1.3 Codes of main activities	17
	1.4 Description of the nature of operations and main activities	17
	1.5 Other background	19

2	Basis of presentation for the consolidated financial statements
	2.1 Accounting period	21
	2.2 Financial statements	22
	2.3 Basis of measurement	22
	2.4 Accounting pronouncements	23
	2.5 Foreign currency transactions	26
	2.6 Basis of consolidation	28
	2.7 Significant accounting judgments, estimates and assumptions	31

3	Significant accounting policies
	3.1 Inventory	32
	3.2 Trade and other receivables	33
	3.3 Equity-accounted investees	33
	3.4 Property, plant and equipment	34
	3.5 Investment property	36
	3.6 Segment reporting	37
	3.7 Revenue recognition	38
	3.8 Income tax and deferred taxes	39
	3.9 Earnings per share	40
	3.10 Impairment of non-financial assets	41
	3.11 Financial assets	42
	3.12 Financial liabilities	43
	3.13 The environment	45
	3.14 Minimum dividend	45
	3.15 Consolidated statement of cash flows	45

Table of Contents – Consolidated Financial Statements (continued)

Note		Page

	3.16 Obligations related to employee termination benefits and pension Commitmetns	45
	3.17 Financial derivatives and hedge transactions	47
	3.18 Leases	49
	3.19 Prospecting expenses	50
	3.20 Other provisions	50
	3.21 Compensation plans	51
	3.22 Good and service insurance expenses	51
	3.23 Intangible assets	51
	3.24 Research and development expenses	53
	3.25 Classification of balances as current and non-current	53

4	Financial risk management
	4.1 Management risk policy	54
	4.2 Risk factors	55
	4.3 Risk measurement	58

5	Changes in estimates and accounting policies (consistent presentation)
	5.1 Changes in accounting estimates	59
	5.2 Changes in accounting policies	59

6	Parent’s separate assets and liabilities
	6.1 Parent’s separate assets and liabilities	60
	6.2 Parent entity	60
	6.3 Jointly arrangements of controlling interest	60
	6.4 Information on consolidated subsidiaries	62
	6.5 Detail of transactions between consolidated companies	68

7	Cash and cash equivalents
	7.1 Types of cash and cash equivalents	69
	7.2 Short-term investments, classified as cash equivalents	70
	7.3 Information on cash and cash equivalents by currency	70
	7.4 Amount of significant restricted (unavailable) cash balances	71
	7.5 Short-term deposits, classified as cash equivalents	72

8	Inventories	74

9	Related party: disclosures
	9.1 Related party disclosures	75
	9.2 Relations between the Parent and the Entity	75
	9.3 Intermediate parent that publicly issues financial statements	76
	9.4 Detailed identification of the link between the parent company and the subsidiary	76

Table of Contents – Consolidated Financial Statements (continued)

Note		Page

	9.5 Detail of related parties and related party transactions	78
	9.6 Trade receivables due from related parties, current	79
	9.7 Trade payables due to related parties, current	80
	9.8 Board of Directors and Senior Management	81
	9.9 Key Management Personnel Compensation	84

10	Financial instruments
	10.1 Classes of other financial assets	85
	10.2 Trade and other receivables, current and non-current	85
	10.3 Hedging assets and liabilities	89
	10.4 Financial liabilities	91
	10.5 Trade and other payables	100
	10.6 Financial liabilities at fair value through profit or loss	101
	10.7 Financial asset and liability categories	102
	10.8 Financial assets pledged as guarantee	104
	10.9 Estimated fair value of financial instruments and financial derivatives	104
	10.10 Nature and scope of risks arising from financial instruments	106

11	Equity-accounted investees
	11.1 Investments in associates recognized according to the equity method of accounting	106
	11.2 Assets, liabilities, revenue and expenses of associates	107
	11.3 Detail of investments in associates	108

12	Joint ventures
	12.1 Policy for accounting for joint ventures in a Parent’s separate financial statements	109
	12.2 Disclosures of interest in joint ventures	109
	12.3 Detail of assets, liabilities and profit or loss of significant investments in joint ventures by company	110
	12.4 Detail of investments in joint ventures	111

13	Intangible assets and goodwill
	13.1 Balances	112
	13.2 Disclosures on intangible assets and goodwill	112

Table of Contents – Consolidated Financial Statements (continued)

Note		Page

14	Property, plant and equipment
	14.1 Classes of property, plant and equipment	116
	14.2 Reconciliation of changes in property, plant and equipment by class	118
	14.3 Detail of property, plant and equipment pledged as guarantee	120
	14.4 Additional information	120

15	Employee benefits
	15.1 Provisions for employee benefits	121
	15.2 Policies on defined benefit plans	122
	15.3 Other long-term benefits	123
	15.4 Post-employment benefit obligations	124
	15.5 Staff severance indemnities	125

16	Executive compensation plan	126

17	Disclosures on equity
	17.1 Capital management	128
	17.2 Disclosures on preferred share capital	129
	17.3 Disclosures on reserves in equity	131
	17.4 Dividend policies	132
	17.5 Provisional dividends	133

18	Provisions and other non-financial liabilities
	18.1 Classes of provisions	135
	18.2 Description of other provisions	136
	18.3 Other non-financial liabilities, current	136
	18.4 Changes in provisions	138
	18.5 Detail of main classes of provisions	139

19	Contingencies and restrictions
	19.1 Lawsuits or other relevant events	140
	19.2 Restrictions	145
	19.3 Commitments	146
	19.4 Restricted or pledged cash	146
	19.5 Sureties obtained from third parties	147
	19.6 Indirect guarantees	148

Table of Contents – Consolidated Financial Statements (continued)

Note		Page

20	Revenue	149

21	Earnings per share	149

22	Borrowing costs	150

23	Effect of fluctuations on foreign currency exchange rates	151

24	Environment
	24.1 Disclosures on disbursements related to the environment	152
	24.2 Detail of information on disbursements related to the environment	153
	24.3 Description of each project indicating whether these are in process or have been finished	170

25	Other current and non-current financial assets	174

26	Operating segments
	26.1 Operating segments	176
	26.2 Information on operating segments	178
	26.3 Integral statements classified by operation segments, based in groups of products	180
	26.4 Revenue from transactions with other company operating segments	182
	26.5 Information on geographical areas	183
	26.6 Information on main customers	183
	26.7 Segments by geographical areas	184
	26.8 Property, plant and equipment classified by geographical areas	185

27	Gains (losses) from operating activities in the statement of income by function of expenses, exposed according to their nature
	27.1 Revenue	186
	27.2 Cost of sales	186
	27.3 Other income	187
	27.4 Administrative expenses	187
	27.5 Other expenses by function	188
	27.6 Other gains (losses)	188
	27.7 Summary of expenses by nature	189

Table of Contents – Consolidated Financial Statements (continued)

Note		Page

28	Income tax and deferred taxes
	28.1 Current tax assets	190
	28.2 Current tax liabilities	191
	28.3 Tax earnings	191
	28.4 Income tax and deferred taxes	192

29	Disclosures on the effects of fluctuations in foreign currency exchange rates	201

30	Direct cash flow state, proforma	206
31	Subsequent events
	31.1 Authorization of the financial statements	207
	31.2 Disclosures on subsequent events	208
	31.3 Detail of dividends declared after the balance sheet date	208

CONSOLIDATED CLASSIFIED STATEMENTS OF FINANCIAL POSITION

ASSETS	Note		As of June 30, 2012 ThUS$		As of December 31, 2011 ThUS$

Current assets
Cash and cash equivalents		7.1		415,279		444,992
Other current financial assets		10.1		375,704		169,261
Other current non-financial assets		25		48,265		63,792
Trade and other receivables, current		10.2		488,347		412,062
Trade receivables due from related parties, current		9.6		109,779		117,139
Current inventories		8.0		794,179		744,402
Current tax assets		28.1		3,642		4,765
Total current assets				2,235,195		1,956,413

Non-current assets
Other non-current financial assets		10.1		38,397		30,488
Other non-current non-financial assets		25		27,957		24,651
Trade receivables, non-current		10.2		1,335		1,070
Investments in equity-accounted investees		11.1		66,780		60,694
Intangible assets other than goodwill		13.1		4,041		4,316
Goodwill		13.1		38,605		38,605
Property, plant and equipment		14.1		1,847,832		1,755,042
Deferred tax assets		28.4		260		304
Total non-current assets				2,025,207		1,915,170
Total assets				4,260,402		3,871,583

The accompanying notes form an integral part of these consolidated financial statements.

CONSOLIDATED CLASSIFIED STATEMENTS OF FINANCIAL POSITION, (continued)

Liabilities and Equity	Note		As of June 30, 2012 ThUS$			As of December 31, 2011 ThUS$

Liabilities
Current liabilities
Other current financial liabilities		10.4		186,083			161,008
Trade and other payables, current		10.5		180,686			183,032
Trade payables due to related parties, current		9.7		-			873
Other current provisions		18.1		16,430			16,937
Current tax liabilities		28.2		38,663			75,418
Provisions for employee benefits, current		15.1		21,838			30,074
Other current non-financial liabilities		18.3		95,846			161,961
Total current liabilities				539,546			629,303

Non-current liabilities
Other non-current financial liabilities		10.4		1,367,093			1,237,027
Other non-current provisions		18.1		6,814			8,595
Deferred tax liabilities		28.4		103,194			98,594
Provisions for employee benefits, non-current		15.1		36,440			33,684
Total non-current liabilities				1,513,541			1,377,900
Total liabilities				2,053,087			2,007,203

Equity		17
Share capital				477,386			477,386
Retained earnings				1,693,822			1,351,560
Other reserves				(17,096	)		(16,112	)
Equity attributable to owners of the Parent				2,154,112			1,812,834
Non-controlling interest				53,203			51,546
Total equity				2,207,315			1,864,380
Total liabilities and equity				4,260,402			3,871,583

The accompanying notes form an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENTS OF INCOME BY FUNCTION

			January to June						April to June
			2012			2011			2012			2011
	Note		ThUS$			ThUS$			ThUS$			ThUS$

Revenue		20		1,.212,956			1,031,700			683,330			551,665
Cost of sales		27.2		(681,027	)		(634,520	)		(387,665	)		(342,090	)
Gross profit				531,929			397.180			295,665			209,575

Other income		27.3		9,453			5,377			4,790			2,041
Administrative expenses		27.4		(48,287	)		(43,148	)		(25,301	)		(22,580	)
Other expenses by function		27.5		(15,523	)		(26,863	)		(5,432	)		(11,898	)
Other gains (losses)		27.6		20			4,712			(29	)		4,821
Gain (loss) from operating activities				477,592			337,258			269,693			181,959
Finance income				12,784			11,492			7,247			5,835
Finance costs		22		(26,458	)		(22,618	)		(14,395	)		(11,991	)
Share of profit of associates and joint ventures accounted for using the equity method				13,300			10,039			5,236			6,382
Foreign currency exchange differences		23		(15,305	)		(7,141	)		(10,392	)		(4,242	)
Gain (loss) before taxes				461,913			329,030			257,389			177,943
Income tax expense, continuing operations		28.4		(116,288	)		(83,393	)		(63,518	)		(44.437	)

Profit (loss) from continuing operations				345,625			245,637			193,871			133,506

Profit for the period				345,625			245,637			193,871			133,506
Profit attributable to
Owners of the Parent				342.237			243,616			192,208			132,221
Non-controlling interest				3,388			2,021			1,663			1,285
Profit for the period				345,625			245,637			193,871			133,506

The accompanying notes form an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENTS OF INCOME BY FUNCTION (continued)

			January to June				April to June
	Note		2012		2011		2012		2011
			ThUS$		ThUS$		ThUS$		ThUS$
Earnings per share
Common shares
Basic earnings per share (US$ per share)		21		1.3003		0.9256		0.7303		0.5024
Basic earnings per share (US$ per share) from continuing operations				1.3003		0.9256		0.7303		0.5024

Diluted common shares
Diluted earnings per share (US$ per share)		21		1.3003		0.9256		0,7303		0.5024
Diluted earnings per share (US$ per share) from continuing operations				1.3003		0.9256		0,7303		0.5024

The accompanying notes form an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	January to June						April to June
	2012			2011			2012			2011
Statements of comprehensive income	ThUS$			ThUS$			ThUS$			ThUS$

Profit for the period		345,625			245,637			193,871			133,506
Components of other comprehensive income before taxes and foreign currency translation difference
Gain (loss) from foreign currency translation difference, before taxes		676			10			(761	)		110
Other comprehensive income before taxes and foreign currency translation differences		676			10			(761	)		110
Cash flow hedges
(Gain) loss from cash flow hedges before taxes		(1,820	)		(3,962	)		1,888			(1,062	)
Other comprehensive income before taxes and cash flow hedges		(1,820	)		(3,962	)		1,888			(1,062	)
Other comprehensive income before taxes and actuarial gains (losses) from defined benefit plans					(75	)					(75	)
Other reserves					-
Other components of other comprehensive income before taxes		(1,144	)		(4,027	)		1,127			(1,027	)

Income taxes associated with components of other comprehensive income
Income taxes associated with cash flow hedges in other comprehensive income		193			793			(556	)		213
Income taxes associated with components of other comp0rehensive income		193			793			(556	)		213

Other comprehensive income		(951	)		(3,234	)		571			(814	)

Total comprehensive income		344,674			242,403			194,442			132,692

Comprehensive income attributable to
Owners of the Parent		341,253			240,382			192,809			131,384
Non-controlling interest		3,421			2,021			1,633			1,308
Total comprehensive income		344,674			242,403			194,442			132,692

The accompanying notes form an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

		06/30/2012			06/30/2011
Statement of Cash Flows	Note	ThUS$			ThUS$

Cash flows from (used in) operating activities

Profit for the period			345,625			245,637
Adjustment to reconcile profit for the period

Adjustment for decreases (increases) in inventories			(61,876	)		(36,352	)
Adjustment for decreases (increases) in trade receivables			(36,386	)		(34,706	)
Adjustment for decreases (increases) in other receivables from operating activities			(28,423	)		(26,793	)
Adjustment for decreases (increases) in trade payables			(61,724	)		(49,538	)
Adjustment for decreases (increases) in other payables from operating activities			(93,820	)		12,822
Adjustment for depreciation and amortization			94,241			88,890
Adjustment for provisions			21,613			52,974
Adjustment for income tax expense			116,289			83,393
Adjustment for unrealized foreign currency translation loss (gain)			15,305			7,141
Adjustment for undistributed profit from associates			(13,300	)		(10,039	)
Other adjustments for items other than cash			40,590			11,106
Other adjustments for the effects on cash from investing or financing activities			(242	)		(112	)

Reconciling adjustments			(7,733	)		98,786

Net cash from (used in) operating activities			337,892			344,423

Dividends received			10,857			2,269
Interest paid			(15,849	)		(230	)
Income tax paid			-			(39,328	)
Net cash from (used in) operating activities			332,900			307,134

Cash flows from (used in) investing activities

Cash flows from loss of control of subsidiaries or other businesses			961			-
Payments to acquire interest in joint ventures			(4,197	)		(2,500	)
Proceeds from the sale of property, plant and equipment			1,626			1,255
Acquisition of property, plant and equipment			(188,904	)		(238,324	)
Cash advances and loans granted to third parties			(686	)		-
Third parties payment of loans			-			410
Other cash inflows (outflows)			(199,125	)		(41,820	)
Net cash from (used in) investing activities			(390,325	)		(280,979	)

The accompanying notes form an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

	Note		06/30/2012 ThUS$			06/30/2011 ThUS$

Cash flows from (used in) financing activities

Proceeds from long-term loans				296,502			200,000
Repayment of loans				(160,000	)		(170,000	)
Dividends paid				(83,064	)		(83,050	)
Other cash inflows (outflows)				(18,316	)		(3,520	)

Net cash from (used in) financing activities				35,122			(56,570	)

Net increase (decrease) in cash and cash equivalents before the effect of changes in the exchange rate				(22,303	)		(30,415	)

Effects of exchange rate fluctuations on cash held				(7,410	)		(19,326	)
Net increase (decrease) in cash and cash equivalents				(29,713	)		(49,741	)

Cash and cash equivalents at beginning of period				444,992			524,652

Cash and cash equivalents at end of period		7		415,279			474,911

The accompanying notes form an integral part of these consolidated financial statements.

STATEMENTS OF CHANGES IN EQUITY

	Share capital		Foreign currency translation difference reserves			Cash flow hedge reserves			Actuarial gains (losses) from defined benefit plans			Other reserves			Subtotal other reserves			Retained earnings		Equity attributable to owners of the Parent			Non-controlling interest			Total
	ThUS$		ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$		ThUS$			ThUS$			ThUS$

Equity at beginning of the period		477,386		(1,251	)		(10,230	)		(2,954	)		(1,677	)		(16,112	)		1,351,560		1,812,834			51,546			1,864,380

Restated opening balance of equity		477,386		(1,251	)		(10,230	)		(2,954	)		(1,677	)		(16,112	)		1,351,560		1,812,834			51,546			1,864,380

Profit (loss)																			342,237		342,237			3,388			345,625

Other comprehensive income				643			(1,627	)								(984	)				(984	)		33			(951	)

Comprehensive income				643			(1,627	)		-			-			(984	)		342,237		341,253			3,421			344,674

Dividends																			25		25						25

Increase (decrease) in transfers and other changes																								(1,764	)		(1,764	)

Increase (decrease) in equity		-		643			(1,627	)		-			-			(984	)		342,262		341,278			1,657			342,935

Equity as of June 30, 2012		477,386		(608	)		(11,857	)		(2,954	)		(1,677	)		(17,096	)		1,693,822		2,154,112			53,203			2,207,315

The accompanying notes form an integral part of these consolidated financial statements.

STATEMENTS OF CHANGES IN EQUITY

	Share capital		Foreign currency translation difference reserves		Cash flow hedge reserves			Actuarial gains (losses) from defined benefit plans			Other reserves			Retained earnings			Equity attributable to owners of the Parent			Non-controlling interest			Total
	ThUS$		ThUS$		ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$

Equity at beginning of the period		477,386		1,530		(9,207	)		(2,036	)		(9,713	)		1,155,131			1,622,804			48,016			1,670,820

Restated opening balance of equity		477,386		1,530		(9,207	)		(2,036	)		(9,713	)		1,155,131			1,622,804			48,016			1,670,820

Profit (loss)		-		-		-			-			-			243,616			243,616			2,021			245,637

Other comprehensive income		-		10		(3,169	)		(75	)		(3,234	)		-			(3,234	)		-			(3,234	)

Comprehensive income		-		10		(3,169	)		(75	)		(3,234	)		243,616			240,382			2,021			242,403

Dividends declared		-		-		-			-			-			(76,425	)		(76,425	)		-			(76,425	)

Increase (decrease) from transfers and other changes		-		-		-			-			-			-			-			(794	)		(794	)

Total changes in equity		-		10		(3,169	)		(75	)		(3,234	)		167,191			163,957			1,227			165,184

Equity as of June 30, 2011		477,386		1,540		(12,376	)		(2,111	)		(12,947	)		1,322,322			1,786,761			49,243			1,836,004

The accompanying notes form an integral part of these consolidated financial statements.

Sociedad Química y Minera de Chile S.A. and Subsidiaries

Notes to the Consolidated Financial Statements

as of June 30, 2012

Sociedad Química y Minera de Chile S.A.

and Subsidiaries

Notes to the consolidated financial statements as of June 30, 2012

Note 1 – Identification and Activities of the Company and Subsidiaries

1.1

Historical background

Sociedad Química y Minera de Chile S.A. "SQM" is an open stock corporation organized under the laws of the Republic of Chile, Tax Identification No.93.007.000-9. The Company was constituted by public deed issued on June 17, 1968 by the Notary Public of Santiago, Mr. Sergio Rodríguez Garcés. Its existence was approved by Decree No. 1,164 of June 22, 1968 of the Ministry of Finance, and it was registered on June 29, 1968 in the Registry of Commerce of Santiago, on page 4,537 No. 1,992. SQM's headquarters are located at El Trovador 4285, Fl. 6, Las Condes, Santiago, Chile. The Company's telephone number is +56 2 425-2000.

The Company is registered with the Securities Registry of the Chilean Superintendence of Securities and Insurance (SVS) under No. 0184 dated March 18. 1983 and is subject to the inspection of the SVS.

1.2

Main domicile where the Company performs its production activities

The Company’s main domiciles are: Calle Dos Sur plot No. 5 - Antofagasta; Arturo Prat 1060 - Tocopilla; Administración Building w/n - Maria Elena; Administración Building w/n Pedro de Valdivia - María Elena, Former Florencia office w/n - Sierra Gorda, Anibal Pinto 3228 - Antofagasta, Kilometer 1378 5 Norte Highway - Antofagasta, Coya Sur Plant w/n - Maria Elena, kilometer 1760 5 Norte Highway - Pozo Almonte, Pampa Yumbes w/n - Tal-tal.

1.3

Codes of main activities

The codes of the main activities as established by the Chilean Superintendence of Securities and Insurance are as follows:

1700 (Mining)

2200 (Chemical products)

1300 (Investment)

1.4

Description of the nature of operations and main activities

Our products are mainly derived from mineral deposits found in northern Chile. We mine and process caliche ore and brine deposits. The caliche ore in northern Chile contains the only known nitrate and iodine deposits in the world and is the world’s largest commercially exploited source of natural nitrates. The brine deposits of the Salar de Atacama, a salt-encrusted depression within the Atacama desert in northern Chile, contain high concentrations of lithium and potassium as well as significant concentrations of sulfate and boron.

Notes to the consolidated financial statements as of June 30, 2012

Note 1 – Identification and Activities of the Company and Subsidiaries (continued)

1.4

Description of the nature of operations and main activities, continued

From our caliche ore deposits, we produce a wide range of nitrate-based products used for specialty plant nutrients and industrial applications, as well as iodine and iodine derivatives. At the Salar de Atacama, we extract brines rich in potassium, lithium, sulfate and boron in order to produce potassium chloride, potassium sulfate, lithium solutions, boric acid and bischofite (magnesium chloride). We produce lithium carbonate and lithium hydroxide at our plant near the city of Antofagasta, Chile, from the solutions brought from the Salar de Atacama. We market all of these products through an established worldwide distribution network.

We sell our products in more than 100 countries worldwide through a worldwide distribution network and generate our mainly revenue from foreign countries.

Our products are divided into six categories: specialty plant nutrition, iodine and its derivatives, lithium an its derivatives, industrial chemicals, potassium and other products and services, described as follows:

Specialty plant nutrients This business is characterized by being closely related to its customers to which it has specialized staff who provide expert advisory in best practices for fertilization according to each type of crop, soil and climate. Within this type of business, potassium derivative products and specially potassium nitrate have had a leading role given the contribution they make to develop crops insuring an improvement in post-crop life in addition to improving quality, flavor and fruit color. The potassium nitrate, which is sold in multiple formats and as a part of other specialty mixtures, is complemented by sodium nitrate, potassium sodium nitrate, and more than 200 fertilizing mixtures.

Iodine: is the biggest producer of iodine at worldwide level, which is a product which is widely used in the pharmaceutical industry, technology and nutrition. Additionally, iodine is used as X ray contrast media and polarizing film for LCD displays.

Lithium: the Company’s lithium is mainly used for manufacturing rechargeable batteries for cell phones, cameras and notebooks. Through the manufacturing of lithium-based products, SQM provides significant materials to face great challenges such as the efficient use of energy and raw materials. Lithium is not only used for rechargeable batteries and in new technologies for vehicles propelled by electricity, but is also used in industrial applications to lower melting temperature and to help saving costs and energy

Notes to the consolidated financial statements as of June 30, 2012

Note 1 – Identification and Activities of the Company and Subsidiaries (continued)

1.4

Description of the nature of operations and main activities, continued

Industrial Chemicals Industrial chemicals are products used as supplies for a number of production processes. SQM participates in this line of business during more than 30 years producing sodium nitrate, potassium nitrate, boric acid and potassium chloride. Industrial nitrates have increased their importance over the last few years due to their use as storage means for thermal energy at solar energy plants, which are widely used in countries as Spain and the United States in their search for decreasing CO₂emissions

Potassium: The potassium is a primary essential macro-nutrient, and even though does not form part of the plant’s structure, has a significant role for the developing of its basic functions, validating the quality of a crop, increasing post-crop life, improving the crop flavor, its amount in vitamins and its physical appearance. Within this business line, SQM has also potassium chlorate and potassium sulfate, both extracted from the salt layer located under the Salar de Atacama (the Atacama Saltpeter Deposit.)

Other products and services: This operating segment includes revenue from commodities, provision of services, interest, royalties and dividends.

1.5

Other background

Employees

As of June 30, 2012 and December 3, 2011, the Company’s employees were as follows:

	06/30/2012		12/31/2011

Permanent employees		5,372		4,902

Notes to the consolidated financial statements as of June 30, 2012

Note 1 – Identification and Activities of the Company and Subsidiaries (continued)

1.5

Other background, continued

Main shareholders

The table below establishes certain information about the beneficial property of Series A and Series B shares of SQM as of June 30, 2012 and December 31, 2011. In respect to each shareholder which has interest of more than 5% of outstanding Series A or B shares. The information below is taken from our records and reports controlled in the Central Securities Depository and reported to the Superintendence of Securities and Insurance (SVS) and the Chilean Stock Exchange, whose main shareholders are as follows

Shareholder 06/30/2012	Number of Series A shares with ownership		% of Series A shares			Number of Series B shares with ownership		% of Series B shares B			Total % of shares
Inversiones El Boldo Limitada		44,751,196		31.33	%		17,571,676		14.60	%		23.68	%
Sociedad de Inversiones Pampa Calichera S.A.(*)		44,558,830		31.20	%		10,741,799		8.92	%		21.01	%
The Bank of New York		-		-			41,457,862		34.44	%		15.75	%
Inversiones RAC Chile Limitada		19,200,242		13.44	%		2,699,773		2.24	%		8.32	%
Potasios de Chile S.A.(*)		18,179,147		12.73	%		156,780		0.13	%		6.97	%
Inversiones Global Mining (Chile) Limitada (*)		8,798,539		6.16	%		-		-			3.34	%
Banchile Corredores de Bolsa S.A.		140,591		0.10	%		4,394,173		3.65	%		1.72	%
Corpbanca Corredores de Bolsa S.A.		11,191		0.01	%		4,289,993		3.56	%		1.63	%
Banco Itau on behalf of investors		-		-			3,878,905		3.22	%		1.47	%
Inversiones La Esperanza Limitada		3,693,977		2.59	%		-		-			1.40	%

(*) Total Pampa Group 31.32%

Shareholder as of 12/31/2011		Number of Series A shares with ownership		% of Series A shares			Number of Series B shares with ownership		% of Series B shares B			Total % of shares
Inversiones El Boldo Limitada		44,751,196		31.33	%		17,571,676		14.60	%		23.68	%
Sociedad de Inversiones Pampa Calichera S.A.(*)		44,758,830		31.34	%		12,241,799		10.17	%		21.66	%
The Bank of New York		-		-			42,036,912		34.92	%		15.97	%
Inversiones RAC Chile Limitada		19,200,242		13.44	%		2,699,773		2.24	%		8.32	%
Potasios de Chile S.A.(*)		18,179,147		12.73	%		156,780		0.13	%		6.97	%
Inversiones Global Mining (Chile) Limitada (*)		8,798,539		6.16	%		-		-			3.34	%
Banchile Corredores de Bolsa S.A.		136,919		0.10	%		4,890,193		4.06	%		1.91	%
Corpbanca Corredores de Bolsa S.A.		11,189		0.01	%		4,264,250		3.54	%		1.62	%
Inversiones La Esperanza Limitada		3,693,977		2.59	%		-		-			1.40	%
Banco Itau on behalf of investors		-		-			3,693,080		3.07	%		1.40	%

(*) Total Pampa Group 31.97%

Notes to the consolidated financial statements as of June 30, 2012

Note 2 - Bases of presentation for consolidated financial statements

2.1

Accounting period

These consolidated financial statements cover the following period:

Consolidated Statements of Financial Position for the period ended June 30, 2012 and the year ended December 31, 2011.

Consolidated Statements of Changes in Equity for the period ended June 30, 2012 and 2011.

Consolidated Statements of Comprehensive Income for the period between January 1 and June 30, 2012 and 2011.

Consolidated Statements of Cash Flows, indirect method for the periods ended June 30, 2012 and 2011.

Notes to the consolidated financial statements as of June 30, 2012

Note 2 - Bases of presentation for consolidated financial statements (continued)

2.2

Financial statements

Interim and annual consolidated financial statements of Sociedad Química y Minera de Chile S.A. and Subsidiaries, have been prepared in accordance with International Financial Reporting Standards (hereinafter “IFRS”) and represent the full, explicit and unreserved application of the aforementioned international standards issued by the International Accounting Oversight Board (IASB).

These interim and annual consolidated financial statements reflect fairly the Company’s equity and financial position and the results of its operations, changes in the statement of recognized revenue and expenses and cash flows, which have occurred during the periods then ended.

IFRS establish certain alternatives for their application. Those applied by the Company and its subsidiaries are included in detail in this Note.

The accounting policies used in the preparation of these consolidated interim and annual accounts comply with each IFRS in force at their date of presentation.

2.3

Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except for the following material items:

inventories are recorded at the lower of cost and net realizable value;

other current and non-current financial liabilities at amortized cost;

financial derivatives at fair value; and

staff severance indemnities and pension commitments at actuarial value.

Notes to the consolidated financial statements as of June 30, 2012

Note 2 - Bases of presentation for consolidated financial statements (continued)

2.4

Accounting pronouncements

At the date of these consolidated financial statements, the following accounting pronouncements had been issued by the IASB but its application date is not effective.

	New standards	Mandatory application for:
IAS 19	Employee Benefits	January 1, 2013
IAS 27	Separate Financial Statements	January 1, 2013
IFRS 9	Financial Instruments	January 1, 2013
IFRS 10	Consolidated financial statements	January 1, 2013
IFRS 11	Joint arrangements	January 1, 2013
IFRS 12	Disclosure of Interests in Other Entities	January 1, 2013
IFRS 13	Fair Value Measurement	January 1, 2013

IAS 19 Revised “Employee Benefits”

Issued in June 2011, supersedes IAS 19 (1998). This revised standard amends the recognition and measurement of defined benefit plan expenses and termination benefits. Additionally, it includes amendments to disclosures of all employee benefits.

IAS 27 “Separate Financial Statements”

Issued in May 2011, supersedes IAS 27 (2008). The scope of this standard is restricted from this change solely to separate financial statements, given that the aspects linked to the definition of control and consolidation were removed and included in IFRS 10. Its early adoption is allowed together with IFRS 10, IFRS 11 and IFRS 12 and the amendment to IAS 28.

IFRS 9 “Financial Instruments”

Issued in December 2009, amends the classification and measurement of financial assets.

Subsequently, this standard was amended in November 2010 to include the treatment and classification of financial liabilities. Its early adoption is permitted.

IFRS 10 “Consolidated Financial Statements”

Issued in May 2011, supersedes SIC 12 “Consolidation – Special Purpose Entities” and portions of IAS27 “Consolidated Financial Statements”. It establishes clarifications and new parameters for the definition of control, as well as the preparation of consolidated financial statements. Its early adoption is permitted together with IFRS 11, IFRS 12 and amendments to IAS 27 and IAS 28.

Notes to the consolidated financial statements as of June 30, 2012

Note 2 - Bases of presentation for consolidated financial statements (continued)

2.4

Accounting pronouncements, continued

NIIF 11 “Joint Arrangements”

Issued in May 2011, supersedes IAS 31 “Interests in Joint Ventures” and SIC 13 “Joint Controlled Entities”. Its amendments include the elimination of the concept of jointly-controlled assets and the possibility of proportional consolidation of entities under common control. Its early adoption is permitted together with IFRS 10, IFRS 12 and amendments to IAS 27 and IAS 28.

IFRS 12 “Disclosure of Interests in Other Entities”

Issued in May 2011, is applicable for entities with investments in subsidiaries, joint ventures and associates. Its early adoption is permitted together with IFRS 10, IFRS 11 and amendments to IAS 27 and IAS 28

IFRS 13 “Fair Value Measurement”

Issued in May, gathers in one single standard the method for measuring fair value of assets and liabilities and disclosures required for this purpose and incorporates new concepts and clarifications for measurement.

	Improvements and Amendments	Mandatory application for:
IAS 1	Presentation of Financial Statements	July 1, 2012
IFRS 7	Financial instruments: Information to disclosed	January 1, 2013
IAS 32	Financial instruments: Presentation	January 1, 2014
IAS 16	Property, Plant and Equipment	January 1, 2013
IAS 32	Financial instruments: Presentation	January 1, 2013
IAS 34	Intermediate Financial Information	January 1, 2013
IFRS 10	Consolidated Financial Statements	January 1, 2013
IFRS 11	Joint Agreements	January 1, 2013
IFRS 12	Disclosures of participation in other entities	January 1, 2013

IAS 1 “Presentation of Financial Statements”

Issued in June 2011, the main amendment is that it requires that items in Other Comprehensive Income must be classified and grouped by assessing whether they will be reclassified to subsequent periods. Its early adoption is permitted.

IFRS 7 “Financial Instruments: Information to be disclosed”

Issued on December 2011. Requires to improve the present disclosures of compensation of financial assets and liabilities, in order to increase the convergence between IFRS and USGAAP. These disclosures are centered in quantitative information about the acknowledged financial instruments which are compensated Financial Situation Status. Its anticipated adoption is allowed.

IAS 32 “Financial Instruments: Presentation”

Issued on December 2011. Explains the requirements for the compensation of financial assets and liabilities in the Financial Situation Status. Specifically, it indicates that the right to compensation must be available as of the date of the financial statement and not depend on a future event. Specifically, it states that the right to compensation must be available as of the date of the financial statement and not depend on a future event. It also indicates that it must be legally binding for the counterparts, in the normal course of the business as well as in the case of unpaid, insolvency, or bankruptcy. Its anticipated adoption is allowed.

Notes to the consolidated financial statements as of June 30, 2012

Improvements to the International Regulations of Financial Information, issued on May 2012.

IAS 16 “Property, Plant, and Equipment”

Clarifies that the spare parts and the service equipment will be classified as Property, Plant, and Equipment, instead of inventories, whenever it meets the definition of Property, Plant, and Equipment.

IAS 32 “Presentation of Financial Instruments”

Clarifies that the treatment of the capital gains tax related with the distribution and transaction costs.

IAS 34 “Intermediate Financial Information”

Clarifies the requirements to expose assets and liabilities by segments, during interim periods, confirming the same requirements applicable to the annual financial statements.

IFRS 10 Consolidated Financial Statements

IFRS 11 “Joint Agreements”

IFRS 12 “Disclosures of participation in other entities”

Issued on June 2012. Clarifies the transitory dispositions for IFRS 10, pointing out that it is necessary to apply it the first day of the annual period in which the regulation is adopted. Therefore, it could be necessary to make modifications to the comparative information presented in such period, if the evaluation of the control over investments defers of that recognized according to IAS 27/SIC 12.

The Company's management estimates that the adoption of standards, amendments and interpretations described above are under evaluation and it is expected that they will not have a significant impact on the Consolidated Financial Statements of the Company.

Notes to the consolidated financial statements as of June 30, 2012

Note 2 - Basis of presentation for consolidated financial statements (continued)

2.5

Transactions in foreign currency

(a)

Functional and presentation currency

The Company’s quarter consolidated financial statements are presented in United States dollars (“U.S. dollars” or “USD”), which is the Company’s functional and presentation currency and is the currency of the main economic environment in which it operates.

Consequently, the term foreign currency is defined as any currency other than U.S. dollar.

The consolidated financial statements are presented without decimals.

The conversion of the financial statements of foreign companies with functional currency other than U.S. dollars is performed as follows:

Assets and liabilities using the exchange rate prevailing on the closing date of the consolidated financial statements.

Statement of income account items using the average exchange rate for the year.

Equity accounts are stated at the historical exchange rate prevailing at acquisition date.

Foreign currency translation differences which arise from the conversion of financial statements are recorded in the account “Foreign currency translation differences" within equity.

(b)

Basis of conversion

Domestic subsidiaries:

Assets and liabilities denominated in Chilean pesos and other currencies other than the functional currency (U.S. dollar) as of June 30, 2012 and December 31, 2011 have been translated to U.S. dollars at the exchange rates prevailing at those dates. The corresponding Chilean pesos were converted at Ch$501.84 per US$1.00 as of June 30, 2012, and Ch$519.20 per US$1.00 as of December 31, 2011.

The values of the UF (a Chilean peso-denominated, inflation-indexed monetary unit) used to convert the UF denominated assets and liabilities as of June 30, 2012 amounted to Ch$22,627.36 (US$45,09), and as of December 31, 2011 amounted to Ch$22,294.03 (US$42.94).

Notes to the consolidated financial statements as of June 30, 2012

Note 2 - Basis of presentation for consolidated financial statements (continued)

2.5

Transactions in foreign currency, (continued)

Foreign subsidiaries

The exchange rates used to translate the monetary assets and liabilities expressed in foreign currency at the closing date of each period in respect to the U.S. dollar are detailed as follows:

	06/30/2012		12/31/2011
	US$		US$

Brazilian Real		2.02		1.88
New Peruvian Sol		2.75		2.77
Argentinean Peso		4.50		4.30
Japanese Yen		79.31		77.74
Euro		0.79		0.77
Mexican Peso		13.65		13.98
Australian Dollar		1.02		1.03
Pound Sterling		0.64		0.64
South African Rand		8.23		8.10
Ecuadorian Dollar		1.00		1.00
Chilean Peso		501.84		519.20
UF		45.09		42.94

(c)

Transactions and balances

Non-monetary transaction balances denominated in a currency other than the functional currency (U.S. dollar) are translated using the exchange rate in force for the functional currency at the transaction date. Monetary assets and liabilities denominated in a foreign currency are translated at the exchange rate of the functional currency prevailing at the closing date of the consolidated classified statement of financial position. All differences are taken to the statement of income with the exception of all monetary items that provide an effective hedge for a net investment in a foreign operation. These items are recognized in other comprehensive income upon the disposal of the investment, at which time they are recognized in the statement of income. Tax charges and credits attributable to exchange differences on those monetary items are also recorded in other comprehensive income.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined.

Notes to the consolidated financial statements as of June 30, 2012

Note 2 - Basis of presentation for consolidated financial statements (continued)

2.5

Transactions in foreign currency, continued

(d)

Group entities

The profit or loss, assets and liabilities of all those entities with a functional currency other than the presentation currency are translated to the presentation currency as follows:

Assets and liabilities are translated at the closing date exchange rate as of the date of the consolidated statement of financial position.

Revenue and expenses in each profit or loss account are translated at average exchange rates for the year.

All resulting foreign currency exchange differences are recognized as a component separate in the foreign currency translation difference reserve

In consolidation, foreign currency exchange differences which arise from the conversion of a net investment in foreign entities are taken to net equity (other reserves). At the disposal date, these exchange differences are recognized in the statement of comprehensive income as part of the loss or gain from the sale.

2.6

Basis of consolidation

(a)

Subsidiaries

Subsidiaries are all those entities on which Sociedad Química y Minera de Chile S.A. has the control to lead the financial and operating policies, which, in general, is accompanied by participation greater than half the voting rights. Subsidiaries are consolidated from the date in which control is transferred to the Company and are excluded from consolidation on the date in which this control ceases to exist. Subsidiaries apply the same accounting policies that its Parent.

In order to recognize the acquisition of an investment, the Company uses the acquisition method. Under this method, the acquisition cost is the fair value of assets delivered, of equity instruments issued and of liabilities incurred or assumed at the exchange date plus costs directly attributable to acquisition. Identifiable assets acquired and identifiable liabilities and contingencies assumed in a business combination are initially stated at their fair value at the acquisition date. For each business combination, the acquirer measures the non-controlling interests in the acquiree at fair value or as a proportional part of the acquiree’s net identifiable assets.

Notes to the consolidated financial statements as of June 30, 2012

Note 2 - Basis of presentation for consolidated financial statements (continued)

2.6

Basis of consolidation, continued

Companies included in consolidation:

					Ownership interest
		Country of	Functional		06/30/2012				12/31/2011
TAX ID No.	Foreign subsidiaries	origin	currency		Direct		Indirect		Total		Total
Foreign	Nitratos Naturais Do Chile Ltda.	Brazil		US$		0.0000		100.0000		100.0000		100.0000
Foreign	Nitrate Corporation Of Chile Ltd.	United Kingdom		US$		0.0000		100.0000		100.0000		100.0000
Foreign	SQM North America Corp.	USA		US$		40.0000		60.0000		100.0000		100.0000
Foreign	SQM Europe N.V.	Belgium		US$		0.8600		99.1400		100.0000		100.0000
Foreign	Soquimich S.R.L. Argentina	Argentina		US$		0.0000		100.0000		100.0000		100.0000
Foreign	Soquimich European Holding B.V.	The Netherlands		US$		0.0000		100.0000		100.0000		100.0000
Foreign	SQM Corporation N.V.	Dutch Antilles		US$		0.0002		99.9998		100.0000		100.0000
Foreign	SQI Corporation N.V.	Dutch Antilles		US$		0.0159		99.9841		100.0000		100.0000
Foreign	SQM Comercial De México S.A. De C.V.	Mexico		US$		0.0013		99.9987		100.0000		100.0000
Foreign	North American Trading Company	USA		US$		0.0000		100.0000		100.0000		100.0000
Foreign	Administración Y Servicios Santiago S.A. De C.V.	Mexico		US$		0.0000		100.0000		100.0000		100.0000
Foreign	SQM Perú S.A.	Peru		US$		0.9800		99.0200		100.0000		100.0000
Foreign	SQM Ecuador S.A.	Ecuador		US$		0.0040		99.9960		100.0000		100.0000
Foreign	SQM Nitratos Mexico S.A. De C.V.	Mexico		US$		0.0000		51.0000		51.0000		51.0000
Foreign	SQMC Holding Corporation L.L.P.	USA.		US$		0.1000		99.9000		100.0000		100.0000
Foreign	SQM Investment Corporation N.V.	Dutch Antilles		US$		1.0000		99.0000		100.0000		100.0000
Foreign	SQM Brasil Limitada	Brazil		US$		2.7900		97.2100		100.0000		100.0000
Foreign	SQM France S.A.	France		US$		0.0000		100.0000		100.0000		100.0000
Foreign	SQM Japan Co. Ltd.	Japan		US$		1.0000		99.0000		100.0000		100.0000
Foreign	Royal Seed Trading Corporation A.V.V.	Aruba		US$		1.6700		98.3300		100.0000		100.0000
Foreign	SQM Oceania Pty Limited	Australia		US$		0.0000		100.0000		100.0000		100.0000
Foreign	Rs Agro-Chemical Trading A.V.V.	Aruba		US$		98.3333		1.6667		100.0000		100.0000
Foreign	SQM Indonesia S.A.	Indonesia		US$		0.0000		80.0000		80.0000		80.0000
Foreign	SQM Virginia L.L.C.	USA		US$		0.0000		100.0000		100.0000		100.0000
Foreign	SQM Venezuela S.A.	Venezuela		US$		-		-		-		100.0000
Foreign	SQM Italia SRL	Italy		US$		0.0000		100.0000		100.0000		100.0000
Foreign	Comercial Caimán Internacional S.A.	Cayman Islands		US$		0.0000		100.0000		100.0000		100.0000
Foreign	SQM Africa Pty.	South Africa		US$		0.0000		100.0000		100.0000		100.0000
Foreign	SQM Lithium Specialties LLC	USA		US$		0.0000		100.0000		100.0000		100.0000
Foreign	SQM Iberian S.A.(**)	Spain		US$		0.0000		100.0000		100.0000		100.0000
Foreign	Iodine Minera B.V.	The Netherlands		US$		0.0000		100.0000		100.0000		100.0000
Foreign	SQM Agro India Pvt. Ltd.	India		US$		0.0000		100.0000		100.0000		100.0000
Foreign	SQM Beijing Commercial Co. Ltd.	China		US$		0.0000		100.0000		100.0000		100.0000

Notes to the consolidated financial statements as of June 30, 2012

Nota 2 - Basis of presentation for consolidated financial statements (continued)

2.6

Basis of consolidation, continued

Companies included in consolidation:

					Ownership interest
		Country of		Functional	06/30/2012				12/31/2011
TAX ID No.	Domestic subsidiaries	origin		currency	Direct		Indirect		Total		Total
96.801.610-5	Comercial Hydro S.A.		Chile	US$		0.0000		60.6383		60.6383		60.6383
96.651.060-9	SQM Potasio S.A.		Chile	US$		99.9974		0.0000		99.9974		99.9974
96.592.190-7	SQM Nitratos S.A.		Chile	US$		99.9999		0.0001		100.0000		100.0000
96.592.180-K	Ajay SQM Chile S.A.		Chile	US$		51.0000		0.0000		51.0000		51.0000
86.630.200-6	SQMC Internacional Ltda.		Chile	Chilean peso		0.0000		60.6381		60.6381		60.6381
79.947.100-0	SQM Industrial S.A.		Chile	US$		99.0470		0.9530		100.0000		100.0000
79.906.120-1	Isapre Norte Grande Ltda.		Chile	Chilean peso		1.0000		99.0000		100.0000		100.0000
79.876.080-7	Almacenes y Depósitos Ltda.		Chile	Chilean peso		1.0000		99.0000		100.0000		100.0000
79.770.780-5	Servicios Integrales de Tránsitos y Transferencias S.A.		Chile	US$		0.0003		99.9997		100.0000		100.0000
79.768.170-9	Soquimich Comercial S.A.		Chile	US$		0.0000		60.6383		60.6383		60.6383
79.626.800-K	SQM Salar S.A.		Chile	US$		18.1800		81.8200		100.0000		100.0000
78.602.530-3	Minera Nueva Victoria Ltda.		Chile	US$		99.0000		1.0000		100.0000		100.0000
78.053.910-0	Proinsa Ltda.		Chile	Chilean peso		0.0000		60.5800		60.5800		60.5800
76.534.490-5	Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A.		Chile	Chilean peso		0.0000		100.0000		100.0000		100.0000
76.425.380-9	Exploraciones Mineras S.A.		Chile	US$		0.2691		99.7309		100.0000		100.0000
76.064.419-6	Comercial Agrorama Ltda. (*)		Chile	Chilean peso		0.0000		42.4468		42.4468		42.4468
76.145.229-0	Agrorama S.A. (***)		Chile	Chilean peso		0.0000		60.6377		60.6377		60.6377

(*) Comercial Agrorama Ltda. was consolidated given that the Company has control through subsidiary Soquimich Comercial S.A.

(**) On December 14, 2011, Fertilizantes Naturales S.A. changed its company name to SQM Iberian S.A.

(***) This subsidiary was incorporated on April 7, 2011.

Subsidiaries are consolidated on a line by line basis by including in the consolidated financial statements all of their assets, liabilities, revenues, expenses and cash flows upon making the respective adjustments and eliminations of intragroup operations.

The results from subsidiary companies acquired or disposed of during the year are included in consolidated statement of income accounts from the effective date of acquisition or up to the effective date of disposal, as applicable.

Non-controlling interests represent the portion of subsidiary net assets and operating results not owned directly or indirectly by the parent company.

Notes to the consolidated financial statements as of June 30, 2012

Note 2 - Basis of presentation for consolidated financial statements (continued)

2.7

Significant accounting judgments, estimates and assumptions

The information contained in these consolidated financial statements is the responsibility of the Company’s management, who expressly indicate that they have applied all the principles and criteria included in IFRS, issued by the IASB.

In the accompanying consolidated financial statements, judgments and estimates have been made by management to quantify certain assets, liabilities, revenues, expenses and commitments recorded and or disclosed therein. Basically, these estimates refer to the following:

The useful lives of tangible and intangible assets and their residual values.

Impairment evaluations of certain assets, including trade receivables.

Assumptions used for the actuarial calculation of commitments for employee pensions and staff severance indemnities.

Provisions for commitments assumed with third parties and contingent liabilities.

Inventory provisions based on technical studies which cover the different variables affecting products in stock (density. humidity. among others) and allowances on slow-moving spare parts in inventory.

Future costs for the closure of mining facilities.

The determination of the fair value of certain financial and non-financial assets and derivative instruments.

The determination and allocation of fair values in business combinations

Although these estimates have been made considering information available as of the date of preparation of these consolidated financial statements, it is possible that events that may occur in the future could make their modification necessary in future years. Changes would be recorded prospectively, recognizing the effects of the change in estimates in the respective future consolidated financial statements.

Notes to the consolidated financial statements as of June 30, 2012

Note 3 – Significant accounting policies

3.1

Inventory

The Company states inventories for the lower of cost and net realizable value. The cost price of finished products and products in progress includes direct costs of materials and; as applicable, labor costs, indirect costs incurred to transform raw materials into finished products and general expenses incurred in carrying inventories to their current location and conditions. The method used to determine the cost of inventories is weighted average cost.

The net realizable value represents the estimate of the sales price less all finishing estimated costs and costs which will be incurred in commercialization, sales and distribution processes.

Commercial discounts, rebates obtained and other similar entries are deducted in the determination of the acquisition price.

The Company conducts an evaluation of the net realizable value of inventories at the end of each year recording an estimate with a charge to income when these are overstated. When the circumstances, which previously caused the rebate ceased to exist, or when there is clear evidence of an increase in the net realizable value due to a change in the economic circumstances or prices of main raw materials, the estimate made previously is modified.

The valuation of obsolete, impaired or slow-moving products relates to their net estimated net realizable value.

Provisions on the Company's inventories have been made based on a technical study which covers the different variables which affect products in stock (density, humidity, among others.)

Raw materials, supplies and materials are recorded at the lower of acquisition cost or market value. Acquisition cost is calculated according to the annual average price method.

Notes to the consolidated financial statements as of June 30, 2012

Note 3 – Significant accounting policies (continued)

3.2

Trade and other receivables

Trade and other receivables relate to non-derivative financial assets with fixed and determinable payments and are not quoted in any active market. These arise from sales operations involving the products and/or services which the Company commercializes directly to its customers

These assets are initially recognized at their fair value (which is equivalent to their face value, discounting implicit interest for installment sales) and subsequently at amortized cost according to the effective interest rate method less a provision for impairment loss. An allowance for impairment loss is established for trade receivables when there is objective evidence that the Company will not be able to collect all the amounts which are owed to it according to the original terms of receivables.

Implicit interest in installment sales is recognized as interest income when interest is accrued over the term of the operation.

3.3

Investments recognized using the equity method

Interests in companies in which control is exercised together with another company (joint ventures) or in which the Company has significant influence (associated companies) are recorded using the equity method. Significant influence is assumed to exist when the Company has interest exceeding 20% of the investee's equity.

Under this method, the investment is recognized in the consolidated classified statement of financial position at cost plus changes subsequent to the acquisition in an amount proportional to the net associated company’s equity using the ownership interest in the associate. The associated goodwill is included at the carrying value of the investee, and it is not subject to amortization. The debit or credit to profit or loss reflects the proportional amount in the associated companies’ results for the reporting period.

Unrealized profit on transactions with associates and subsidiaries are eliminated in consolidation of the ownership percentage that the Company has on these entities. Unrealized losses are also eliminated unless the transaction provided evidence of loss from impairment of the assets transferred.

Changes in equity of the associates are recognized proportionally with a debit or credit to “Other reserves” and classified according to their origin.

Notes to the consolidated financial statements as of June 30, 2012

Note 3 – Significant accounting policies (continued)

3.3

Investments recognized using the equity method, continued

The associated companies and the Company’s reporting dates and policies are similar for equivalent transactions and events under similar circumstances.

In the event that significant influence is lost or the investment is sold or is available-for-sale, the equity value method is discontinued, suspending the recognition of proportional income.

If the resulting amount according to the equity method is negative, the Company’s equity interest is reduced to zero in the consolidated classified statement of financial position unless the Company has a contractual commitment to resolve the equity position. In this case, the respective provision for risks and expenses is recorded.

Dividends received in these companies are recorded by reducing the equity value and proportional profit or loss recognized in conformity with their interest, and are included in the consolidated statement of income under the caption “Equity in income (losses) of associates and joint ventures accounted for using the equity method”.

3.4

Property, plant and equipment

Tangible property, plant and equipment assets are stated at acquisition cost, net of the related accumulated depreciation, amortization and impairment losses that they might have experienced.

In addition to the price paid for the acquisition of tangible property, plant and equipment, the Company has considered the following concepts as part of the acquisition cost, as applicable:

1. Accrued interest expenses during the construction period which are directly attributable to the acquisition, construction or production of qualifying assets, which are those that require a substantial period prior to being ready for use. The interest rate used is that related to the project’s specific financing or, should this not exist, the average financing rate of the investor company. The amount capitalized for this concept is ThUS$7,077 as of June 30, 2012 and ThUS$22,249 as of December 31, 2011.

Notes to the consolidated financial statements as of June 30, 2012

Note 3 – Significant accounting policies (continued)

3.4

Property, plant and equipment, continued

2. The future costs that the Company will have to experience related to the closure of its facilities at the end of their useful life are included at the present value of disbursements expected to be required to settle the obligation.

Construction-in-progress is transferred to property, plant and equipment in operation once the assets are available for use and the related depreciation and amortization begins on that date.

Extension, modernization or improvement costs that represent an increase in productivity, ability or efficiency or an extension of the useful lives of property, plant and equipment are capitalized as a higher cost of the related assets. All the remaining maintenance, preservation and repair expenses are charged to expense as incurred.

Property, plant and equipment, net in the case of their residual values are depreciated using thee straight-line method over its estimated useful lives. When portions of a property, plant and equipment item have different useful lives, these portions are recorded as separate items. The useful life is reviewed annually, and revised if necessary.

The useful lives used for the depreciation and amortization of assets included in property, plant and equipment are presented below.

The replacement of full assets which increase the asset’s useful life or its economic capacity, are recorded as a higher value of property, plant and equipment with the related derecognition of replaced or renewed elements.

Based on the impairment analysis conducted by the Company’s management it has been considered that the carrying value of assets does not exceed the net recoverable value of such assets.

Property, plant and equipment, net in the case of their residual values are depreciated using thee straight-line method over its estimated useful lives, which constitute the period in which the Company expects to use them.. When portions of a property, plant and equipment item have different useful lives, these portions are recorded as separate items. The useful life is reviewed regularly (annually).

Notes to the consolidated financial statements as of June 30, 2012

Note 3 – Significant accounting policies (continued)

3.4

Property, plant and equipment, continued

The useful lives used for the depreciation and amortization of assets included in property, plant and equipment are presented below.

Types of property, plant and equipment	Life minimum		Life maximum

Buildings		3		60
Plant and equipment		3		35
Information technology equipment		3		10
Fixtures and fittings		3		35
Moto vehicles		5		10
Other property, plant and equipment		2		30

Gains or losses which are generated from the sale or disposal of property, plant and equipment are recognized as income (or loss) in the period and calculated as the difference between the asset’s sales value and its net carrying value.

The Company obtains property rights and mining concessions from the Chilean State Government. Property rights are usually obtained without any initial cost (other than the payment of mining licenses and minor registration expenses) and when rights are obtained on these concessions, the Company retains them while it pays the related annual license fees. Such license fees, which are paid annually, are recorded as prepaid expenses and amortized over the following twelve month period. Amounts attributable to mining concessions acquired from third parties, which are not from the Chilean State, are recorded at their acquisition cost in property, plant and equipment.

Costs derived from daily maintenance of property, plant and equipment are recognized when incurred.

3.5

Investment properties

The Company recognizes as investment properties the net values of land, buildings and other properties held which it intends to commercialize under lease agreements, or to obtain proceeds from their sale as a result of those increases generated in the future in the respective market prices. These assets are not used in the activities and are not destined for the Company’s own use.

Investment properties are initially stated at acquisition cost, which includes the acquisition price or production cost plus directly assignable expenses. Subsequently, investment properties are stated at their acquisition cost less accumulated depreciation, and the possible accrued provisions for value impairment.

Notes to the consolidated financial statements as of June 30, 2012

Note 3 – Significant accounting policies (continued)

3.6

Financial information by operating segment

IFRS 8 requires that companies adopt a “management approach” to disclose information on the operations generated by its operating segments. In general, this is the information that management uses internally for the evaluation of segment performance and making the decision on how to allocate resources for this purpose.

An operating segment is a group of assets and operations responsible for providing products or services subject to risks and performance different from those of other business segments. A geographical segment is responsible for providing products or services in a given economic environment subject to risks and performance different from those of other segments that operate in other economic environments.

For assets and liabilities the allocation to each segment is not possible given that these are associated with more than one segment, except for depreciation, amortization and impairment of assets, which are directly allocated to the applicable segments, in accordance with the criteria established in the costing process for product inventories.

The following operating segments have been identified by the Company:

Specialty plant nutrients

Industrial chemicals

Iodine and derivatives

Lithium and derivatives

Potassium

Other products and services

Notes to the consolidated financial statements as of June 30, 2012

Note 3 – Significant accounting policies (continued)

3.7

Revenue recognition

Revenue includes the fair value of considerations received or receivable for the sale of goods and services during performance of the Company's activities. Revenue is presented net of value added tax, estimated returns, rebates and discounts and after the elimination of sales among subsidiaries.

Revenue is recognized when its amount can be stated reliably, it is possible that the future economic rewards will flow to the entity and the specific conditions for each type of activity -related revenue are complied with, as follows:

(a)

Sale of goods

Sales of goods are recognized when the Company has delivered products to the customer, the customer has total discretion on the distribution channel and the price at which products are sold and there is no obligation pending compliance that could affect the acceptance of products by the customer. The delivery does not occur until products have been shipped to the customer or confirmed as received by customers when the related risks of obsolescence and loss have been transferred to the customer and the customer has accepted products in accordance with the conditions established in the sale, the acceptance period has ended or there is objective evidence that those criteria required for acceptance have been met.

Sales are recognized in consideration of the price set in the sales agreement, net of volume discounts and estimated returns at the date of the sale. Volume discounts are evaluated in consideration of annual foreseen purchases and in accordance with the criteria defined in agreements.

(b)

Sales of services

Revenue associated with the rendering of services is recognized considering the degree of completion of the service as of the date of presentation of the consolidated classified statement of financial position, provided that the result from the transaction can be estimated reliably.

Notes to the consolidated financial statements as of June 30, 2012

Note 3 – Significant accounting policies (continued)

3.7

Revenue recognition, continued

(c)

Interest income

Interest income is recognized when interest is accrued in consideration of the principal pending payment using the effective interest rate method.

(d)

Income from dividends

Income from dividends is recognized when the right to receive the payment is established.

3.8

Income tax and deferred taxes

Corporate income tax for the year is determined as the sum of current taxes from the different consolidated companies. Current taxes are based on the application of the various types of taxes attributable to taxable income for the year.

Differences between the book value of assets and liabilities and their tax basis generate the balance of deferred tax assets or liabilities, which are calculated using the tax rates expected to be applicable when the assets and liabilities are realized.

In conformity with current Chilean tax regulations, the provision for corporate income tax and taxes on mining activity is recognized on an accrual basis, presenting the net balances of accumulated monthly tax provisional payments for the fiscal period and associated credits. The balances of these accounts are presented in current income taxes recoverable or current taxes payable, as applicable.

Tax on companies and variations in deferred tax assets or liabilities that are not the result of business combinations are recorded in statement of income accounts or equity accounts in the consolidated classified statement of financial position, considering the origin of the gains or losses which have generated them.

Notes to the consolidated financial statements as of June 30, 2012

Note 3 – Significant accounting policies (continued)

3.8

Income tax and deferred taxes, continued

As of the date of these consolidated financial statements, the carrying value of deferred tax assets has been reviewed and reduced to the extent there will not be sufficient taxable income to allow the recovery of all or a portion of the deferred tax assets. Likewise, as of the date of the consolidated financial statements, deferred tax assets that are not recognized were evaluated and not recognized as it was not more likely than not that future taxable income will allow for recovery of the deferred tax asset.

With respect to deductible temporary differences associated with investments in subsidiaries, associated companies and interest in joint ventures, deferred tax assets are recognized solely provided that it is more likely than not that the temporary differences will be reversed in the near future and that there will be taxable income with which they may be used.

The deferred income tax related to entries directly recognized in equity is recognized with an effect on equity and not with an effect on profit or loss.

Deferred tax assets and liabilities are offset if there is a legally receivable right of offsetting tax assets against tax liabilities and the deferred tax is related to the same tax entity and authority.

3.9

Earnings per share

The basic earnings per share amounts are calculated by dividing profit for the year attributable to ordinary owners of the parent by the weighted average number of ordinary shares outstanding during the year.

The Company has not conducted any type of operation of potential dilutive effect that assumes diluted earnings per share other than the basic earnings per share.

Notes to the consolidated financial statements as of June 30, 2012

Note 3 – Significant accounting policies (continued)

3.10

Impairment of non-financial assets

Assets subject to depreciation and amortization are subject to impairment testing, provided that an event or change in the circumstances indicates that the amounts in the accounting records may not be recoverable. An impairment loss is recognized for the excess of the book value of the asset over its recoverable amount.

The recoverable amount of an asset is the higher between the fair value of an asset or cash generating unit (“CGU”) less costs of sales and its value in use, and is determined for an individual asset unless the asset does not generate any cash inflows that are clearly independent from other assets or groups of assets.

When the carrying value of an asset exceeds its recoverable amount, the asset is considered an impaired asset and is reduced to its net recoverable amount.

In evaluating value in use, estimated future cash flows are discounted using a discount rate before taxes which reflects current market evaluation on the time value of money and specific asset risks.

An appropriate valuation model is used to determine the fair value less selling costs. These calculations are confirmed by valuation multiples, quoted share prices for subsidiaries quoted publicly or other available fair value indicators.

Impairment losses from continuing operations are recognized with a debit to profit or loss in the categories of expenses associated with the impaired asset function, except for properties reevaluated previously where the revaluation was taken to equity. In this case impairment is also recognized with a debit to equity up to the amount of any previous revaluation.

As of June 30, 2012 and December 31, 2011, the Company is unaware of any indication of impairment with regard to its assets.

Notes to the consolidated financial statements as of June 30, 2012

Note 3 – Significant accounting policies (continued)

3.10

Impairment of non-financial assets, continued

For assets other than acquired goodwill, an annual evaluation is conducted of whether there is impairment loss indicators recognized previously that might have already ceased to exist or decreased. The recoverable amount is estimated if such indicators exist. An impairment loss previously recognized is reversed only if there have been changes in estimates used to determine the asset’s recoverable amount from the last time in which an impairment loss was recognized. If this is the case, the carrying value of the asset is increased to its recoverable amount. This increased amount cannot exceed the carrying value that would have been determined net of depreciation if an asset impairment loss would have not been recognized in prior years. This reversal is recognized with a credit to profit or loss unless an asset is recorded at the revalued amount. Should this be the case, the reversal is treated as an increase in revaluation

3.11

Financial assets

The Company classifies its financial assets under the following categories: at fair value through profit or loss, loans and trade receivables, financial assets held-to-maturity and financial assets available-for-sale. The classification depends on the purpose for which financial assets were acquired. Management determines the classification of its financial assets at the time of initial recognition.

The Company assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of assets is deemed to be impaired if and only if there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset or group of assets (an incurred “loss event”) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets.

(a)

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if it is acquired mainly for the purpose of being sold in the short-term. Derivatives are also classified as acquired for trading unless they are designated as hedge accounts. Assets under this category are classified as current assets and variations generated in fair value are directly recognized in profit or loss.

Notes to the consolidated financial statements as of June 30, 2012

Note 3 – Significant accounting policies (continued)

3.11

Financial assets, continued

(b)

Loans and trade receivables

Loans and trade receivables are non-derivative financial assets with fixed o determinable payments not quoted in any active market. These are included in current assets, except for those with maturities exceeding 12 months from the closing date, which are classified as non-current assets. Loans and trade receivables are included under the caption “Trade and other receivables” in the consolidated classified statement of financial position and are stated at amortized cost. The subsequent measurement at amortized cost is calculated using the effective interest rate method less impairment.

(c)

Financial assets held-to-maturity

Financial assets held-to-maturity are non-derivative financial assets with fixed or determinable payments and fixed maturities which management has the positive intention and ability of holding to maturity. If a significant amount of financial assets held to maturity were to be sold, the full category would be reclassified as available for sale. Assets in this category are stated at amortized cost.

(d)

Financial assets available for sale

Financial assets available for sale are non-derivative instruments that have been designated in this category or are not classified in any of the other categories. They are included in non-current assets unless the Company intends to dispose of the investment in the 12 months following the closing date. These assets are stated at fair value, recognizing in other comprehensive income those variations in fair value, if any.

3.12

Financial liabilities

The Company classifies its financial liabilities under the following categories: at fair value through profit or loss, trade payables, interest-bearing loans or derivatives designated as hedging instruments.

The Company’s management determines the classification of its financial liabilities at the time of initial recognition.

Financial debt obligations are recorded at face value and as non-current when maturity is over twelve months and as current when maturity is less than twelve months. Interest expenses are recorded the year in which they are accrued under a financial approach.

Notes to the consolidated financial statements as of June 30, 2012

Note 3 – Significant accounting policies (continued)

3.12

Financial liabilities, continued

In accordance with IAS 32 and 39, debt-related expenses are accounted for in the accompanying consolidated classified statements of financial position, deducting the associated debt and are imputed to the results of the year within the life of the debt using the effective interest rate method.

Financial liabilities are derecognized when the obligation is repaid, settled or it expires.

(a)

Financial liabilities at fair value through profit or loss

Financial liabilities are classified at fair value when these are held for trading or designated in their initial recognition at fair value through profit or loss. This category includes derivative instruments not designated for hedge accounting.

(b)

Trade payables

Trade payables to suppliers are subsequently stated at their amortized cost using the effective interest rate method.

(c)

Interest-bearing loans

Loans are subsequently stated at amortized cost using the effective interest rate method. Amortized cost is calculated considering any premium or discount from the acquisition and includes costs of transactions which are an integral part of the effective interest rate.

Notes to the consolidated financial statements as of June 30, 2012

Note 3 – Significant accounting policies (continued)

3.13

The environment

In general, the Company follows the criteria of considering amounts used in environmental protection and improvement as environmental expenses. However, the cost of facilities, machinery and equipment used for the same purpose are considered property, plant and equipment

3.14

Minimum dividend

According to the Corporations Act, a publicly traded corporation must pay dividends according to the policy decided at the General Shareholders' Meeting of each year, with a minimum of 30% of the net income of the year if the corporation does not have unabsorbed accumulated deficit from prior years, unless it is otherwise decided with the unanimous vote of the issued and subscribed shares.

3.15

Consolidated statements of cash flows

Cash equivalents relate to short-term, highly liquid investments that are readily convertible into known amounts of cash and are subject to low risk of change in value, and expire in less than three months from the date of acquisition of the instrument

For the purposes of the consolidated statements of cash flows, cash and cash equivalents comprise the balance of cash and cash equivalents as defined previously.

The statement of cash flows includes cash movements performed during the year, determined using the indirect method.

3.16

Obligations related to employee termination benefits and pension commitments

Obligations with the Company’s employees are in accordance with that established in the collective bargaining agreements in force formalized through collective employment agreements and individual employment contracts. In the case of the United States employees, certain obligations are in accordance with the related pension plan, valid until the year 2002.

These obligations are valued using actuarial calculations, which consider such assumptions as the mortality rate, employee turnover, interest rates, retirement dates, effects related to increases in employees’ salaries, as well as the effects on variations in services derived from variations in the inflation rate.

Notes to the consolidated financial statements as of June 30, 2012

Note 3 – Significant accounting policies (continued)

3.16

Obligations related to employee termination benefits and pension commitments, continued

Actuarial losses and gains that may be generated by variations in previously defined obligations are directly recorded in profit or loss for the year.

Actuarial losses and gains have their origin in deviations between the estimate and the actual behavior of actuarial assumptions or in the reformulation of established actuarial assumptions.

The discount rate used by the Company for calculating the obligation was 6% for the periods ended June 30, 2012 and December 31, 2011.

The Company’s subsidiary SQM North America has established pension plans for its retired employees that are calculated by measuring the projected obligation using a net salary progressive rate net of adjustments for inflation, mortality and turnover assumptions, deducting the resulting amounts at present value using a 6.5% interest rate, for 2012 and 2011. The net balance of this obligation is presented under the non-current provisions for employee benefits.

Notes to the consolidated financial statements as of June 30, 2012

Note 3 – Significant accounting policies (continued)

3.17

Financial derivatives and hedge transactions

Derivatives are recognized initially at fair value as of the date in which the derivatives contract is signed and subsequently they are valued at fair value. The method for recognizing the resulting loss or gain depends on whether the derivative has been designated as an accounting hedge instrument and if so, it depends on the type of hedging, which may be as follows:

(a)

Fair value hedge of assets and liabilities recognized (fair value hedges);

(b)

Hedging of a single risk associated with an asset or liability recognized or a highly possible foreseen transaction (cash flow hedge);

At the beginning of the transaction, the Company documents the relationship existing between hedging instruments and those entries hedged, as well as their objectives for risk management purposes and the strategy to conduct different hedging operations.

The Company also documents its evaluation both at the beginning and the end of each period of whether derivatives used in hedging transactions are highly effective to offset changes in the fair value or in cash flows of hedged entries.

The fair value of derivative instruments used for hedging purposes is shown in Note 10.3. (Hedge assets) Movements in the cash flow hedge reserve are classified as a non-current asset or liability if the remaining expiration period of the hedged item is higher than 12 months and as a current asset or liability if the remaining expiration period of the entry is lower than 12 months.

Investing derivatives are classified as a current asset or liability, and the change in their fair value is recognized directly in profit or loss.

(a)

Fair value hedge

The change in the fair value of a derivative is recognized with a debit or credit to profit or loss, as applicable. The change in the fair value of the hedged entry attributable to hedged risk is recognized as part of the carrying value of the hedged entry and is also recognized with a debit or credit to profit or loss.

Notes to the consolidated financial statements as of June 30, 2012

Note 3 – Significant accounting policies (continued)

3.17

Financial derivatives and hedge transactions, continued

For fair value hedging related to items recorded at amortized cost, the adjustment of the fair value is amortized against profit or loss during the period through maturity. Any adjustment to the carrying value of a hedged financial instrument for which the effective rate is used is amortized with a debit or credit to profit or loss at its fair value attributable to the risk being covered.

If the hedged entry is derecognized, the fair value not amortized is immediately recognized with a debit or credit to profit or loss.

(b)

Cash flow hedges

The effective portion of gains or losses from the hedge instrument is initially recognized with a debit or credit to other reserves, whereas any ineffective portion is immediately recognized with a debit or credit to profit or loss, as applicable.

Amounts taken to equity are transferred to profit or loss when the hedged transaction affects profit or loss, as when the hedged interest income or expense is recognized when a forecasted sale occurs. When the hedged entry is the cost of a non-financial asset or liability, amounts taken to other reserves are transferred to the initial carrying value of the non-financial asset or liability.

Should the expected firm transaction or commitment no longer be expected to occur, the amounts previously recognized in equity are transferred to profit or loss. If a hedge instrument expires, is sold, finished, and exercised without any replacement, or if a rollover is performed or if its designation as hedging is revoked, the amounts previously recognized in other reserves are maintained in equity until the expected firm transaction or commitment occurs.

Notes to the consolidated financial statements as of June 30, 2012

Note 3 – Significant accounting policies (continued)

3.18

Leases

(a)

Lease – Finance lease

Leases are classified as finance leases when the Company holds substantially all the risks and rewards derived from the ownership. Finance leases are capitalized at the beginning of the lease at the lower of the fair value of the leased asset or the present value of minimum lease payments.

Each lease payment is distributed between the liability and the interest expenses to obtain ongoing interest on the pending balance of the debt. The respective lease obligations, net of interest expense, are included in other non-current liabilities. The interest element of finance cost is debited in the consolidated statement of income during the lease period so that a regular ongoing interest rate is obtained on the remaining balance of the liability for each year. The asset acquired through a finance lease is subject to depreciation over the lower of its useful life or the life of the agreement.

(b)

Lease – Operating lease

Leases in which the lessor maintains a significant part of the risks and rewards derived from the ownership are classified as operating leases. Operating lease payments (net of any incentive received from the lessor) are debited to the statement of income or capitalized (as applicable) on a straight-line basis over the lease period.

Notes to the consolidated financial statements as of June 30, 2012

Note 3 – Significant accounting policies (continued)

3.19

Prospecting expenses

Those prospecting expenses associated with mineral reserves being exploited are included under Inventory and amortized according to the estimated mineral content reserves. Prospecting expenses associated with future mineral reserves are presented under other non-financial assets as and when minerals included in the future reserve have caliche ore-grade, which makes the mining property economically commercializable.

Those expenses incurred on mining properties in which the product has a low caliche ore-grade that is not economically commercializable, are directly charged to profit or loss.

3.20

Other provisions

Provisions are recognized when:

•

The Company has a present obligation as the result of a past event.

•

It is more likely than not that certain resources must be used, including benefits, to settle the obligation.

•

A reliable estimate can be made of the amount of the obligation.

In the event that the provision or a portion of it is reimbursed, the reimbursement is recognized as a separate asset solely if there is certainty of income.

In the consolidated statement of income, the expense for any provision is presented net of any reimbursement.

Should the effect of the time value of money be significant, provisions are discounted using a discount rate before taxes that reflects the liability’s specific risks. When a discount rate is used, the increase in the provision over time is recognized as a finance cost.

The Company’s policy is maintaining provisions to cover risks and expenses based on a better estimate to deal with possible or certain and quantifiable responsibilities from current litigation, compensations or obligations, pending expenses for which the amount has not yet been determined, collaterals and other similar guarantees for which the Company is responsible. These are recorded at the time the responsibility or the obligation that determines the compensation or payment is generated.

The Company determines and recognizes the cost related to employee vacation on an accrual basis.

Notes to the consolidated financial statements as of June 30, 2012

Note 3 – Significant accounting policies (continued)

3.21

Compensation plans

Compensation plans implemented through benefits in share-based payments settled in cash, which have been provided, are recognized in the financial statements at their fair value, in accordance with International Financial Reporting Standard No. 2 “Share-based payments”. Variations in the fair value of options granted are recognized with a charge to payroll on a straight-line basis during the period between the date on which these options are granted and the payment date. (See Note No.16).

3.22

Good and service insurance expenses

Payments for the different insurance policies which the Company contracts are recognized in expenses considering the proportional amount related to the time that they cover, regardless of payment terms. Amounts paid and not consumed are recognized as prepayments within current assets.

Costs of claims are recognized in profit or loss immediately after they become known, net of recoverable amounts from insurance companies. Recoverable amounts are recorded as a reimbursable asset from the insurance company under “Trade and other receivables", calculated as established in the respective insurance policies.

3.23

Intangible assets

Intangible assets mainly relate to goodwill acquired, water rights, trademarks, and rights of way related to electric lines, development expenses, and computer software licenses.

(a)

Goodwill acquired

Goodwill acquired represents the excess in acquisition cost on the fair value of the Company's ownership of the net identifiable assets of the subsidiary on the acquisition date. Goodwill acquired related to acquisitions of subsidiaries is included in goodwill, which is subject to impairment tests every time consolidated financial statements are issued and is stated at cost less accumulated impairment losses. Gains and losses related to the sale of an entity include the carrying value of goodwill related to the entity sold.

Notes to the consolidated financial statements as of June 30, 2012

Note 3 – Significant accounting policies (continued)

3.23

Intangible assets, continued

This intangible asset is assigned to cash-generating units with the purpose of testing impairment losses. It is allocated based on cash-generating units expected to obtain benefits from the business combination from which the aforementioned goodwill acquired arose.

(b)

Water rights

Water rights acquired by the Company relate to water from natural sources and are recorded at acquisition cost. Given that these assets represent rights granted on a perpetual basis to the Company, these are not amortized. However, they are subject to an impairment assessment on an annual basis.

(c)

Right of way for electric lines

As required for the operation of industrial plants, the Company has paid rights of way in order to install wires for the different electric lines in third party land. These rights are presented under Intangible assets. Amounts paid are capitalized at the date of the agreement and charged to income according to the life of the right of way.

(d)

Computer software

Licenses for IT programs acquired are capitalized based on costs that have been incurred to acquire them and prepare them to use the specific program. These costs are amortized over their estimated useful lives.

Expenses related to the development or maintenance of IT programs are recognized as an expense as and when incurred. Costs directly related to the production of unique and identifiable IT programs controlled by the Group and which probably will generate economic benefits that are higher than costs during more than a year, are recognized as intangible assets. Direct costs include expenses incurred for employees who develop IT programs and an adequate percentage of general expenses.

The costs of development for IT programs recognized as assets are amortized over their estimated useful lives.

No impairment of intangible assets exists as of June 30, 2012 and December 31, 2011

Notes to the consolidated financial statements as of June 30, 2012

Note 3 – Significant accounting policies (continued)

3.24

Research and development expenses

Research and development expenses are expensed in the period in which the disbursement is made, with the exception of property, plant and equipment acquired for use in research and development, which are recognized in the accounting under the respective item within property, plant and equipment.

3.25

Classification of balances as current and non-current

In the attached statement of financial position, balances are classified in consideration of their remaining recovery (maturity) dates; i.e., those maturing on a date equal to or lower than twelve months are classified as current and those with maturity dates exceeding the aforementioned period are classified as non-current.

The exception to the foregoing relates to deferred taxes, which are classified as non-current, regardless of the anticipated recovery date.

Notes to the consolidated financial statements as of June 30, 2012

Note 4 – Financial risk management

4.1 Risk management policy

The Risk Management Policy of the Company is oriented towards safeguarding the stability and sustainability of Sociedad Química y Minera de Chile S.A. and Subsidiaries in relation to all such relevant financial uncertainty components.

The operations of the Company are subject to certain risk factors that may affect the financial position or results of the same. Among these risks, the most relevant are market risk, liquidity risk, currency risk, bad debt risk, and interest rate risk.

There may be additional risks that might also affect the commercial operations, the business, the financial position or the results of the Company, but at this time they are not significant.

The financial risk management structure includes identifying, determining, analyzing, quantifying, measuring and controlling these events. The Management, in particular the Finance Management, is responsible for constantly assessing the financial risk. The Company uses derivatives to cover a significant portion of these risks.

Notes to the consolidated financial statements as of June 30, 2012

Note 4 – Financial risk management (continued)

4.2 Risk factors

4.2.1 Market risk

Market risks are those uncertainties associated with fluctuations in market variables that affect the assets and liabilities of the Company, such as:

Country risk: The economic position of the countries where the Company has a presence may affect its financial position. For example, the sales carried out in emerging markets expose SQM to risks related to economic conditions and trends in those countries. On the other hand, inventories may also be affected by the economic situation of these countries and/ or the global economy, amongst other probable economic impacts.

Price volatility risk: The prices of the products of the Company are affected by the fluctuations of international prices of fertilizers and chemical products and changes in productive capacities or market demand, all of which might affect the Company’s business, financial condition and operational results.

Commodity Price risk: The Company is exposed to changes in the prices of raw materials and energy which may have an impact on its production costs, thus giving rise to instability in the results.

At present, the Company has a direct annual expense close to US$110 million on account of petrol, gas and equivalents and close to US$ 60 million on account of electricity. Variations of 10% in the prices of energy the Company required to operate, may involve in the short-term movements in costs of approximately US$17 million.

4.2.2 Doubtful accounts risk

A contraction of the global economy and the potentially negative effects in the financial position of our clients may extend the receivables collection time for SQM, increasing the bad debt exposure. While measures have been taken in order to minimize risk, the global economy may trigger losses that might have a material adverse effect on the business, financial position or the results of the Company’s operations.

As a way to mitigate these risks, SQM actively controls debt collection and uses measures such as, loan insurance, letters of credit, and prepayments with regard to some receivables.

Notes to the consolidated financial statements as of June 30, 2012

Note 4 – Financial risk management (continued)

4.2.3

Currency risk

As a result of the influence in the price determination, of its relationship with sales costs and since a significant part of the business of the Company is carried out in that foreign currency, the functional currency of SQM is the United States dollar. However, the global business activities of the Company expose the same to the foreign exchange fluctuations of several currencies with respect to the US dollar. Therefore, SQM has hedge contracts to ensure its main mismatches (assets net of liabilities) in currencies other than the US dollar against the foreign exchange fluctuation. Those contracts are periodically up-dated depending upon the mismatch amount to be covered in these currencies. Occasionally and subject to the Board of Directors’ approval, the Company insures cash flows from certain specific items in currency other tan U.S. dollar at short-term.

A significant portion of the costs of the Company, particularly payroll, is related to the Chilean peso. Therefore, an increase or decrease in the exchange rate against the dollar would affect the net income of SQM. Approximately US$ 400 million cost of the Company are related to the Chilean peso. The effect of such obligations in the consolidated condensed statements of financial position is covered by operations of derivative instruments that hedge the mismatch of balance in this currency.

As of December 31, 2011, the Company had derivative instruments classified as hedging currency and interest rate associated with all the obligations denominated bonds both in Chilean pesos and UF, with a fair value of US$ 56.1 million. As of June 2012, this value amounts to US$ 74.4 million, both for SQM.

As of June 30, 2012, the Chilean peso to US dollar Exchange rate was Ch$ 501.84 per US$ 1.00, and as of December 31, 2011 it was Ch$ 519.20 per US$ 1.00.

Notes to the consolidated financial statements as of June 30, 2012

Note 4 – Financial risk management (continued)

4.2.4

Interest rate risk

Interest rate fluctuations, due to the uncertain future behavior of markets, may have a material impact on the financial results of the Company.

The Company has short and long-term debts valued at LIBOR plus a spread. The Company is partially exposed to fluctuations of said rate, as SQM currently holds hedging derivative instruments to hedge a portion of its liabilities subject to the LIBOR rate fluctuations.

As of June 30, 2012, approximately 24% of the Company’s financial obligations are valued at LIBOR, therefore significant increases in the rate may impact its financial position. A 100 point variation in this rate may trigger variations in the financial expenses close to US$ 3.5 million. Notwithstanding, this effect is significantly counterbalanced by the returns of the Company’s investments that also relate to LIBOR.

In addition, as of June 30, 2012, the Company's financial debt is mainly in the long-term, with 11% with maturities under 12 months which decreases the exposure to changes in the interest rates.

Notes to the consolidated financial statements as of June 30, 2012

Note 4 – Financial risk management (continued)

4.2.5

Liquidity risk

Liquidity risk is related to the fund requirements to comply with payment obligations. The object of the Company is to keep financial flexibility by comfortably balancing the fund requirements and the flows from the regular business conduct, bank loans, public bonds, short term investments, and negotiable instruments, amongst other.

The company has an important capital expense program which is subject to change over time.

On the other hand, world financial markets go through contraction and expansion periods that are not foreseeable in the long-term and may affect SQM’s access to financial resources. These factors may have a material adverse impact on the business, financial position, and operational results of the Company.

SQM constantly monitors that its obligations and investments match, taking care as part of its financial risk management strategy of the obligations and investments maturities from a conservative perspective. As of June 30, 2012, the Company had non-committed and available bank credit lines for a total of approximately US$ 657 million, in addition to committed bank lines for US$ 40 million, available in case additional resources are needed.

The position in other cash and cash equivalents so generated by the Company is invested in highly liquid mutual funds which have an AAA risk rating.

4.3

Risk measurement

The Company has methods to measure the effectiveness and efficiency of risk strategies, both prospectively and retrospectively. Those methods are consistent with the risk management profile of the Group.

Notes to the consolidated financial statements as of June 30, 2012

Note 5 – Changes in accounting estimates and policies (consistent presentation)

5.1

Changes in accounting estimates

There are no changes in accounting estimates as of the closing date of the consolidated financial statements..

5.2

Changes in accounting policies

As of June 30, 2012, the Company’s consolidated financial statements present no changes in accounting policies or estimates compared to the prior period.

The consolidated classified statements of financial position as of June 30, 2012 and December 31, 2011 and the statements of comprehensive income, equity and cash flows for the periods ended June 30, 2012 and June 30, 2011, have been prepared in accordance with IFRS, and accounting principles and criteria have been applied consistently.

Notes to the consolidated financial statements as of June 30, 2012

Note 6 – Background of consolidated companies

6.1 Parent’s separate assets and liabilities

	06/30/2012			12/31/2011
	ThUS$			ThUS$

Assets		4,206,362			3,626,748
Liabilities		(2,052,250	)		(1,813,914	)
Assets (liabilities)		2,154,112			1,812,834

6.2

Controlling entity

As provided in the Company’s by-laws, no shareholder can concentrate more than 32% of the Company’s voting right shares and therefore there is no controlling entity.

6.3

Joint arrangements of the controlling interest

Sociedad de Inversiones Pampa Calichera S.A., Potasios de Chile S.A. and Global Mining Investments (Chile) S.A. together, the Pampa Group, are the owners of a number of shares equivalent to 31.32% as of June 30, 2012 of all the shares currently issued, subscribed and fully-paid shares of SQM S.A. On the other hand, Kowa Company Ltd., Inversiones La Esperanza (Chile) Limitada, Kochi S.A. and La Esperanza Delaware Corporation together the Kowa Group, are the owners of a number of shares equivalent to 2.08% of all the shares currently issued, subscribed and fully-paid of SQM S.A.

The Pampa Group as well as the Kowa Group have informed SQM S.A., the Chilean Superintendence of Securities and Insurance, the relevant stock markets in Chile and abroad that they are not and have never been related parties among themselves. This despite the fact that both “Groups” entered into a Joint Venture Agreement (JVA) on December 21, 2006 in regard to these shares. Consequently, Pampa Group, for itself, does not concentrate more than 32% of the voting right shares of SQM S.A. and nor does the Kowa Group concentrate more than 32% of the voting right shares of SQM S.A.

Likewise, the Joint Venture Agreement has not transformed the Pampa Group and Kowa Group into related parties among themselves. The JVA has transformed the Pampa Group and Kowa Group, as controlling interest holders of SQM S.A., into parties related to SQM S.A.

Notes to the consolidated financial statements as of June 30, 2012

Note 6 – Background of consolidated companies (continued)

6.3

Joint arrangements of the controlling interest, continued

Detail of effective concentration

Tax ID Number	Name	Ownership interest %
96.511.530-7	Sociedad de Inversiones Pampa Calichera S.A.		21.01
96.863.960-9	Global Mining Investments (Chile) S.A.		3.34
76.165.311-5	Potasios de Chile S.A.		6.97
Total Pampa Group			31.32

79.798.650-k	Inversiones la Esperanza (Chile) Ltda.		1.40
59.046.730-8	Kowa Co Ltd.		0.30
96.518.570-4	Kochi S.A.		0.29
59.023.690-k	La Esperanza Delaware Corporation		0.09
Total Kowa Group			2.08

Notes to the consolidated financial statements as of June 30, 2012

Note 6 – Background of consolidated companies (continued)

6.4 Information on consolidated subsidiaries

Financial information as of June 30, 2012 of the companies in which the group exerts control and significant influence is as follows:

06/30/2012
																Net profit
		Country of	Functional	Ownership interest						Assets		Liabilities		Total equity		(loss)
Subsidiary	Tax ID No.	incorporation	currency	Direct		Indirect		Total		ThUS$		ThUS$		ThUS$		ThUS$
SQM Nitratos S.A.	96.592.190-7	Chile	US$		99.9999		0.0001		100.0000		1,068,481		834,015		234,466		80,557
Proinsa Ltda.	78.053.910-0	Chile	Chilean peso		-		60.5800		60.5800		211		-		211		-
SQMC Internacional Ltda.	86.630.200-6	Chile	Chilean peso		-		60.6381		60.6381		279		-		279		2
SQM Potasio S.A.	96.651.060-9	Chile	US$		99.9974		-		99.9974		896,788		126,438		770,350		120,147
Serv. Integrales de Tránsito y Transf. S.A.	79.770.780-5	Chile	US$		0.0003		99.9997		100.0000		312,976		284,673		28,303		1,565
Isapre Norte Grande Ltda.	79.906.120-1	Chile	Chilean peso		1.0000		99.0000		100.0000		1,252		822		430		6
Ajay SQM Chile S.A.	96.592.180-K	Chile	US$		51.0000		-		51.0000		25,344		5,589		19,755		6,233
Almacenes y Depósitos Ltda.	79.876.080-7	Chile	Chilean peso		1.0000		99.0000		100.0000		433		1		432		(6	)
SQM Salar S.A.	79.626.800-K	Chile	US$		18.1800		81.8200		100.0000		1,541,389		566,358		975,031		146,847
SQM Industrial S.A.	79.947.100-0	Chile	US$		99.0470		0.9530		100.0000		2,247,313		1,398,371		848,942		24.983
Minera Nueva Victoria Ltda.	78.602.530-3	Chile	US$		99.000		1.0000		100.0000		114,566		4,636		109,930		1,830
Exploraciones Mineras S.A.	76.425.380-9	Chile	US$		0.2691		99.7309		100.0000		31,924		4,235		27,689		(108	)
Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A.	76.534.490-5	Chile	Chilean peso		-		100.0000		100.0000		840		756		84		(28	)
Soquimich Comercial S.A.	79.768.170-9	Chile	US$		-		60.6383		60.6383		217,157		107,584		109,573		925
Comercial Agrorama Ltda.	76.064.419-6	Chile	Chilean peso		-		42.4468		42.4468		11,064		9,847		1,217		(119	)
Comercial Hydro S.A.	96.801.610-5	Chile	Chilean peso		-		60.6383		60.6383		7,774		128		7,646		206
Agrorama S.A.	76.145.229-0	Chile	Chilean peso		-		60.6377		60.6377		11,012		10,764		248		143
SQM North America Corp.	Foreign	United States	US$		40.0000		60.0000		100.0000		225,196		203,074		22,122		10,336

Notes to the consolidated financial statements as of June 30, 2012

Note 6 – Background of consolidated companies (continued)

6.4 Information on consolidated subsidiaries, continued

06/30/2012
																	Net profit
		Country of	Functional	Ownership interest						Assets		Liabilities		Total equity			(loss)
Subsidiary	Tax ID No.	incorporation	currency	Direct		Indirect		Total		ThUS$		ThUS$		ThUS$			ThUS$
RS Agro Chemical Trading A.V.V.	Foreign	Aruba	US$		98.3333		1.6667		100.0000		5,215		-		5,215			(8	)
Nitratos Naturais do Chile Ltda.	Foreign	Brazil	US$		-		100.0000		100.0000		2,330		6,613		(4,283	)		149
Nitrate Corporation of Chile Ltd.	Foreign	United Kingdom	US$		-		100.0000		100.0000		5,076		-		5,076			-
SQM Corporation N.V.	Foreign	Dutch Antilles	US$		0.0002		99.9998		100.0000		87,936		3,721		84,215			(2,220	)
SQM Perú S.A.	Foreign	Peru	US$		0.9800		99.0200		100.0000		1,850		2,123		(273	)		(128	)
SQM Ecuador S.A.	Foreign	Ecuador	US$		0.0040		99.9960		100.0000		9,393		8,915		478			(69	)
SQM Brasil Ltda.	Foreign	Brazil	US$		2.7900		97.2100		100.0000		412		1,045		(633	)		64
SQI Corporation N.V.	Foreign	Dutch Antilles	US$		0.0159		99.9841		100.0000		17		41		(24	)		(5	)
SQMC Holding Corporation L.L.P.	Foreign	Aruba	US$		0.1000		99.9000		100.0000		24,078		2,115		21,963			1,445
SQM Japan Co. Ltd.	Foreign	Japan	US$		1.0000		99.0000		100.0000		2,510		675		1,835			(55	)
SQM Europe N.V.	Foreign	Belgium	US$		0.8600		99.1400		100.0000		395,876		368,347		27,529			(10,196	)
SQM Italia SRL	Foreign	Italy	US$		-		100.0000		100.0000		1,298		17		1,281			-
SQM Indonesia S.A.	Foreign	Indonesia	US$		-		80.0000		80.0000		5		1		4			-
North American Trading Company	Foreign	United States	US$		-		100.0000		100.0000		306		39		267			-
SQM Virginia LLC	Foreign	United States	US$		-		100.0000		100.0000		29,206		14,830		14,376			-
SQM Comercial de México S.A. de C.V.	Foreign	Mexico	US$		0.0013		99.9987		100.0000		68,835		47,143		21,692			1,526

Notes to the consolidated financial statements as of June 30, 2012

Note 6 – Background of consolidated companies (continued)

6.4 Information on consolidated subsidiaries, continued

06/30/2012
																	Net profit
		Country of	Functional	Ownership interest						Assets		Liabilities		Total equity			(loss)
Subsidiary	Tax ID No.	incorporation	currency	Direct		Indirect		Total		ThUS$		ThUS$		ThUS$			ThUS$
SQM investment Corporation N.V.	Foreign	Dutch Antilles	US$		1.0000		99.0000		100.0000		65,710		39,539		26,171			2,890
Royal Seed Trading Corporation A.V.V.	Foreign	Aruba	US$		1.6700		98.3300		100.0000		193,290		203,601		(10,311	)		(2,500	)
SQM Lithium Specialties LLP	Foreign	United States	US$		-		100.0000		100.0000		15,786		1,265		14,521			-
Soquimich SRL Argentina	Foreign	Argentina	US$		-		100.0000		100.0000		429		165		264			(21	)
Comercial Caimán Internacional S.A.	Foreign	Panama	US$		-		100.0000		100.0000		373		1,139		(766	)		(11	)
SQM France S.A.	Foreign	France	US$		-		100.0000		100.0000		351		114		237			-
Administración y Servicios Santiago S.A. de C.V.	Foreign	Mexico	US$		-		100.0000		100.0000		74		900		(826	)		63
SQM Nitratos México S.A. de C.V.	Foreign	Mexico	US$		-		51.0000		51.0000		33		19		14			3
Soquimich European Holding B.V.	Foreign	The Netherlands	US$		-		100.0000		100.0000		148,136		70,483		77,653			(3,269	)
SQM Iberian S.A	Foreign	Spain	US$		-		100.0000		100.0000		94,161		90,509		3,652			1,970
Iodine Minera B.V.	Foreign	The Netherlands	US$		-		100.0000		100.0000		14,478		-		14,478			1,257
SQM Africa Pty Ltd.	Foreign	South Africa	US$		-		100.0000		100.0000		63,320		55,824		7,496			(2,182	)
SQM Oceania Pty Ltd.	Foreign	Australia	US$		-		100.0000		100.0000		4,927		1,382		3,545			359
SQM Agro India Pvt. Ltd.	Foreign	India	US$		-		100.0000		100.0000		28		6		22			(24	)
SQM Beijing Commercial Co. Ltd.	Foreign	China	US$		-		100.0000		100.0000		1,526		256		1,270			1,033

Total											7,950,964		4,478,118		3,472,846			383,590

Notes to the consolidated financial statements as of June 30, 2012

Note 6 – Background of consolidated companies (continued)

6.4 Information on consolidated subsidiaries, continued

12/31/2011
																Net profit
		Country of	Functional	Ownership interest						Assets		Liabilities		Total equity		(loss)
Subsidiary	Tax ID No.	incorporation	currency	Direct		Indirect		Total		ThUS$		ThUS$		ThUS$		ThUS$
SQM Nitratos S.A.	96.592.190-7	Chile	US$		99.9999		0.0001		100.0000		819,424		665,515		153,909		106,473
Proinsa Ltda.	78.053.910-0	Chile	Chilean peso		-		60.5800		60.5800		204		-		204		(1	)
SQMC Internacional Ltda.	86.630.200-6	Chile	Chilean peso		-		60.6381		60.6381		268		-		268		(4	)
SQM Potasio S.A.	96.651.060-9	Chile	US$		99.9974		-		99.9974		771,112		120,138		650,974		246,439
Serv. Integrales de Tránsito y Transf. S.A.	79.770.780-5	Chile	US$		0.0003		99.9997		100.0000		277,296		250,558		26,738		4,302
Isapre Norte Grande Ltda.	79.906.120-1	Chile	Chilean peso		1.0000		99.0000		100.0000		1,127		716		411		28
Ajay SQM Chile S.A.	96.592.180-K	Chile	US$		51.0000		-		51.0000		26,977		9,855		17,122		10,066
Almacenes y Depósitos Ltda.	79.876.080-7	Chile	Chilean peso		1.0000		99.0000		100.0000		419		1		418		(17	)
SQM Salar S.A.	79.626.800-K	Chile	US$		18.1800		81.8200		100.0000		1,438,672		610,538		828,134		286,239
SQM Industrial S.A.	79.947.100-0	Chile	US$		99.0470		0.9530		100.0000		1,889,981		1,066,598		823,383		93,062
Minera Nueva Victoria S.A..	78.602.530-3	Chile	US$		99.000		1.0000		100.0000		112,628		4,527		108,101		4,069
Exploraciones Mineras S.A.	76.425.380-9	Chile	US$		0.2691		99.7309		100.0000		31,878		4,082		27,796		(207	)
Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A.	76.534.490-5	Chile	Chilean peso		-		100.0000		100.0000		757		648		109		(23	)
Soquimich Comercial S.A.	79.768.170-9	Chile	US$		-		60.6383		60.6383		191,346		82,750		108,596		7,220
Comercial Agrorama Ltda.	76.064.419-6	Chile	Chilean peso		-		42.4468		42.4468		11,555		10,264		1,291		29
Comercial Hydro S.A.	96.801.610-5	Chile	Chilean peso		-		60.6383		60.6383		7,681		241		7,440		334
Agrorama S.A.	76.145.229-0	Chile	Chilean peso		-		60.6377		60.6377		328		226		102		(91	)
SQM North America Corp.	Foreign	United States	US$		40.0000		60.0000		100.0000		188,554		176,816		11,738		(19,702	)

Notes to the consolidated financial statements as of June 30, 2012

Note 6 – Background of consolidated companies (continued)

6.4 Information on consolidated subsidiaries, continued

12/31/2011
																	Net profit
		Country of	Functional	Ownership interest						Assets		Liabilities		Total equity			(loss)
Subsidiary	Tax ID No.	incorporation	currency	Direct		Indirect		Total		ThUS$		ThUS$		ThUS$			ThUS$
RS Agro Chemical Trading A.V.V.	Foreign	Aruba	US$		98.3333		1.6667		100.0000		5,224		-		5,224			(4	)
Nitratos Naturais do Chile Ltda.	Foreign	Brazil	US$		-		100.0000		100.0000		2,349		6,804		(4,455	)		271
Nitrate Corporation of Chile Ltd.	Foreign	United Kingdom	US$		-		100.0000		100.0000		5,076		-		5,076			-
SQM Corporation N.V.	Foreign	Dutch Antilles	US$		0.0002		99.9998		100.0000		89,469		3,715		85,754			40,340
SQM Perú S.A.	Foreign	Peru	US$		0.9800		99.0200		100.0000		6,466		6,611		(145	)		(759	)
SQM Ecuador S.A.	Foreign	Ecuador	US$		0.0040		99.9960		100.0000		9,724		9,176		548			(83	)
SQM Brasil Ltda.	Foreign	Brazil	US$		2.7900		97.2100		100.0000		354		1,050		(696	)		113
SQI Corporation N.V.	Foreign	Dutch Antilles	US$		0.0159		99.9841		100.0000		17		36		(19	)		6
SQMC Holding Corporation L.L.P.	Foreign	Aruba	US$		0.1000		99.9000		100.0000		21,131		614		20,517			10,926
SQM Japan Co. Ltd.	Foreign	Japan	US$		1.0000		99.0000		100.0000		2,968		1,078		1,890			518
SQM Europe N.V.	Foreign	Belgium	US$		0.8600		99.1400		100.0000		430,994		393,419		37,575			20,135
SQM Italia SRL	Foreign	Italy	US$		-		100.0000		100.0000		1,333		17		1,316			-
SQM Indonesia S.A.	Foreign	Indonesia	US$		-		80.0000		80.0000		5		1		4			(1	)
North American Trading Company	Foreign	United States	US$		-		100.0000		100.0000		306		39		267			-
SQM Virginia LLC	Foreign	United States	US$		-		100.0000		100.0000		29,207		14,830		14,377			(3	)
SQM Comercial de México S.A. de C.V.	Foreign	Mexico	US$		0.0013		99.9987		100.0000		68,572		48,406		20,166			(1,061	)

Notes to the consolidated financial statements as of June 30, 2012

Note 6 – Background of consolidated companies (continued)

6.4 Information on consolidated subsidiaries, continued

12/31/2011
																	Net profit
		Country of	Functional	Ownership interest						Assets		Liabilities		Total equity			(loss)
Subsidiary	Tax ID No.	incorporation	currency	Direct		Indirect		Total		ThUS$		ThUS$		ThUS$			ThUS$
SQM investment Corporation N.V.	Foreign	Dutch Antilles	US$		1.0000		99.0000		100.0000		65,123		41,991		23,132			1,887
Royal Seed Trading Corporation A.V.V.	Foreign	Aruba	US$		1.6700		98.3300		100.0000		196,735		203,543		(6,808	)		1,251
SQM Lithium Specialties LLP	Foreign	United States	US$		-		100.0000		100.0000		15,785		1,264		14,521			(3	)
Soquimich SRL Argentina	Foreign	Argentina	US$		-		100.0000		100.0000		429		144		285			(78	)
Comercial Caimán Internacional S.A.	Foreign	Panama	US$		-		100.0000		100.0000		477		1,232		(755	)		(14	)
SQM France S.A.	Foreign	France	US$		-		100.0000		100.0000		351		114		237			-
Administración y Servicios Santiago S.A. de C.V.	Foreign	Mexico	US$		-		100.0000		100.0000		13		915		(902	)		100
SQM Nitratos México S.A. de C.V.	Foreign	Mexico	US$		-		51.0000		51.0000		27		17		10			-
Soquimich European Holding B.V.	Foreign	The Netherlands	US$		-		100.0000		100.0000		153,211		72,969		80,242			38,850
SQM Iberian S.A	Foreign	Spain	US$		-		100.0000		100.0000		27,225		25,638		1,587			258
Iodine Minera B.V.	Foreign	The Netherlands	US$		-		100.0000		100.0000		13,228		7		13,221			3,100
SQM Africa Pty Ltd.	Foreign	South Africa	US$		-		100.0000		100.0000		62,335		52,657		9,678			7,821
SQM Venezuela S.A.	Foreign	Venezuela	US$		-		100.0000		100.0000		5		328		(323	)		(157	)
SQM Oceania Pty Ltd.	Foreign	Australia	US$		-		100.0000		100.0000		4,349		1,042		3,307			2,372
SQM Agro India Pvt. Ltd.	Foreign	India	US$		-		100.0000		100.0000		63		18		45			(27	)
SQM Beijing Commercial Co. Ltd.	Foreign	China	US$		-		100.0000		100.0000		2,147		1,910		237			140

Total											6,984,905		3,893,058		3,091,847			864,114

Notes to the consolidated financial statements as of June 30, 2012

Note 6 – Background of consolidated companies (continued)

6.5 Detail of transactions between consolidated companies

Transactions conducted in 2012

During the second quarter of 2012, there were no transactions between subsidiaries.

Transactions conducted in 2011

On April 7, 2011, Agrorama S.A. was incorporated with ownership interest by Soquimich Comercial S.A. of 99.999% and by Sociedad Productora de Insumos Agrícolas Ltda. of 0.001%. This new company will have share capital of ThCh$100.000 (ThUS$ 211), its lifespan will be indefinite and its line of business will be the trading and distribution of fertilizers, pesticides and agricultural products or supplies.

On August 30, 2011, SQM Industrial S.A. made a capital contribution of ThUS$8,000 in its subsidiary SQMC Mexico S.A. de CV.

During September 2011, SQM Industrial S.A. made a capital contribution of ThUS$14,017 to its subsidiary, SQMC México S.A. de CV, increasing its ownership interest to 99.8739% .

During September 2011, the subsidiary, Soquimich European Holding B.V., acquires from its associate, Nutrisi Holding N.V. ownership interest of 66.6% which it maintained in the subsidiary, Fertilizantes Naturales S.A. for ThUS$3,179.

On December 12, 2011, the subsidiary, Comercial Agrorama Callegari Ltda. changed its name to “Comercial Agrorama Limitada”.

On December 14, 2011, Fertilizantes Naturales S.A. changed its name to SQM Iberian S.A.

During December 2011, the subsidiary, Soquimich European Holding B.V. sell its ownership interest of 50% in Nutrisi Holding N.V. for ThUS$5,736.

Notes to the consolidated financial statements as of June 30, 2012

Note 7 – Cash and cash equivalents

7.1

Types of cash and cash equivalents

As of June 30, 2012 and December 31, 2011, cash and cash equivalents are detailed as follows:

a) Cash	06/30/2012		12/31/2011
	ThUS$		ThUS$

Cash on hand		119		73
Cash in banks		43,774		21,398
Other demand deposits		6,260		16,552
Total cash		50,153		38,023

b) Cash equivalents	06/30/2012		12/31/2011
	ThUS$		ThUS$

Short-term deposits, classified as cash equivalents		169,231		263,396
Short-term investments, classified as cash equivalents		195,895		143,573
Total cash equivalents		365,126		406,969

Total cash and cash equivalents		415,279		444,992

Notes to the consolidated financial statements as of June 30, 2012

Note 7 – Cash and cash equivalents (continued)

7.2

Short-term investments, classified as cash equivalents

As of June 30, 2012 and December 31, 2011, short-term investments, classified as cash and cash equivalents relate to mutual funds (investment liquidity funds) for investments in:

Institution	06/30/2012 ThUS$		12/31/2011 ThUS$
Legg Mason - Western Asset Institutional Liquid Reserves		65,329		47,162
BlackRock - Institutional cash series PLC		65,448		48,025
JP Morgan US dollar Liquidity Fund Institutional		65,118		48,386
Total		195,895		143,573

Short-term investments are highly liquid fund manager accounts that are basically invested in short-term fixed rate notes in the U.S. market.

7.3

Information on cash and cash equivalents by currency

Cash and equivalent to cash of the balances in cash, Banks, and financial instruments as of June 30 of 2012 and December 31 of 2011, classified by currency, is the following:

Original currency	06/30/2012		12/31/2011
	ThUS$		ThUS$
Chilean Peso (*)		37,541		123,265
US Dollar		351,913		297,257
Euro		16,788		16,343
Mexican Peso		63		29
South African Rand		6,985		5,450
Argentinean Peso		2		-
Japanese Yen		1,547		2,292
Peruvian Sol		16		16
Brazilian Real		37		21
Chinese Yuan		367		300
Indonesian rupee		5		5
Pound sterling		15		14
Total		415,279		444,992

(*) The Company maintains financial derivative policies which allow dollarizing these term deposits in Chilean pesos.

Notes to the consolidated financial statements as of June 30, 2012

Note 7 – Cash and cash equivalents (continued)

7.4

Amount of significant restricted (unavailable) cash balances

Cash on hand and in current bank accounts are available resources, and their carrying value is equal to their fair value.

As of June 30, 2012 and December 31, 2011, the Company has no significant cash balances with any type of restriction.

Notes to the consolidated financial statements as of June 30, 2012

Note 7 – Cash and cash equivalents (continued)

7.5 Short-term deposits, classified as cash equivalents

The detail at the end of each period is as follows:

									Principal		Interest accrued		06/30/2012		12/31/2011
Receiver of the deposit	Type of deposit	Original Currency	Interest rate		Placement date		Expiration date		ThUS$		to-date ThUS		ThUS$		ThUS$
Banco Crédito e Inversiones	Fixed term	Chilean peso		0.50		06/29/2012		09/27/2012		20,070		3		20,073		9,677
Banco Crédito e Inversiones	Fixed term	Chilean peso		0.45		06/29/2012		07/09/2012		6,577		1		6,578		9,676
Banco Crédito e Inversiones	Fixed term	US$		0.87		05/11/2012		07/10/2012		15,000		18		15,018		25,209
Banco Crédito e Inversiones	-	-		-		-		-		-		-		-		20,010
Banco Crédito e Inversiones	-	-		-		-		-		-		-		-		20,531
Banco Crédito e Inversiones	-	-		-		-		-		-		-		-		20,011
Banco Crédito e Inversiones	-	-		-		-		-		-		-		-		20,014
Banco de Chile	Fixed term	Chilean peso		0.52		04/10/2012		07/09/2012		9,691		136		9,827		-
Banco Estado	Fixed term	US$		0.95		05/16/2012		07/19/2012		20,343		24		20,367		-
Banco Santander-Santiago	Fixed term	US$		1.01		06/22/2012		08/23/2012		10,000		2		10,002		12,093
Banco Santander-Santiago	Fixed term	US$		1.10		06/22/2012		09/11/2012		20,000		5		20,005		20,110
Banco Santander-Santiago	-	-		-		-		-		-		-		-		20,110
Banco Santander-Santiago	-	-		-		-		-		-		-		-		20,110
Banco Santander-Santiago	Fixed term	US$		0.80		06/18/2012		07/26/2012		15,020		4		15,024		3,001
Banco Santander-Santiago	Fixed term	US$		0.83		06/18/2012		08/02/2012		5,000		1		5,001		-
Banco Santander-Santiago	Fixed term	US$		1.00		05/14/2012		08/09/2012		20,063		26		20,089		-
Banco Santander-Santiago	Fixed term	US$		0.93		06/19/2012		08/16/2012		10,000		3		10,003		-
Citibank New – York	Overnight	US$		0.01		06/29/2012		07/02/2012		410		-		410		115
Citibank New – York	Overnight	US$		0.01		06/28/2012		07/02/2012		1,948		-		1,948		1,586
Citibank New – York	Overnight	US$		0.01		06/29/2012		07/02/2012		4,765		-		4,765		-

Notes to the consolidated financial statements as of June 30, 2012

Note 7 – Cash and cash equivalents (continued)

7.5 Short-term deposits, classified as cash equivalents

The detail at the end of each period is as follows:

Receiver of the deposit	Type of deposit		Original Currency		Interest rate		Placement date		Expiration date		Principal ThUS$		Interest accrued to-date ThUS		06/30/2012 ThUS$		12/31/2011 ThUS$
Citibank New - York		Overnight		US$		0,01		06/29/2012		07/02/2012		118		-		118		-
Corpbanca		-		-		-		-		-		-		-		-		16,043
Corpbanca		-		-		-		-		-		-		-		-		20,016
Corpbanca		-		-		-		-		-		-		-		-		10,032
Corpbanca		-		-		-		-		-		-		-		-		10,008
IDBI Bank		Fixed term		Indian rupee		-		06/30/2012		07/31/2012		2		-		2		2
Banco BBVA Chile		Fixed term		US$		0,75		06/26/2012		07/12/2012		10,000		1		10,001		5,042
Total																169,231		263,396

Notes to the consolidated financial statements as of June 30, 2012

Note 8 - Inventory

The composition of inventory at each period-end is as follows:

Type of inventory	06/30/2012 ThUS$		12/31/2011 ThUS$

Raw materials		9,827		10,111
Supplies for production		37,896		31,602
Products-in-progress		372,075		355,894
Finished products		374,381		346,795
Total		794,179		744,402

Inventory reserves recognized as of June 30, 2012 amount to ThUS$66,787, as of December 31, 2011 amounted to ThUS$58,220. Inventory reserves have been made based on a technical study that covers the different variables affecting products in stock (density, humidity, among others). Additionally, reserves are recognized if goods are sold cheaper than the related cost, and for differences that arise from inventory counts.

As of June 30, 2012, the sum registered as cost of sale related to inventory in the statement of income amounts to ThUS$522,356 and as of June 30, 2011 to ThUS$483,368.

The breakdown of inventory reserves is detailed as follows:

Type of inventory	06/30/2012 ThUS$		12/31/2011 ThUS$

Raw material reserves		593		593
Supplies for production reserves		-		500
Products-in-progress reserves		39,542		33,811
Finished product reserves		26,652		23,316

Total		66,787		58,220

The Company has not delivered inventory as collateral for the periods indicated above.

Notes to the consolidated financial statements as of June 30, 2012

Note 9 – Related party disclosures

9.1

Related party disclosures

Balances pending at period-end are not guaranteed, accrue no interest and are settled in cash. No guarantees have been delivered or received for trade and other receivables due from related parties or trade and other payables due to related parties. For the period ended June 30, 2012, the Company has not recorded any impairment in accounts receivable related to amounts owed by related parties. This evaluation is conducted every year through an examination of the financial position of the related party in the market in which it operates.

9.2

Relationships between the parent and the entity

According to the Company’s by-laws, no shareholder can own more than 32% of the Company’s voting right shares.

Sociedad de Inversiones Pampa Calichera S.A., Potasios de Chile S.A., and Global Mining Investments (Chile) S.A., collectively the Pampa Group, are the owners of a number of shares that are equivalent to 31.32% as of June 30, 2012 of the current total amount of shares issued, subscribed and fully-paid of the Company. In addition, Kowa Company Ltd., Inversiones La Esperanza (Chile) Limitada, Kochi S.A. and La Esperanza Delaware Corporation, collectively the Kowa Group, are the owners of a number of shares equivalent to 2.08% of the total amount of shares of SQM S.A. issued, subscribed and fully-paid.

The Pampa Group and the Kowa Group have informed SQM S.A., the Chilean SVS and the relevant stock exchanges in Chile and abroad that they are not and have never been related parties between them. In addition, this is regardless of the fact that both Groups on December 21, 2006 have entered into a Joint Action Agreement (JAA) related to those shares. Consequently, the Pampa Group, by itself, does not concentrate more than 32% of the voting right capital of SQM S.A., and the Kowa Group does not concentrate by itself more than 32% of the voting right capital of SQM S.A.

Likewise, the Joint Action Agreement has not transformed the Pampa and Kowa Groups into related parties between them. The Joint Action Agreement has only transformed the current controller of SQM S.A., composed of the Pampa Group, and the Kowa Group into related parties of SQM S.A.

Notes to the consolidated financial statements as of June 30, 2012

Note 9 – Related party disclosures (continued)

9.2

Relationships between the parent and the entity

Detail of effective concentration

Tax ID No.	Name	Ownership interest %
96.511.530-7	Sociedad de Inversiones Pampa Calichera S.A.		21.01
96.863.960-9	Global Mining Investments (Chile) S.A.		3.34
76.165.311-5	Potasios de Chile S.A.		6.97
Total Pampa Group			31.32

79.798.650-k	Inversiones la Esperanza (Chile) Ltda.		1.40
59.046.730-8	Kowa Co Ltd.		0.30
96.518.570-4	Kochi S.A.		0.29
59.023.690-k	La Esperanza Delaware Corporation		0.09
Total Kowa Group			2.08

9.3

Intermediate parent that publicly issues financial statements

The following intermediate parent of Sociedad Química y Minera de Chile S.A publicly issues financial statements:

Soquimich Comercial S.A.

9.4

Detailed identification of the link between the parent and the subsidiary

As of June 30, 2012 and December 31, 2011, the detail is as follows:

Tax ID No.	Name	Country of origin	Functional currency	Nature
Foreign	Nitratos Naturais Do Chile Ltda.	Brazil	US$	Subsidiary
Foreign	Nitrate Corporation Of Chile Ltd.	United Kingdom	US$	Subsidiary
Foreign	SQM North America Corp.	United States	US$	Subsidiary
Foreign	SQM Europe N.V.	Belgium	US$	Subsidiary
Foreign	Soquimich S.R.L. Argentina	Argentina	US$	Subsidiary
Foreign	Soquimich European Holding B.V.	The Netherlands	US$	Subsidiary
Foreign	SQM Corporation N.V.	Dutch Antilles	US$	Subsidiary
Foreign	SQI Corporation N.V.	Dutch Antilles	US$	Subsidiary
Foreign	SQM Comercial De México S.A. de C.V.	Mexico	US$	Subsidiary
Foreign	North American Trading Company	United States	US$	Subsidiary
Foreign	Administración y Servicios Santiago S.A. de C.V.	Mexico	US$	Subsidiary
Foreign	SQM Perú S.A.	Peru	US$	Subsidiary
Foreign	SQM Ecuador S.A.	Ecuador	US$	Subsidiary
Foreign	SQM Nitratos Mexico S.A. de C.V.	Mexico	US$	Subsidiary
Foreign	SQMC Holding Corporation L.L.P.	United States	US$	Subsidiary
Foreign	SQM Investment Corporation N.V.	Dutch Antilles	US$	Subsidiary
Foreign	SQM Brasil Limitada	Brazil	US$	Subsidiary
Foreign	SQM France S.A.	France	US$	Subsidiary
Foreign	SQM Japan Co. Ltd.	Japan	US$	Subsidiary
Foreign	Royal Seed Trading Corporation A.V.V.	Aruba	US$	Subsidiary
Foreign	SQM Oceania Pty Limited	Australia	US$	Subsidiary
Foreign	Rs Agro-Chemical Trading A.V.V.	Aruba	US$	Subsidiary
Foreign	SQM Indonesia S.A.	Indonesia	US$	Subsidiary
Foreign	SQM Virginia L.L.C.	United States	US$	Subsidiary
Foreign	SQM Venezuela S.A.	Venezuela	US$	Subsidiary
Foreign	SQM Italia SRL	Italy	US$	Subsidiary

Notes to the consolidated financial statements as of June 30, 2012

Note 9 – Related party disclosures (continued)

9.4

Detailed identification of the link between the parent and the subsidiary, continued

As of June 30, 2012 and December 31, 2011, the detail is as follows:

Tax ID no.	Name	Country of origin	Functional currency	Nature
Foreign	Comercial Caimán Internacional S.A.	Cayman Islands	US$	Subsidiary
Foreign	SQM Africa Pty. Ltd.	South Africa	US$	Subsidiary
Foreign	SQM Lithium Specialties LLC	United States	US$	Subsidiary
Foreign	SQM Iberian S.A.	Spain	US$	Subsidiary
Foreign	Iodine Minera B.V.	The Netherlands	US$	Subsidiary
Foreign	SQM Agro India Pvt. Ltd.	India	US$	Subsidiary
Foreign	SQM Beijing Commercial Co. Ltd.	China	US$	Subsidiary
96.801.610-5	Comercial Hydro S.A.	Chile	US$	Subsidiary
96.651.060-9	SQM Potasio S.A.	Chile	US$	Subsidiary
96.592.190-7	SQM Nitratos S.A.	Chile	US$	Subsidiary
96.592.180-K	Ajay SQM Chile S.A.	Chile	US$	Subsidiary
86.630.200-6	SQMC Internacional Ltda.	Chile	Chilean peso	Subsidiary
79.947.100-0	SQM Industrial S.A.	Chile	US$	Subsidiary
79.906.120-1	Isapre Norte Grande Ltda.	Chile	Chilean peso	Subsidiary
79.876.080-7	Almacenes y Depósitos Ltda.	Chile	Chilean peso	Subsidiary
79.770.780-5	Servicios Integrales de Tránsitos y Transferencias S.A.	Chile	US$	Subsidiary
79.768.170-9	Soquimich Comercial S.A.	Chile	US$	Subsidiary
79.626.800-K	SQM Salar S.A.	Chile	US$	Subsidiary
78.602.530-3	Minera Nueva Victoria Ltda.	Chile	US$	Subsidiary
78.053.910-0	Proinsa Ltda.	Chile	Chilean peso	Subsidiary
76.534.490-5	Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A.	Chile	Chilean peso	Subsidiary
76.425.380-9	Exploraciones Mineras S.A.	Chile	US$	Subsidiary
76.064.419-6	Comercial Agrorama Ltda.	Chile	Chilean peso	Subsidiary
76.145.229-0	Agrorama S.A.	Chile	Chilean peso	Subsidiary
77.557.430-5	Sales de Magnesio Ltda.	Chile	Chilean peso	Associate
Foreingn	Abu Dhabi Fertilizer Industries WWL	Arabia	Dirham de los Emiratos Arabes	Associate
Foreingn	Doktor Tarsa Tarim Sanayi AS	Turkey	Turkish lira	Associate
Foreingn	Ajay North America	United States	US$	Associate
Foreingn	Ajay Europe SARL	France	Euro	Associate
Foreingn	SQM Eastmed Turkey	Turkey	Euro	Associate
Foreingn	SQM Thailand Co. Ltd.	Thailand	Bath Tailandés	Associate
Foreingn	Sichuan SQM Migao Chemical Fertilizers Co Ltda.	China	US$	Joint business
Foreingn	Coromandel SQM	India	Indian rupee	Joint business
Foreingn	SQM Vitas Fzco.	Arab Emirates	Arab Emirates dirham	Joint business
Foreingn	SQM Star Qingdao Crop Nutrition Co., Ltd.	China	US$	Joint business
Foreingn	Kowa Company Ltd.	Japan	US$	Other related parties
96.511.530-7	Sociedad de Inversiones Pampa Calichera	Chile	US$	Other related parties
79.049.778-9	Callegari Agricola S.A.	Chile	Chilean peso	Other related parties
Foreingn	Coromandel Internacional	India	Indian rupee	Other related parties
Foreingn	Vitas Roullier SAS	France	Euro	Other related parties
Foreingn	SQM Vitas Brasil Agroindustria	Brazil	US$	Joint business or significant influence
Extanjero	SQM Vitas Perú S.A.C.	Peru	US$	Joint business or significant influence
Foreingn	SQM Vitas Southem Africa Pty.	South Africa	US$	Joint business or significant influence
Foreingn	Misr Speciality Fertilizers(*)	Egypt	Egyptian pound	Associate
Foreingn	NU3 N.V. (*)	Belgium	Euro	Associate
Foreingn	NU3 B.V. (*)	The Netherlands	Euro	Associate

(*) Ownership relationship up to 2011

Notes to the consolidated financial statements as of June 30, 2012

Note 9 – Related party disclosures (continued)

9.5

Detail of related parties and transactions with related parties

Transactions between the Parent and its subsidiaries are part of the Company's common transactions. Their conditions are those customary for this type of transactions in respect of terms and market prices. In addition, these have been eliminated in consolidation and are not detailed in this note.

Maturity terms for each case vary by virtue of the transaction giving rise to them.

As of June 30, 2012 and December 31, 2011, there are no allowances for doubtful accounts related to balances pending of transactions with related parties as there is no impairment in them.

Here below you will find detail of the transactions with parts related to June 30th, 2012, and December 31st, 2011:

Tax ID No.

Company

Nature

Country of
origin

Transaction

06/30/2012
ThUS$

12/31/2011
ThUS$

Foreign

Doktor Tarsa Tarim Sanayi As

Associate

Turkey

Sale of products

5,605

26,748

Foreign

Ajay Europe S.A.R.L.

Associate

France

Sale of products

17,556

27,743

Foreign

Ajay North America LLC.

Associate

United States

Sale of products

24,769

47,501

Foreign

Abu Dhabi Fertilizer Industries WWL

Associate

United Arab Emirates

Sale of products

3,864

8,234

Foreign

Kowa Company Ltd.

Other related parties

Japan

Sale of products

59,632

138,818

Foreign

NU3 B.V.

Associate

The Netherlands

Sale of products

15,708

Foreign

NU3 N.V.

Associate

Belgium

Sale of products

9,993

Foreign

SQM Thailand Co. Ltd.

Associate

Thailand

Sale of products

8,326

7,355

Foreign

SQM Vitas Brasil Agroindustria

Joint control or significant influence

Brazil

Sale of products

15,245

34,514

Foreign

SQM Vitas Perú S.A.C.

Joint control or significant influence

Peru

Sale of products

7,815

13,608

Foreign

SQM Vitas Southern Africa Pty.

Joint control or significant influence

South Africa

Sale of products

2,287

Foreign

SQM Vitas Fzco.

Joint venture

United Arab Emirates

Sale of products

1,562

Foreign

SQM Star Qingdao Crop Nutrition Co., Ltd.

Joint venture

China

Sale of products

4,853

Foreing

Coromandel SQM

Joint Venture

India

Sale of products

1,337

Foreing

Sichuan SQM Migao Chemical Fertilizers Co Ltda.

Joint Venture

China

Sale of products

Notes to the consolidated financial statements as of June 30, 2012

Note 9 – Related party disclosures (continued)

9.6

Trade receivables due from related parties, current:

Tax ID No.

Name

Nature

Country of origin

Currency

06/30/2012
ThUS$

12/31/2011
ThUS$

77.557.430-5

Sales de Magnesio Ltda.

Associate

Chile

Chilean peso

685

96.511.530-7

Soc.de Inversiones Pampa Calichera

Jointly controlled entity

Chile

US$

79.049.778-9

Callegari Agrícola S.A.

Other related party

Chile

Chilean peso

425

314

Foreign

Doktor Tarsa Tarim Sanayi AS

Associate

Turkey

US$

3,899

Foreign

Ajay Europe S.A.R. L.

Associate

France

US$

6,045

4,603

Foreign

Ajay North America LLC.

Associate

United States

US$

7,828

7,387

Foreign

Abu Dhabi Fertilizer Industries WWL

Associate

United Arab Emirates

US$

3,871

4,587

Foreign

Misr Speciality Fertilizers

Associate

Egypt

US$

199

Foreign

Kowa Company Ltd.

Jointly controlled entity

Japan

US$

37,042

44,188

Foreign

SQM Thailand Co. Ltd.

Associate

Thailand

US$

9,980

5,521

Foreign

Qingdao SQM-Star Corp

Joint venture

China

US$

Foreign

SQM Vitas Brasil Agroindustria

Joint venture

Brazil

US$

28,948

27,523

Foreign

SQM Vitas Perú S.A.C.

Joint venture

Peru

US$

12,759

17,534

Foreign

SQM Vitas Southern Africa PTY

Joint venture

South Africa

US$

1,370

597

Foreign

Coromandel Fertilizers Limited

Joint venture

India

Indian rupee

852

Foreing

SQM Vitas Fzco.

Other Related parties

United Arab Emirates

Arab Emirates dirham

Foreing

Coromandel Internacional

Other related parties

India

Indian rupee

491

Total to-date

109.779

117,139

Notes to the consolidated financial statements as of June 30, 2012

Note 9 – Related party disclosures (continued)

9.7

Trade payables due to related parties, current:

Tax ID No.

Name

Nature

Country of origin

Currency

06/30/2012
ThUS$

12/31/2011
ThUS$

Foreign

SQM Vitas Fzco

Joint venture

United Arab Emirates

Arab Emirates dirham

873

Total to-date

873

Notes to the consolidated financial statements as of June 30, 2012

Note 9 – Related party disclosures (continued)

9.8

Board of directors and senior management

Board of directors

The Company is managed by a Board of Directors which is composed of eight regular directors who are elected for a three-year period. The present Board of Directors was elected by the shareholders at the Ordinary Shareholders' Meeting of April 28, 2011.

As of June 30, 2012, the Company has an Audit Committee made up of three members of the Board of Directors. This Committee performs those duties provided in Article 50 bis of Law No. 18,046 on Shareholders Company, the Shareholders’ Company Act.

During the periods covered by these financial statements, there are no pending balances receivable and payable between the Company, its directors or members of Senior Management other than those related to remuneration, fee allowances and profit-sharing. In addition, there were no transactions conducted between the Company, its directors or members of Senior Management.

Directors’ Compensation

2.1 2012

2.1.1 Board of Directors

Directors’ compensation is detailed as follows:

A payment of a monthly fixed gross amount of UF 300 in favor of the Chairman of the Company’s Board of Directors and UF 50 in favor of the seven remaining board members regardless of their attendance at Board meetings or the number of meetings attended during the related month.

A payment in domestic currency in favor of the Chairman of the Company’s Board of Directors consisting of a variable and gross amount equivalent to 0.35% of profit for the period effectively earned by the Company during fiscal year 2012.

A payment in domestic currency in favor of each Company’s directors excluding the Chairman of the Board, consisting of a variable and gross amount equivalent to 0.04% of profit for the period effectively earned by the Company during fiscal year 2012.

Notes to the consolidated financial statements as of June 30, 2012

Note 9 – Related party disclosures (continued)

9.8

Board of directors and senior management, continued

The fixed and variable amounts indicated above will not be subject to any charge between them, and those expressed as a percentage will be paid immediately after the shareholders at the respective Annual General Shareholders’ Meeting of the Company approve the statement of financial position (balance sheet), the financial statements, the annual report, the report by the account inspectors and the report of external auditors for the fiscal year ending December 31, 2012.

Therefore, the remunerations and profit sharing paid to members of the Board of Directors and Audit Committee during 2012 amount to ThUS$3,813.

2.1.2 Audit Committee

The remuneration of the Audit Committee is detailed as follows:

A payment of a monthly, fixed and gross amount of UF 17 in favor of each of the three Directors who are a part of the Company’s Audit Committee regardless of the number of meetings conducted during the respective month.

A payment in domestic currency and in favor of each of the three Directors of a variable and gross amount equivalent to 0.013% of the Company’s profit for the period effectively earned by the Company during fiscal year 2012.

Notes to the consolidated financial statements as of June 30, 2012

Note 9 – Related party disclosures (continued)

9.8

Board of directors and senior management, continued

2.2 2011

2.2.1 Board of directors

Directors’ compensation is detailed as follows:

Therefore, the remunerations and profit sharing paid to members of the Board of Directors and Audit Committee during 2011 amount to ThUS$3,030.

2.2.2 Audit Committee

The remuneration of Directors Committee is composed of:

Notes to the consolidated financial statements as of June 30, 2012

Note 9 – Related party disclosures (continued)

9.8

Board of directors and senior management, continued

No guarantees have been constituted in favor of the directors.

Senior management compensation

As of June 30, 2012, the global compensation paid to the 121 main executives amounts to ThUS$ 20,720 (ThUS$ 22,509 as of December 31, 2011). This includes monthly fixed salary and variable performance bonuses.

The Company has a bonuses intermediate and bi-intermediate plan for compliance target and level of individual contribution to the Company’s profit or loss. These benefits are structured in a minimum and maximum of gross remunerations which are paid once a year or every two years.

Additionally, the Company has retention bonuses for the Company’s executives. The amount of these bonuses is linked to the price of the Company’s share and is payable in cash between 2012 and 2016 (See Note 16).

No guarantees have been constituted in favor of the Company’s management.

The Company’s Managers and Directors do not receive or have not received any benefit during the period ended June 30,2012 and December 31, 2011 or compensation for the concept of pensions, life insurance, paid time off, profit sharing, incentives, or benefits due to disability other than those mentioned in the preceding points.

In accordance with IAS 24, we should report that one of the Company’s Board of Directors is member of the Ultramar Group. During the period ended June 30, 2012, the amount of operations with this Group is approximately ThUS$6,319 (ThUS$13,751 as of December 31, 2011).

9.9

Compensation of key management personnel

	06/30/2012		12/31/2011
	ThUS$		ThUS$
Compensation of key management personnel		20,720		22,509

Notes to the consolidated financial statements as of June 30, 2012

Note 10 – Financial instruments

Financial assets in conformity with IAS 39 are detailed as follows:

10.1

Types of other financial assets

Types of other financial assets	06/30/2012 ThUS$		12/31/2011 ThUS$

Other current financial assets (1)		328,193		129,069
Derivatives (2)		11,435		14,455
Hedging assets, current		36,076		25,737
Total other current financial assets		375,704		169,261

Other non-current financial assets (3)		115		117
Hedging assets, non-current		38,282		30,371
Total other non-current financial assets		38,397		30,488

(1)

Relates to term deposits with maturities exceeding 90 days from the investment date.

(2)

Relate to forwards and options that were not classified as hedging instruments (see detail in Note 10.3).

(3)

Relate to guarantees delivered for the lease of offices and investments in Sociedad Garantizadora de Pensiones (ownership interest of 3 %.)

Detail of other current financial assets

Institution	06/30/2012 ThUS$		12/31/2011 ThUS$
Banco Santander		70,068		13,753
BBVA		33,258		33,528
Banco de Crédito e Inversiones		87,070		17,739
Banco de Chile		100,390		44,849
Corpbanca		37,407		19,200
Total		328,193		129,069

10.2

Trade and other receivables, current and non-current

	06/30/2012						12/31/2011
	Current		Non-current		Total		Current		Non-current		Total
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$

Trade receivables, current		467,536		-		467,536		387,607		-		387,607
Prepayments, current		10,774		-		10,774		10,706		-		10,706
Other receivables, current		10,037		1,335		11,372		13,749		1,070		14,819
Total trade and other receivables, current		488,347		1,335		489,682		412,062		1,070		413,132

Notes to the consolidated financial statements as of June 30, 2012

Note 10 – Financial instruments, (continued)

10.2

Trade and other receivables, continued

	06/30/2012							12/31/2011
	Assets before allowances		Allowance for doubtful trade receivables			Assets for trade receivables, net		Assets before allowances		Allowance for doubtful trade receivables			Assets for trade receivables, net
	ThUS$		ThUS$			ThUS$		ThUS$		ThUS$			ThUS$
Receivables related to credit operations, current		484,297		(16,761	)		467,536		404,320		(16,713	)		387,607

Trade receivables, current		484,297		(16,761	)		467,536		404,320		(16,713	)		387,607

Prepayments, current		10,774		-			10,774		10,706		-			10,706
Other receivables, current		12,015		(1,978	)		10,037		15,709		(1,960	)		13,749

Trade and other receivables, current		507,086		(18,739	)		488,347		430,735		(18,673	)		412,062

Other receivables, non-current		1,335		-			1,335		1,070		-			1,070

Non-current receivables		1,335		-			1,335		1,070		-			1,070

Total trade and other receivables		508,421		(18,739	)		489,682		431,805		(18,673	)		413,132

Notes to the consolidated financial statements as of June 30, 2012

Note 10 – Financial instruments (continued)

10.2

Trade and other receivables, continued

Portfolio stratification, continued

The Company’s policy is to require guarantees (such as letters of credit, guarantee clauses and others) and/or maintaining insurance policies for certain accounts as deemed necessary by management.

Unsecuritized portfolio

As of June 30, 2012 and December 31, 2011, the detail of the unsecuritized portfolio is as follows:

06/30/2012
	Not overdue		1 - 30 days		31 and 60 days		61 - 90 days		91 - 120 days		121 - 150 days		151 - 180 days		181 - 210 days		211 - 250 days		Over 250 days		Total
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$
Number of customers, non-renegotiated portfolio		5,883		8,716		181		92		2,081		2,081		4,120		24		2,084		2,745		28,007
Non-renegotiated portfolio, gross		405,723		37,421		7,287		2,245		10,445		922		2,479		260		411		16,509		483,702
Number of customers, renegotiated portfolio		3		-		-		-		-		-		-		-		-		-		3

Renegotiated portfolio, gross		595		-		-		-		-		-		-		-		-		-		595

Total portfolio, gross		406,318		37,421		7,287		2,245		10,445		922		2,479		260		411		16,509		484,297

12/31/2011
	Not overdue		1 - 30 days		31 and 60 days		61 - 90 days		91 - 120 days		121 - 150 days		151 - 180 days		181 - 210 days		211 - 250 days		Over 250 days		Total
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$
Number of customers, non-renegotiated portfolio		5,369		1,701		640		401		340		340		332		335		340		2,147		11,945
Non-renegotiated portfolio, gross		348,299		27,945		4,778		12,058		817		87		407		103		299		8,673		403,466
Number of customers, renegotiated portfolio		1		2		-		-		-		-		-		-		-		-		3

Renegotiated portfolio, gross		504		350		-		-		-		-		-		-		-		-		854

Total portfolio, gross		348,803		28,295		4,778		12,058		817		87		407		103		299		8,673		404,320

Notes to the consolidated financial statements as of June 30, 2012

Note 10 – Financial instruments (continued)

10.2

Trade and other receivables, continued

The detail of allowance is as follows:

Allowance and write-offs	06/30/2012 ThUS$			12/31/2011 ThUS$

Allowance for non-renegotiated portfolio		19,274			21,961
Write-offs for the period		(535	)		(3,288	)

Credit risk concentration

Credit risk concentrations with respect to trade receivables are reduced due to the great number of entities included in the Company’s client database and their distribution throughout the world.

Notes to the consolidated financial statements as of June 30, 2012

Note 10 – Financial instruments (continued)

10.3

Hedging assets and liabilities

The balance represents derivative instruments measured at fair value which have been classified as hedges from exchange and interest rate risks related to the total obligations relating to bonds of the Company in Chilean pesos and UF (and the exchange risk in Chilean pesos of the Company’s investment plans). As of June 30, 2012 the face value of cash flows in Cross Currency Swap contracts agreed upon in US dollars amounted to ThUS$517,722 and as of December 31, 2011 such contracts amounted to ThUS$ 405,486.

Hedging assets	Derivative instruments (CCS)		Effect on profit or loss for the period, derivative instruments			Hedging reserve in gross equity			Deferred tax hedging reserve in equity		Hedging reserve in equity
	ThUS$		ThUS$			ThUS$			ThUS$		ThUS$

June 30, 2012		74,355		18,738			(13,152	)		2,298		(10,854	)

December 31, 2011		56,108		(39,718	)		(12,184	)		2,104		(10,080	)

Hedging assets	Derivative instruments (IRS)		Effect on profit or loss for the period, derivative instruments		Hedging reserve in gross equity		Deferred tax hedging reserve in equity		Hedging reserve in equity
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$

June 30, 2012		3		-		3		-		3

December 31, 2011		-		-		-		-		-

Hedging liabilities	Derivative instruments (IRS)		Effect on profit or loss for the period, derivative instruments			Hedging reserve in gross equity			Deferred tax hedging reserve in equity		Hedging reserve in equity
	ThUS$		ThUS$			ThUS$			ThUS$		ThUS$

June 30, 2012		1,072		53			(1,005	)		-		(1,005	)

December 31, 2011		270		(120	)		(150	)		-		(150	)

The balances in the effect on profit or loss column consider the interim effects of the contracts in force as of June 30, 2012 and December 31, 2011.

Notes to the consolidated financial statements as of June 30, 2012

Note 10 – Financial instruments (continued)

10.3

Hedging assets and liabilities, continued

Derivative contract maturities are detailed as follows:

Series		Contract amount ThUS$		Currency	Maturity date
	C		74,407	UF	12/01/2026
	G		33,673	Chilean peso	01/05/2014
	H		146,360	UF	01/05/2013
	I		56,041	UF	04/01/2014
	J		92,440	Chilean peso	04/01/2014
	M		46,463	UF	02/01/2017
	O		68,338	UF	02/01/2017

The Company uses cross currency swap derivative instruments to hedge the possible financial risk associated with the volatility of the exchange rate associated with Chilean pesos and UF. The objective is to hedge the exchange rate financial risks associated with bonds payable. Hedges are documented and tested to measure their effectiveness.

Based on a comparison of critical terms, hedging is highly effective, given that the hedged amount is consistent with obligations maintained for bonds denominated in Chilean pesos and UF. Likewise, hedging contracts are denominated in the same currencies and have the same expiration dates of bond principal and interest payments.

Hedge Accounting

The Company classifies derivative instruments as hedging that may include derivative or embedded derivatives either as fair value hedge derivative instruments, cash flow hedge derivative instruments, or hedge derivative instruments for net investment in a business abroad.

a) Fair value hedge

Changes in fair values of derivative instruments classified as fair value hedge derivative instruments are accounted for in gains and losses immediately along with any change in the fair value of the hedged item that is attributable to the risk being hedged.

The Company documents the relationship between hedge instruments and the hedged item along with the objectives of its risk management and strategy to carry out different hedging transactions. In addition, upon commencement of the period hedged and then on a quarterly basis the Company documents whether hedge instruments have been efficient and met the objective of hedging market fluctuations for the purpose of which we use the effectiveness test. A hedge instrument is deemed effective if the effectiveness test result is between 80% to 120%.

The hedge instruments are classified as effective or not effective on the basis of the effectiveness test results. This note includes the detail of fair values of derivatives classified as hedging instruments.

Notes to the consolidated financial statements as of June 30, 2012

Note 10 - Financial instruments (continued)

10.3

Hedging assets and liabilities, continued

b) Cash flow hedges

Cash flow hedges cover exposure to the cash flow variations attributable to a risk associated with a specific transaction that is very likely to be executed, that may have material effects on the results of the Company.

c) Hedging of the net investment in a business abroad:

To-date, the Company has not classified hedges for the amount related to the entity’s share as presented in its financial statements, in the business net assets.

10.4

Financial liabilities

Other current and non-current financial liabilities

As of June 30, 2012 and December 31, 2011, the detail is as follows:

	06/30/2012						12/31/2011
	Current		Non-current		Total		Current		Non-current		Total
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$

Bank loans		161,482		329,278		490,760		141,436		329,150		470,586
Obligations with the public (bonds payable)		19,146		1,037,815		1,056,961		17,129		907,877		925,006
Other financial liabilities		5,455		-		5,455		2,443		-		2,443
Total		186,083		1,367,093		1,553,176		161,008		1,237,027		1,398,035

Current and non-current loans assumed

As of June 30, 2012 and December 31, 2011, the detail is as follows:

	06/30/2012		12/31/2011
	ThUS$		ThUS$

Long-term loans		329,278		329,150

Short-term loans		160,490		140,538
Current portion of long-term loans		992		898
Short-term loans and current portion of long-term loans		161,482		141,436
Total loans assumed		490,760		470,586

Notes to the consolidated financial statements as of June 30, 2012

Note 10 - Financial instruments (continued)

10.4

Financial liabilities, continued

Bank loans, current:

As of June 30, 2012 and December 31, 2011, the detail of this caption is as follows:

Debtor			Creditor			Currency								06/30/2012 Current maturities
Tax ID No.	Subsidiary	Country	Tax ID No.	Financial institution	Country	or adjustment index	Amortization	Effective rate			Nominal rate			Up to 90 days ThUS$			91 days to 1 year ThUS$			Total ThUS$
93.007.000-9	SQM.S.A.	Chile	97.030.000-7	Banco Estado	Chile	US$	Upon maturity		1.70	%		1.70	%		-			20,001			20,001
93.007.000-9	SQM.S.A.	Chile	97.004.000-5	Banco de Chile	Chile	US$	Upon maturity		2.01	%		2.01	%		196			20,000			20,196
93.007.000-9	SQM S.A.	Chile	Foreign	Banco Estado NY Branch	United States	US$	Upon maturity		3.11	%		2.83	%		-			682			682
93.007.000-9	SQM S.A.	Chile	Foreign	JP Morgan Chase Bank	United States	US$	Upon maturity		1.61	%		1.61	%		-			20,073			20,073
79.626.800-K	SQM Salar S.A.	Chile	97.032.000-8	Banco BBVA Chile	Chile	US$	Upon maturity		1.90	%		1.90	%		-			20,049			20,049
79.626.800-K	SQM Salar S.A.	Chile	97.004.000-5	Banco de Chile	Chile	US$	Upon maturity		1.45	%		1.45	%		20,082			-			20,082
79.626.800-K	SQM Salar S.A.	Chile	97.018.000-1	Scotiabank Sud Americano	Chile	US$	Upon maturity		1.19	%		1.19	%		38			20,000			20,038
Foreign	Royal Seed Trading Corporation A.V.V.	Aruba	Foreign	Bank of America	United States	US$	Upon maturity		1.93	%		1.63	%		-			149			149
Foreign	Royal Seed Trading Corporation A.V.V.	Aruba	Foreign	Export Development Canada	United States	US$	Upon maturity		1.89	%		1.69	%		-			20			20
Foreign	Royal Seed Trading Corporation A.V.V.	Aruba	Foreign	Scotiabank & Trust (Cayman) Ltd.	Cayman Islands	US$	Upon maturity		1.98	%		1.59	%		244			-			244
Foreign	Royal Seed Trading Corporation A.V.V.	Aruba	Foreign	The Bank of Tokyo-Mitsubishi UFJ, Lda. (New York)	United States	US$	Upon maturity		1.69	%		1.38	%		-			151			151
79.947.100-0	SQM Industrial S.A.	Chile	97.030.000-7	Banco Estado	Chile	US$	Upon maturity		1.64	%		1.64	%		-			20,005			20,005
79.947.100-0	SQM Industrial S.A.	Chile	97.018.000-1	Scotiabank Sud Americano	Chile	US$	Upon maturity		1.19	%		1.19	%		47			20,000			20,047
Total															20,607			141,130			161,737
Borrowing costs															(61	)		(194	)		(255	)
Total															20,546			140,936			161,482

Notes to the consolidated financial statements as of June 30, 2012

Note 10 - Financial instruments (continued)

10.4

Financial liabilities, continued

Debtor			Creditor			Currency								12/31/2011 Current maturities
Tax ID No.	Subsidiary	Country	Tax ID No.	Financial institution	Country	or adjustment index	Amortization	Effective rate			Nominal Rate			Up to 90 days ThUS$			91 days to 1 year ThUS$			Total ThUS$
93.007.000-9	SQM.S.A.	Chile	97.032.000-8	Banco BBVA Chile	United States	US$	Upon maturity		1.00	%		1.00	%		20,094			-			20,094
93.007.000-9	SQM.S.A.	Chile	97.030.000-7	Banco Estado	United States	US$	Upon maturity		0.95	%		0.95	%		20,089			-			20,089
93.007.000-9	SQM S.A.	Chile	Foreign	Banco Estado NY Branch	United States	US$	Upon maturity		2.95	%		2.72	%		-			645			645
79.626.800-K	SQM Salar S.A.	Chile	97.030.000-7	Banco Estado	Chile	US$	Upon maturity		1.24	%		1.24	%		-			20,114			20,114
79.626.800-K	SQM Salar S.A.	Chile	97.004.000-5	Banco de Chile	Chile	US$	Upon maturity		1.03	%		1.03	%		20,085			-			20,085
79.626.800-K	SQM Salar S.A.	Chile	97.018.000-1	Scotiabank Sud Americano	Chile	US$	Upon maturity		0.75	%		0.75	%		48			20,000			20,048
Foreign	Royal Seed Trading Corporation A.V.V.	Aruba	Foreign	Bank of America	United States	US$	Upon maturity		1.74	%		1.47	%		-			140			140
Foreign	Royal Seed Trading Corporation A.V.V.	Aruba	Foreign	Export Development Canada	United States	US$	Upon maturity		1.95	%		1.75	%		-			24			24
Foreign	Royal Seed Trading Corporation A.V.V.	Aruba	Foreign	Scotiabank & Trust (Cayman) Ltd.	Cayman Islands	US$	Upon maturity		1.66	%		1.35	%		207			-			207
Foreign	Royal Seed Trading Corporation A.V.V.	Aruba	Foreign	The Bank of Tokyo-Mitsubishi UFJ, Lda. (New York)	United States	US$	Upon maturity		1.51	%		1.23	%		-			137			137
79.947.100-0	SQM Industrial S.A.	Chile	97.004.000-5	Banco de Chile	Chile	US$	Upon maturity		1.58	%		1.58	%		-			20,057			20,057
79.947.100-0	SQM Industrial S.A.	Chile	97.018.000-1	Scotiabank Sud Americano	Chile	US$	Upon maturity		0.70	%		0.70	%		51			20,000			20,051
Total															60,574			81,117			141,691
Borrowing costs															(61	)		(194	)		(255	)
Total															60,513			80,923			141,436

Notes to the consolidated financial statements as of June 30, 2012

Note 10 - Financial instruments (continued)

10.4

Financial liabilities, continued

Unsecured obligations, current:

As of June 30, 2012 and December 31, 2011, the detail of current unsecured interest-bearing obligations is composed of promissory notes and bonds, as follows:

Bonds

Debtor									Periodicity									06/30/2012 Current maturities
TAX ID No.	Subsidiary	Country	Number of registration or ID of the instrument		Series		Maturity date	Adjustment index for the bond	Payment of interest		Repayment	Effective rate			Nominal rate			Up to 90 days ThUS$			91 days to 1 year ThUS$			Total ThUS$

93.007.000-9	SQM S.A	Chile		184		Single	10/15/2012	US$		Semi-annual	Upon maturity		6.78	%		6.13	%		-			2,544			2,544
93.007.000-9	SQM S.A	Chile		184		Single	10/21/2012	US$		Semi-annual	Upon maturity		5.94	%		5.50	%		-			2,630			2,630
93.007.000-9	SQM S.A	Chile		446		C	12/01/2012	UF		Semi-annual	Semi-annual		6.55	%		4.00	%		-			7,072			7,072
93.007.000-9	SQM S.A	Chile		563		G	07/05/2012	Ch$		Semi-annual	Upon maturity		7.76	%		7.00	%		1,401			-			1,401
93.007.000-9	SQM S.A	Chile		564		H	07/05/2012	UF		Semi-annual	Semi-annual		5.96	%		4.90	%		4,247			-			4,247
93.007.000-9	SQM S.A	Chile		563		I	10/01/2012	UF		Semi-annual	Upon maturity		6.35	%		3.00	%		-			495			495
93.007.000-9	SQM S.A	Chile		563		J	10/01/2012	Ch$		Semi-annual	Upon maturity		5.94	%		5.50	%		-			1,383			1,383
93.007.000-9	SQM S.A.	Chile		700		M	08/01/2012	UF		Semi-annual	Upon maturity		3.56	%		3.30	%		608			-			608
93.007.000-9	SQM S.A.	Chile		699		O	08/01/2012	UF		Semi-annual	Upon maturity		3.89	%		3,80	%		1,049			-			1,049
				Total															7,305			14,124			21,429
				Bond issue costs															(470	)		(1,813	)		(2,283	)
				Total															6,835			12,311			19,146

Effective rates of bonds in Chilean pesos and UF are expressed and calculated in U.S. dollars based on the flows agreed in Cross Currency Swap Agreements.

Notes to the consolidated financial statements as of June 30, 2012

Note 10 - Financial instruments (continued)

10.4

Financial liabilities, continued

Debtor									Periodicity									12/31/2011 Current maturities
Tax ID No.	Subsidiary	Country	Number of registration or ID of the instrument		Series		Maturity date	Adjustment index for the bond	Payment of interest		Repayment	Effective rate			Nominal rate			Up to 90 days ThUS$			91 days to 1 year ThUS$			Total ThUS$

93.007.000-9	SQM S.A	Chile		184		Single	04/15/2012	US$		Semi-annual	Upon maturity		6.75	%		6.13	%		-			2,577			2,577
93.007.000-9	SQM S.A	Chile		184		Single	04/21/2012	US$		Semi-annual	Upon maturity		5.94	%		5.50	%		-			2,667			2,667
93.007.000-9	SQM S.A	Chile		446		C	06/01/2012	UF		Semi-annual	Semi-annual		6.59	%		4.00	%		-			6,754			6,754
93.007.000-9	SQM S.A	Chile		563		G	01/05/2012	Ch$		Semi-annual	Upon maturity		7.10	%		7.00	%		1,354			-			1,354
93.007.000-9	SQM S.A	Chile		564		H	01/05/2012	UF		Semi-annual	Semi-annual		6.01	%		4.90	%		4,045			-			4,045
93.007.000-9	SQM S.A	Chile		563		I	04/01/2012	UF		Semi-annual	Upon maturity		6.22	%		3.00	%		-			477			477
93.007.000-9	SQM S.A	Chile		563		J	04/01/2012	Ch$		Semi-annual	Upon maturity		5.81	%		5.50	%		-			1,351			1,351
				Total															5,399			13,826			19,225
				Bond issue costs															(276	)		(1,820	)		(2,096	)
				Total															5,123			12,006			17,129

Types of non-current interest-bearing loans

Non-current interest-bearing loans as of June 30, 2012 and December 31, 2011 are detailed as follows:

Non-current interest-bearing bank loans

Debtor			Creditor			Currency								06/30/2012 Years to maturity
Tax ID No.	Subsidiary	Country	Tax ID No.	Financial institution	Country	or adjustment index	Repayment	Effective rate			Nominal rate			1 to 3 ThUS$			3 to 5 ThUS$			Over 5 ThUS$		Total ThUS$
93.007.000-9	SQM S.A.	Chile	Foreign	Banco Estado NY Branch	United States	US$	Upon maturity		3.11	%		2.83	%		140,000			-			-		140,000
Foreign	Royal Seed Trading Corporation A.V.V.	Aruba	Foreign	Scotiabank & Trust (Cayman) Ltd.	Cayman Islands	US$	Upon maturity		1.98	%		1.59	%		50,000			-			-		50,000
Foreign	Royal Seed Trading Corporation A.V.V.	Aruba	Foreign	Bank of America	United States	US$	Upon maturity		1.93	%		1.63	%		-			40,000			-		40,000
Foreign	Royal Seed Trading Corporation A.V.V.	Aruba	Foreign	Export Development	Cayman Islands	US$	Upon maturity		1.89	%		1.69	%		-			50,000			-		50,000
Foreign	Royal Seed Trading Corporation A.V.V.	Aruba	Foreign	The Bank of Tokyo-Mitsubishi UFJ, Ltd (New York)	United States	US$	Upon maturity		1.69	%		1.38	%		-			50,000			-		50,000
Total															190,000			140,000			-		330,000
Borrowing costs															(73	)		(649	)		-		(722	)
Total															189,927			139,351			-		329,278

Notes to the consolidated financial statements as of June 30, 2012

Note 10 - Financial instruments (continued)

10.4

Financial liabilities, continued

Debtor			Creditor			Currency or								12/31/2011 Years to maturity
Tax ID No.	Subsidiary	Country	Tax ID No.	Financial institution	Country	adjustment index	Repayment	Effective rate			Nominal rate			1 to 3 ThUS$			3 to 5 ThUS$			Over 5 ThUS$		Total ThUS$
93.007.000-9	SQM S.A.	Chile	Foreign	Banco Estado NY Branch	United States	US$	Upon maturity		2.95	%		2.72	%		140,000			-			-		140,000
Foreign	Royal Seed Trading Corporation A.V.V.	Aruba	Foreign	Scotiabank & Trust (Cayman) Ltd.	Cayman Islands	US$	Upon maturity		1.66	%		1.35	%		50,000			-			-		50,000
Foreign	Royal Seed Trading Corporation A.V.V.	Aruba	Foreign	Bank of America	United States	US$	Upon maturity		1.74	%		1.47	%		-			40,000			-		40,000
Foreign	Royal Seed Trading Corporation A.V.V.	Aruba	Foreign	Export Development	Cayman Islands	US$	Upon maturity		1.95	%		1.74	%		-			50,000			-		50,000
Foreign	Royal Seed Trading Corporation A.V.V.	Aruba	Foreign	The Bank of Tokyo-Mitsubishi UFJ, Ltd (New York)	United States	US$	Upon maturity		1.51	%		1.23	%		-			50,000			-		50,000
Total															190,000			140,000			-		330,000
Borrowing costs															(104	)		(746	)		-		(850	)
Total															189,896			139,254			-		329,150

Non-current unsecured interest-bearing bonds

The breakdown of non-current unsecured interest-bearing bonds as of June 30, 2012 and December 31, 2011 is detailed as follows:

Debtor								Periodicity												06/30/2012 Current maturities
Tax ID No.	Subsidiary	Country	Number of registration or ID of the instrument	Series		Maturity date	Currency or adjustment index	Payment of interest		Repayment	Effective rate			Nominal rate			1 to 3 years ThUS$			3 to 5 years ThUS$			Over 5 years ThUS$			Total ThUS$

93.007.000-9	SQM S.A	Chile	184		Single	04/15/2016	US$		Semi-annual	Upon maturity		6.78	%		6.13	%		-			200,000			-			200,000
93.007.000-9	SQM S.A	Chile	184		Single	04/21/2020	US$		Semi-annual	Upon maturity		5.94	%		5.50	%		-			-			250,000			250,000
93.007.000-9	SQM S.A	Chile	446		C	12/01/2026	UF		Semi-annual	Semi-annual		6.55	%		4.00	%		13,529			13,529			64,262			91,320
93.007.000-9	SQM S.A	Chile	564		H	01/05/2030	UF		Semi-annual	Semi-annual		5.96	%		4.90	%		-			-			180,385			180,385
93.007.000-9	SQM S.A	Chile	563		G	01/05/2014	Ch$		Semi-annual	Upon maturity		7.76	%		7.00	%		41,853			-			-			41,853
93.007.000-9	SQM S.A	Chile	563		I	04/01/2014	UF		Semi-annual	Upon maturity		6.35	%		3.00	%		67,645			-			-			67,645
93.007.000-9	SQM S.A	Chile	563		J	04/01/2014	Ch$		Semi-annual	Upon maturity		5.94	%		5.50	%		103,636			-			-			103,636
93.007.000-9	SQM S.A.	Chile	700		M	02/01/2017	UF		Semi-annual	Upon maturity		3.56	%		3.30	%		-			45,096			-			45,096
93.007.000-9	SQM S.A.	Chile	699		O	02/01/2033	UF		Semi-annual	Upon maturity		3.89	%		3.80	%		-			-			67,645			67,645
			Total															226,663			258,625			562,292			1,047,580
			Bond issue costs															(1,167	)		(1,627	)		(6,971	)		(9,765	)
			Total															225,496			256,998			555,321			1,037,815

Notes to the consolidated financial statements as of June 30, 2012

Note 10 - Financial instruments (continued)

10.4

Financial liabilities, continued

Debtor									Periodicity												12/31/2011 Current maturities
Tax ID No.	Subsidiary	Country	Number of registration or ID of the instrument		Series		Maturity date	Currency or adjustment index	Payment of interest		Repayment	Effective rate			Nominal rate			1 to 3 years ThUS$			3 to 5 years ThUS$			Over 5 years ThUS$			Total ThUS$

93.007.000-9	SQM S.A	Chile		184		Single	04/15/2016	US$		Semi-annual	Upon maturity		6.75	%		6.13	%		-			200,000			-			200,000
93.007.000-9	SQM S.A	Chile		184		Single	04/21/2020	US$		Semi-annual	Upon maturity		5.94	%		5.50	%		-			-			250,000			250,000
93.007.000-9	SQM S.A	Chile		446		C	12/01/2026	UF		Semi-annual	Semi-annual		6.59	%		4.00	%		12,881			12,881			64,408			90,170
93.007.000-9	SQM S.A	Chile		564		H	01/05/2030	UF		Semi-annual	Semi-annual		6.01	%		4.90	%		-			-			171,753			171,753
93.007.000-9	SQM S.A	Chile		563		G	01/05/2014	Ch$		Semi-annual	Upon maturity		7.10	%		7.00	%		40,446			-			-			40,446
93.007.000-9	SQM S.A	Chile		563		I	04/01/2014	UF		Semi-annual	Upon maturity		6.22	%		3.00	%		64,408			-			-			64,408
93.007.000-9	SQM S.A	Chile		563		J	04/01/2014	Ch$		Semi-annual	Upon maturity		5.81	%		5.50	%		100,152			-			-			100,152
				Total															217,887			212,881			486,161			916,929
				Bond issue costs															(1,700	)		(1,322	)		(6,030	)		(9,052	)
				Total															216,187			211,559			480,131			907,877

Notes to the consolidated financial statements as of June 30, 2012

Note 10 - Financial instruments (continued)

10.4

Financial liabilities, continued

Additional information

Bonds

As of June 30, 2012 and December 31, 2011, ThUS$19,146 and ThUS$17,129, respectively are presented at short-term related to principal, current portion plus interest accrued at that date, not including bond issue costs. At the non-current portion, the Company presented ThUS$1,037,815 as of June 30, 2012 and ThUS$907,877 as of December 31, 2011 related to principal installments of Series C bonds, single Series bonds, Series G bonds, Series H bonds, Series I bonds, Series J bonds and single series second issue bonds.

As of June 30, 2012 and December 31, 2011, the details of each issue are as follows

Series “C” bonds

On January 25, 2006, the Company placed Series C bonds for UF 3,000,000 (ThUS$101,918) at an annual rate of 4.00%.

As of June 30, 2012 and December 31, 2011, the Company has made the following payments with a charge to the Series C bonds:

Payments made	06/30/2012		12/31/2011
	ThUS$		ThUS$
Principal		3,276		6,678
Interest		1,946		4,169

Single series bonds

On April 5, 2006, the Company placed Single Series bonds for ThUS$200,000 at an annual rate of 6.125% under "Rule 144 and regulation S of the U.S. Securities Act of 1933."

As of June 30, 2012 and December 31, 2011, the Company has made the following payments with a charge to the Single Series bonds:

		06/30/2012 ThUS$				12/31/2011 ThUS$
Payments of interest			6,125				12,250

Notes to the consolidated financial statements as of June 30, 2012

Note 10 - Financial instruments (continued)

10.4

Financial liabilities, continued

Series “G” and “H” bonds

On January 13, 2009, the Company placed two bond series in the domestic market, Series H for UF 4,000,000 (ThUS$139,216) at an annual interest rate of 4.9% at a term of 21 years with payment of principal beginning in 2019 and Series G for ThCh$ 21,000,000 (ThUS$34,146), which was placed at a term of 5 years with a single payment at the maturity of the term and an annual interest rate of 7%.

As of June 30, 2012 and December 31, 2011, 2010, the Company has made the following payments with a charge to the Series G and H bonds:

	06/30/2012 ThUS$		12/31/2011 ThUS$
Payment of interest, Series G bonds		1,405		3,094
Payment of interest, Series H bonds		4,199		8,989

Series “J” and “I” bonds

On May 8, 2009, the Company placed two bond series in the domestic market, Series J for ThCh$52,000,000 (ThUS$92,456) which was placed at a term of 5 years with single payment at the expiration date of the term and annual interest rate of 5.5% and Series I for UF 1,500,000 (ThUS$56,051) which was placed at a term of 5 years with single payment at the maturity of the term and annual interest rate of 3.00%.

As of June 30, 2012 and December 31, 2011, the Company has made the following payments with a charge to the Series J and I bonds:

	06/30/2012 ThUS$		12/31/2011 ThUS$
Payment of interest, Series J bonds		2,881		5,665
Payment of interest, Series I bonds		1,028		1,954

Notes to the consolidated financial statements as of June 30, 2012

Note 10 - Financial instruments (continued)

10.4

Financial liabilities, continued

Single series bonds, second issue

On April 21, 2010, the Company informed the Chilean Superintendence of Securities and Insurance of its placement in international markets of an unsecured bond of ThUS$250,000 with a maturity of 10 years beginning on the aforementioned date with annual interest rate of 5.5% and destined to refinance long-term liabilities

As of June 30, 2012 and December 31, 2011, the detail of payments charged to the line of single series bonds, second issue is as follows:

		30/06/2012 ThUS$				31/12/2011 ThUS$
Interest payment			6,875				13,750

Series “M” and “O” bonds

In April 4th, 2012 the company placed two series of bonds in the national market. The “series M” of UF 1,000,000 (MUS$46,601) was placed at a period of 5 years, with a sole amortization when the term ends and with an annual interest rate of 3.3%, and the “series O” of UF 1,500,000 (MUS$69,901) that was placed at a term of 21 years, with a sole amortization when the term expires and with an annual interest rate of 3.80%.

As of June 30^th 2012, there are no payments made with charge to the bonds line series M and O.

10.5

Trade and other payables

	30/06/2012						31/12/2011
	Current		Non- current		Total		Current		Non- current		Total
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$

Accounts payable		180,153		-		180,153		182,552		-		182,552
Deferred income		-		-		-		-		-		-
Retained (or accrued)		533		-		533		480		-		480
Total		180,686		-		180,686		183,032		-		183,032

Purchase commitments held by the Company are recognized as liabilities when the goods and services are received by the Company. As of June 30, 2012, the Company has purchase orders amounting to ThUS$ 50,130 (ThUS$ 79,045 as of December 31, 2011).

100

Notes to the consolidated financial statements as of June 30, 2012

Note 10 - Financial instruments (continued)

10.6

Financial liabilities at fair value through profit or loss

This balance relates to derivative instruments measured at their fair value, which has generated balances against the Company. The detail by type of instrument is as follows:

	06/30/2012		Effect on profit or loss as of 06/30/2012			12/31/2011		Effect on profit or loss as of 12/31/2011
Financial liabilities at fair value through profit or loss	ThUS$		ThUS$			ThUS$		ThUS$

Current
Derivative instruments (forward)		2,571		(612	)		1,053		(1,053	)
Derivative instruments (options)		1,701		(665	)		1,036		(1,036	)
Derivative instruments (IRS)		1,183		26			355		(205	)
		5,455		(1,251	)		2,444		(2,294	)

Balances in the column effect on profit or loss consider the annual affects of agreements which were in force as of June 30, 2012.

101

Notes to the consolidated financial statements as of June 30, 2012

Note 10 - Financial instruments (continued)

10.7

Financial asset and liability categories

Financial Assets

	30/06/2012						31/12/2011
	Current		Non-current		Total		Current		Non-current		Total
Description of financial assets	Amount ThUS$		Amount ThUS$		Amount ThUS$		Amount ThUS$		Amount ThUS$		Amount ThUS$

Financial assets at fair value through profit or loss, classified as held-for-trading		328,193		-		328,193		129,069		-		129,069
Financial assets at fair value through profit or loss, mandatorily measured at fair value		11,435		-		11,435		14,455		-		14,455
Financial assets at fair value through profit or loss		339,628		-		339,628		143,524		-		143,524
Investments held to maturity		-		115		115		-		117		117
Loans and receivables		488,347		1,335		489,682		412,062		1,070		413,132
Financial assets at fair value through other comprehensive income		74,355		-		74,355		56,108		-		56,108
Total financial assets		902,330		1,450		903,780		611,694		1,187		612,881

102

Notes to the consolidated financial statements as of June 30, 2012

Note 10 - Financial instruments (continued)

10.7

Financial asset and liability categories (continued)

Financial liabilities

	06/30/2012						12/31/2011
	Current		Non-current		Total		Current		Non-current		Total
Description of financial liabilities at fair value through profit or loss	Amount ThUS$		Amount ThUS$		Amount ThUS$		Amount ThUS$		Amount ThUS$		Amount ThUS$

Financial liabilities at fair value through profit or loss, designed as such at initial recognition		5,455		-		5,455		2,443		-		2,443
Financial liabilities at fair value through profit or loss		5,455		-		5,455		2,443		-		2,443

Financial liabilities measured at amortized cost		361,314		1,367,093		1,728,407		341,597		1,237,027		1,578,624
Total financial liabilities		366,769		1,367,093		1,733,862		344,040		1,237,027		1,581,067

103

Notes to the consolidated financial statements as of June 30, 2012

Note 10 - Financial instruments (continued)

10.8

Financial assets pledged as guarantee

On November 4, 2004, Isapre Norte Grande maintains a guarantee equivalent to the total amount owed to its members and healthcare providers, which is managed and maintained by Banco de Chile.

As of June 30, 2012 and December 31, 2011, assets pledged as guarantees are as follows:

	06/30/2012		12/31/2011
Restricted cash	ThUS$		ThUS$
Isapre Norte Grande Ltda.		504		428
Total		504		428

10.9

Estimated fair value of financial instruments and derivative financial instruments

As required by IFRS 7, the following information is presented for the disclosure of the estimated fair value of financial assets and liabilities.

Although inputs represent Management's best estimate, they are subjective and involve significant estimates related to the current economic and market conditions, as well as risk features.

Methodologies and assumptions used depend on the risk terms and characteristics of instruments and include the following as a summary:

Cash equivalent approximates fair value due to the short-term maturities of these instruments.

Other current financial liabilities are considered at fair value equal to their carrying values.

For interest-bearing liabilities with original maturity of more than a year, fair values are calculated at discounting contractual cash flows at their original current market with similar terms.

For forward and swap contracts, fair value is determined using quoted market prices of financial instruments with similar characteristics.

104

Notes to the consolidated financial statements as of June 30, 2012

Note 10 - Financial instruments (continued)

10.9

Estimated fair value of financial instruments and financial derivatives, continued

The detail of the Company’s instruments at carrying value and estimated fair value is as follows:

	06/30/2012				12/31/2011
	Carrying value		(*) Fair value		Carrying value		(*) Fair value
	ThUS$		ThUS$		ThUS$		ThUS$
Cash and cash equivalents		415,279		415,279		444,992		444,992
Current trade and other receivables		488,347		488,347		412,062		412,062
Other current financial assets:
- Time deposits		328,193		328,193		129,069		129,069
- Derivative instruments		11,435		11,435		14,455		14,455
- Current hedging assets		36,076		36,076		25,737		25,737
Total other current financial assets		375,704		375,704		169,261		169,261
Other non-current financial assets:		115		115		117		117
Non-current hedging assets		38,282		38,282		30,371		30,371
Total other non-current financial assets		38,397		38,397		30,488		30,488
Other current financial liabilities:
- Bank loans		161,482		161,482		141,436		141,436
- Derivative instruments		4,383		4,383		2,174		2,174
- Hedging liabilities		1,072		1,072		269		269
- Unsecured obligations		19,146		19,146		17,129		17,129
Total other current financial liabilities		186,083		186,083		161,008		161,008
Current and non-current accounts payable		180,686		180,686		183,032		183,032
Other non-current financial liabilities:
- Bank loans		329,278		343,713		329,150		348,218
- Unsecured obligations		1,037,815		1,100,277		907,877		1,074,907
Total other non-current financial liabilities:		1,367,093		1,443,990		1,237,027		1,423,125

Fair value hierarchy

Fair value hierarchies are as follows:

Level 1: when only quoted (unadjusted) prices have been used in active markets

Level 2: when in a phase in the valuation process variable other than prices quoted in Level 1 have been used which are directly observable in markets.

Level 3: when in a phase in the valuation process variable which are not based in observable market data have been used.

The valuation techniques used to determine the fair value of our hedging instruments are those indicated in levels 1 and 2.

105

Notes to the consolidated financial statements as of June 30, 2012

Note 10 - Financial instruments (continued)

10.10

Nature and scope of risks arising from financing instruments

As indicated in paragraphs 33 to 42 of IFRS 7 the disclosure of information associated with the nature and scope of risks arising from financial instruments is presented in Note 4 - Financial Risk Management.

Note 11 – Equity-accounted investees

11.1 Investment in associates recognized according to the equity method of accounting

As of June 30, 2012, and December 31, 2011, in accordance with criteria established in Note 2.6 and Note 3.3, investment in associates recognized according to the equity method of accounting and joint ventures are as follows:

		Investment				Share on profit (loss) of equity accounted investees
	Note No.	06/30/2012 ThUS$		12/31/2011 ThUS$		06/30/2012 ThUS$			06/30/2011 ThUS$

Equity-accounted investees	11.1 to 11.3		44,445		43,057		14,062			9,427
Joint ventures	12 to 12.4		22,335		17,637		(762	)		612

Total			66,780		60,694		13,300			10,039

106

Notes to the consolidated financial statements as of June 30, 2012

Note 11 – Equity-accounted investees (continued)

11.2

Assets, liabilities, revenue and expenses of associates

06-30-2012
Tax ID No.	Associate	Country of incorporation	Functional currency	Assets ThUS$		Liabilities ThUS$		Revenue ThUS$		Net profit (loss) ThUS$
77.557.430-5	Sales de Magnesio Ltda.	Chile	Chilean Peso		5,070		1,171		6,695		820
Foreign	Abu Dhabi Fertilizer Industries WWL	Arabia	U.A.E Dirham		25,541		6,315		23,894		2,110
Foreign	Doktor Tarsa Tarim Sanayi AS	Turkey	Turkish Lira		81,949		53,710		23,418		3,913
Foreign	Ajay North America	United States	US Dollar		47,995		10,646		50,015		14,049
Foreign	Ajay Europe SARL	France	Euro		33,035		15,247		46,515		7,539
Foreign	SQM Eastmed Turkey	Turkey	Euro		438		264		-		-
Foreign	SQM Thailand Co. Ltd.	Thailand	Thai Bath		19,807		16,024		8,806		(33	)
	Total				213,835		103,377		159,343		28,398

12-31-2011
Tax ID No.	Associate	Country of incorporation	Functional currency	Assets ThUS$		Liabilities ThUS$		Revenue ThUS$		Net profit (loss) ThUS$
77.557.430-5	Sales de Magnesio Ltda.	Chile	Chilean Peso		4,484		1,595		8,652		1,335
Foreign	Abu Dhabi Fertilizer Industries WWL	Arabia	U.A.E Dirham		22,964		5,849		38,024		2,985
Foreign	Doktor Tarsa Tarim Sanayi AS	Turkey	Turkish Lira		78,090		53,752		67,205		5,160
Foreign	Ajay North America	United States	US Dollar		47,866		9,876		80,923		23,689
Foreign	Ajay Europe SARL	France	Euro		32,332		14,600		59,189		8,384
Foreign	Mirs Specialty Fertilizers	Egypt	Egyptian pound		5,476		2,802		-		(266	)
Foreign	SQM Eastmed Turkey	Turkey	Euro		438		264		29		(94	)
Foreign	SQM Thailand Co. Ltd.	Thailand	Thai Bath		8,130		4,227		10,895		175

	Total				199,780		92,965		264,917		41,368

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

107

Notes to the consolidated financial statements as of June 30, 2012

Note 11 – Investment in Associates (continued)

11.3

Detail of investments in associates

The Company’s ownership in its associates is detailed as follows:

Associate	Main activities of the associate	Ownership %			Investment		Investment		Share on profit (loss) of equity- accounted investees
					06/30/2012		12/31/2011		06/30/2012			06/30/2011
					ThUS$		ThUS$		ThUS$			ThUS$
Sales de Magnesio Ltda.	Commercialization of magnesium salts.		50	%		1,950		1,444		410			376
Abu Dhabi Fertilizer Industries Co. W.W.L.	Distribution and commercialization of specialty plant nutrients in the Middle East.		50	%		9,159		8,558		1,055			905
Ajay North America L.L.C	Production and commercialization of iodine derivatives.		49	%		14,779		14,866		6,884			3,610
Doktor Tarsa Tarim Sanayi AS	Distribution and commercialization of specialty plant nutrients in Turkey.		50	%		14,119		12,169		1,957			2,209
Nutrisi Holding N.V.	Holding company		50	%		-		-		-			895
Ajay Europe SARL	Production and distribution of iodine and iodine derivatives.		50	%		2,838		3,102		3,769			1,437
Misr Specialty Fertilizers S.A.E.	Production and commercialization of liquid specialty plant nutrients for Egypt.		47.4857	%		-		1,270		-			(46	)
SQM Eastmed Turkey	Production and commercialization of specialty products.		50	%		87		87		-			(17	)
SQM Thailand Co. Ltd.	Distribution and commercialization of specialty plant nutrients.		40	%		1,513		1,561		(13	)		58
Total						44,445		43,057		14,062			9,427

The Company has no participation in unrecognized losses in investments in associates

The Company presents no investments not accounted for according to the equity method of accounting

The equity method was applied to the Statement of Financial Position as of june 30, 2012 and December 31, 2011.

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

108

Notes to the consolidated financial statements as of June 30, 2012

Note 12 - Joint Ventures

12.1 Policy for accounting for joint ventures in a Parent’s separate financial statements

The method for the recognition of joint ventures in which participation is initially recorded at cost and subsequently adjusted considering changes after the acquisition in the portion of the entity’s net assets of the entity which correspond to the investor. Profit or loss for the period of the investor will collect the portion which belongs to it in the results of the controlled entity as a whole

12.2 Disclosures on interest in joint ventures

Operations conducted in 2012

During March 2012, the Company Coromandel SQM increased its capital by ThUS$394. This Company has an ownership of 50% in Soquimich European Holding B.V

In June 7 2012, the subsidiary SQM Industrial S.A., made a capital increase of MUS$4,000, in Sichuan SQM Migao Chemical Fertilizer Co. Ltda.

Operations conducted in 2011

On January 27, 2011, the subsidiary SQM Industrial S.A. conducted a contribution amounting to ThUS$2,500 in Sichuan SQM Migao Chemical Fertilizer Co.

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

109

Notes to the consolidated financial statements as of June 30, 2012

Note 12 - Policy for accounting for joint ventures in a Parent’s separate financial statements (continued)

12.3

Detail of assets, liabilities and profit or loss of significant investments in joint ventures by company as of June 30, 2012 and as of December 31, 2011, respectively:

06/30/2012
Tax ID No.	Joint venture	Country of incorporation	Functional currency	Current ThUS$		Asset Non -current ThUS$		Total ThUS$		Current ThUS$		Liability Non- current ThUS$		Total ThUS$		Revenue ThUS$		Ownership- related expenses ThUS$			Profit or loss ThUS$
Foreign	Sichuan SQM Migao Chemical Fertilizers Co Ltda.	China	US Dollar		16,605		10,290		26,895		2,454		-		2,454		11,371		(11,215	)		157
Foreign	Coromandel SQM	India	Indian Rupee		2,292		1,527		3,819		2,016		-		2,016		749		(886	)		(137	)
Foreign	SQM Vitas Fzco.	United Arab Emirates	U.A.E. Dirham		22,122		9,636		31,758		632		-		632		9,984		(11,668	)		(1,684	)
Foreign	SQM Qindao-Star Co. Ltda.	China	US Dollar		2,533		335		2,868		690		-		690		3,011		(2,897	)		114
	Total				43,552		21,788		65,340		5,792		-		5,792		25,115		(26,666	)		(1,550	)

31/12/2011
Tax ID No.	Joint venture	Country of incorporation	Functional currency	Current ThUS$		Asset Non -current ThUS$		Total ThUS$		Current ThUS$		Liability Non- current ThUS$		Total ThUS$		Revenue ThUS$		Ownership- related expenses ThUS$			Profit or loss ThUS$
Foreign	Sichuan SQM Migao Chemical Fertilizers Co Ltda.	China	US Dollar		18,014		10,576		28,590		8,306		-		8,306		23,818		(23,455	)		363
Foreign	Coromandel SQM	India	Indian Rupee		559		1,074		1,633		62		-		62		23		(60	)		(37	)
Foreign	SQM Vitas Fzco.	United Arab Emirates	U.A.E. Dirham		24,887		8,920		33,807		1,005		-		1,005		25,207		(26,266	)		(1,059	)
Foreign	SQM Qindao-Star Co. Ltda.	China	US Dollar		1,974		403		2,377		314		-		314		5,065		(5,028	)		37
	Total				45,434		20,973		66,407		9,687		-		9,687		54,113		(54,809	)		(696	)

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

110

Notes to the consolidated financial statements as of June 30, 2012

Note 12 - Policy for accounting for joint ventures in a Parent’s separate financial statements (continued)

12.4

Detail of investments in joint ventures:

Joint venture	Main activities of the joint venture	Ownership %			Investment 06/30/2012 ThUS$		Investment 12/31/2011 ThUS$
Coromandel SQM	Production and distribution of potassium nitrate.		50	%		676		786
Sichuan SQM Migao Chemical Fertilizer Co. Ltda.	Production and distribution of soluble fertilizers.		50	%		14,256		10,142
SQM Vitas Fzco.	Production and commercialization of specialty plant and animal nutrition and industrial hygiene.		50	%		6,314		5,677
SQM Quindao-Star Co. Ltda.	Production and distribution of nutrient plant solutions with specialties NPK soluble		50	%		1,089		1,032
Total						22,335		17,637

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

111

Notes to the consolidated financial statements as of June 30, 2012

Note 13 - Intangible assets and goodwill

13.1 Balances

	06/30/2012		12/31/2011
Balances	ThUS$		ThUS$

Intangible assets other than goodwill		4,041		4,316
Goodwill		38,605		38,605

Total		42,646		42,921

13.2 Disclosures on intangible assets and goodwill

Intangible assets relate to goodwill, water rights, trademarks, industrial patents, rights of way and software.

Balances and movements in the main classes of intangible assets as of June 30, 2012, and December 31, 2011 are detailed as follows:

		06/30/2012
Intangible assets and goodwill	Useful life	Gross amount ThUS$		Accumulated Amortization ThUS$			Net Value ThUS$
Trademarks	Finite		3,821		(3,821	)		-
Software	Finite		3,628		(1,935	)		1,693
Intellectual property rights, patents and other industrial property rights, service and exploitation rights	Finite		1,198		(790	)		408
Intellectual property rights, patents and other industrial property rights, service and exploitation rights	Indefinite		3,538		(1,994	)		1,544
Other intangible assets	Indefinite		548		(152	)		396
Intangible assets other than goodwill			12,733		(8,692	)		4,041

Goodwill	Indefinite		40,178		(1,573	)		38,605

Total intangible assets and goodwill			52,911		(10,265	)		42,646

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

112

Notes to the consolidated financial statements as of June 30, 2012

Note 13 - Intangible assets and goodwill (continued)

13.2 Disclosures on intangible assets and goodwill, continued

				12/31/2011
Intangible assets and goodwill	Useful life	Gross amount ThUS$		Accumulated Amortization ThUS$			Net Value ThUS$
Trademarks	Finite		3,821		(3,821	)		-
Software	Finite		3,476		(1,538	)		1,938
Intellectual property rights, patents and other industrial property rights, service and exploitation rights	Finite		1,198		(758	)		440
Intellectual property rights, patents and other industrial property rights, service and exploitation rights	Indefinite		3,536		(1,994	)		1,542
Other intangible assets	Indefinite		548		(152	)		396
Intangible assets other than goodwill			12,579		(8,263	)		4,316

Goodwill	Indefinite		40,178		(1,573	)		38,605

Total intangible assets and goodwill			52,757		(9,836	)		42,921

Estimated useful lives or amortization rates used for finite identifiable intangible assets

Finite useful life, measures the lifetime or the number of productive units or other similar which constitute its useful life.

The estimated useful life for software is 3 years for other finite useful life assets, the period in which they are amortized relate to periods defined by contracts or rights which generate them.

Indefinite useful life intangible assets mainly relate to water rights and rights of way, which were obtained as indefinite

Method used to express the amortization of identifiable intangible assets (life or rate)

The method used to express the amortization is useful life.

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

113

Notes to the consolidated financial statements as of June 30, 2012

Note 13 - Intangible assets and goodwill (continued)

13.2 Disclosures on intangible assets and goodwill, continued

Minimum and maximum amortization lives or rates of intangible assets:

Estimated useful lives or amortization rate	Minimum life or rate	Maximum life or rate

Intellectual property rights, patents and other industrial property rights, service and exploitation rights	Indefinite	Indefinite
Other intangible assets	Indefinite	Indefinite
Intellectual property rights, patents and other industrial property rights, service and exploitation rights	1 year	16 years
Trademarks	1 year	5 years
Software	2 years	3 years

Information to be disclosed on assets generated internally

The Company has no intangible assets generated internally.

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

114

Notes to the consolidated financial statements as of June 30, 2012

Note 13 - Intangible assets and goodwill (continued)

13.2 Disclosures on intangible assets and goodwill, continued

Movements in identifiable intangible assets as of June 30, 2012:

Movements in identifiable intangible assets	Trademarks Net ThUS$		Software, Net ThUS$			Intellectual property rights, patents and other industrial property rights, service and exploitation right, rights of way, Net ThUS$			Intellectual property rights, patents and other industrial property rights, service and exploitation right, rights of way, Net ThUS$		Other intangible assets, Net ThUS$		Goodwill, Net ThUS$		Identifiable intangible assets, Net ThUS$

Opening balance		-		1,938			440			1,542		396		38,605		42,921
Additions				152			-			2		-		-		154
Amortization				(397	)		(32	)		-		-		-		(429	)
Other increases (decreases)							-			-		-		-		-

Final balance		-		1,693			408			1,544		396		38,605		42,646

Movements in identifiable intangible assets as of December 31, 2011:

Movements in identifiable intangible assets	Trademarks Net ThUS$			Software, Net ThUS$			Intellectual property rights, patents and other industrial property rights, service and exploitation right, rights of way, Net ThUS$			Intellectual property rights, patents and other industrial property rights, service and exploitation right, rights of way, Net ThUS$			Other intangible assets, Net ThUS$		Goodwill, Net ThUS$		Identifiable intangible assets, Net ThUS$

Opening balance		4			823			501			1,546			396		38,388		41,658
Additions		-			1,812			-			-			-		217		2,029
Amortization		(4	)		(697	)		(61	)		-			-		-		(762	)
Other increases (decreases)		-			-			-			(4	)		-		-		(4	)

Final balance		-			1,938			440			1,542			396		38,605		42,921

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

115

Notes to the consolidated financial statements as of June 30, 2012

Note 14 - Property, plant and equipment

As of June 30, 2012, and December 31, 2011, the detail of property, plant and equipment is as follows:

14.1

Classes of property, plant and equipment

Description of classes of property, plant and equipment	06/30/2012 ThUS$		12/31/2011 ThUS$

Property, plant and equipment, net

Land		109,006		108,992
Buildings		141,811		146,532
Machinery		391,301		424,460
Transport equipment		77,380		82,822
Furniture and fixtures		4,914		5,015
Office equipment		5,138		5,312
Constructions in progress		469,390		297,996
Other property, plant and equipment		648,892		683,913
Total		1,847,832		1,755,042
Property, plant and equipment, gross

Land		109,006		108,992
Buildings		293,067		291,401
Machinery		977,071		972,179
Transport equipment		202,990		199,998
Furniture and fixtures		19,737		19,090
Office equipment		35,130		34,480
Constructions in progress		469,390		297,996
Other property, plant and equipment		1,199,371		1,194,765
Total		3,305,762		3,118,901

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

116

Notes to the consolidated financial statements as of June 30, 2012

Note 14 - Property, plant and equipment (continued)

14.1

Classes of property, plant and equipment, continued

	06/30/2012 ThUS$		12/31/2011 ThUS$
Accumulated depreciation and value impairment of property, plant and equipment, total
Accumulated depreciation and value impairment of buildings		151,256		144,869
Accumulated depreciation and value impairment of machinery		585,770		547,719
Accumulated depreciation and value impairment of transport equipment		125,610		117,176
Accumulated depreciation and value impairment of furniture and fixtures		14,823		14,075
Accumulated depreciation and value impairment of office equipment		29,992		29,168
Accumulated depreciation and value impairment of other property, plant and equipment		550,479		510,852
Total		1,457,930		1,363,859

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

117

Notes to the consolidated financial statements as of June 30, 2012

Note 14 - Property, plant and equipment (continued)

14.2

Reconciliation of changes in property, plant and equipment by class as of June 30, 2012 and December 31, 2011:

Reconciliation entries of changes in property, plant and equipment by class as of June 30, 2012	Land		Buildings, net			Machinery, net			Transport equipment, net			Furniture and fixtures, net			Office equipment, net			Construction in progress			Other property, plant and equipment, net			Property, plant and equipment net
	ThUS$		ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$

Opening balance		108,992		146,532			424,460			82,822			5,015			5,312			297,996			683,913			1,755,042

Changes
Additions		-		-			212			27			70			148			196,351			531			197,339
Divestitures		-		-			(14	)		-			-			-			(795	)		-			(809	)
Depreciation expense		-		(6,387	)		(37,982	)		(8,505	)		(747	)		(927	)		-			(39,693	)		(94,241	)
Increase(decrease) in foreign currency exchange		14		-			2			7			-			(9	)		-			31			45
Reclassifications		-		-			-			-			-			-			-			-			-
Other increases (decreases) (*)		-		1,666			4,623			3,029			576			614			(24,162	)		4,110			(9,544	)

Total changes		14		(4,721	)		(33,159	)		(5,442	)		(101	)		(174	)		171,394			(35,021	)		92,790

Ending balance		109,006		141,811			391,301			77,380			4,914			5,138			469,390			648,892			1,847,832

(*) The net balance of Other increases (decreases) corresponds to: 1) investment plan expenses which are expensed to profit or loss (forming part of cost of sales and other expenses per function, as appropriate), 2) the variation representing the purchase and use of materials and spare parts and 3) projects corresponding mainly to exploration expenditures and stain development.

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

118

Notes to the consolidated financial statements as of June 30, 2012

Note 14 - Property, plant and equipment (continued)

14.2

Reconciliation of changes in property, plant and equipment by class as of June 30, 2012 and December 31, 2011, continued:

Reconciliation entries of changes in property, plant and equipment by class as of December 31, 2011	Land			Buildings, net			Machinery, net			Transport equipment, net			Furniture and fixtures, net			Office equipment, net			Construction in progress			Other property, plant and equipment, net			Property, plant and equipment net
	ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$

Opening balance		107,869			88,320			295,467			48,936			4,450			5,705			356,551			546,674			1,453,972

Changes
Additions		1,251			178			424			558			39			302			474,042			1,054			477,848
Divestitures		(85	)		(1,371	)		(64	)		(451	)		-			-			-			-			(1,971	)
Depreciation expense		-			(11,477	)		(97,046	)		(14,902	)		(1,281	)		(2,053	)		-			(69,137	)		(195,896	)
Increase(decrease) in foreign currency exchange		(42	)		-			1			(23	)		-			122			-			(24	)		34
Reclassifications					69,410			228,116			48,717			1,805			1,442			(546,769	)		197,279			-
Other increases (decreases) (*)		(1	)		1,472			(2,438	)		(13	)		2			(206	)		14,172			8,067			21,055

Total changes		1,123			58,212			128,993			33,886			565			(393	)		(58,555	)		137,239			301,070

Ending balance		108,992			146,532			424,460			82,822			5,015			5,312			297,996			683,913			1,755,042

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

119

Notes to the consolidated financial statements as of June 30, 2012

Note 14 - Property, plant and equipment (continued)

14.3

Detail of property, plant and equipment pledged as guarantee

There are no restrictions in title or guarantees for the compliance with obligations which affect property, plant and equipment.

14.4

Additional Information

Interest capitalized in construction-in-progress

The amount capitalized for this concept amounted to ThUS$ 7,077 as of June 30, 2012 and ThUS$ 22,249 as of December 31, 2011.

Financing costs are not capitalized for periods which exceed the normal term of acquisition, construction or installation of the asset, such as the case of delays, interruptions or temporary suspension of the project due to technical, financial or other issues, which prevent that the asset is maintained in good conditions for its use

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

120

Notes to the consolidated financial statements as of June 30, 2012

Note 15 – Employee benefits

15.1

Provisions for employee benefits

	06/30/2012		12/31/2011
Classes of benefits and expenses by employee	ThUS$		ThUS$
Current
Profit sharing and bonuses		21,838		30,074
Total		21,838		30,074

Non-current
Profit sharing and bonuses		4,780		4,083
Severance indemnities		30,247		28,188
Pension Plan		1,413		1,413
Total		36,440		33,684

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

121

Notes to the consolidated financial statements as of June 30, 2012

Note 15 Employee benefits (continued)

15.2

Policies on defined benefit plan

This policy is applied to all benefits received for services provided by the Company's employees.

Short-term benefits for active employees are represented by salaries, social welfare benefits, paid time-off, sickness leaves and other leaves, profit sharing and incentives and non-monetary benefits; e.g., healthcare service, housing, subsidized or free goods or services. These will be paid in a term which does not exceed twelve months.

The Company only provides compensation and benefits to active employees, with the exemption of SQM North America which applies the definitions under 15.4 below.

For each incentive bonus delivered to the Company’s employees, there will be a disbursement in the first quarter of the following year and this will be calculated based on Profit for the period at the end of each period applying a factor obtained subsequent to the employee appraisal process.

Employee benefits include retention bonuses for the Company’s executives, which are linked to the Company’s share price and it is paid in cash. The short-term portion is presented as provision for current employee benefits and the long-term portion as non-current.

The bonus provided to the Company’s directors is calculated based on Profit for the period at each year-end and will consider the application of a percentage factor.

The benefit related to vacations (short-term benefits to employees, current), which is provided in the Labor Code which indicates that employees with more than a year of service will be entitled to annual holidays for a period not lower than fifteen paid business days. The Company provides the benefit of two additional vacation days.

Staff severance indemnities are agreed and payable based on the last salary for each year of service for the Company or with certain maximum limits in respect to the number of years to be considered or in respect to monetary terms. In general, this benefit is payable when the employee or worker ceases to provide his/her services to the Company and the right for its collection can be acquired because of different causes, as indicated in the respective agreements; e.g., retirement, dismissal, voluntary retirement, incapacity or disability, death, etc.

Law No. 19,728 published on May 14, 2001 which became effective on October 1, 2002 required “Compulsory Unemployment Insurance” in favor of all depending employees regulated by the Chilean Labor Code. Article 5 of this law provided the financing of this insurance through monthly contribution payments by both the employee and the employer.

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

122

Notes to the consolidated financial statements as of June 30, 2012

Note 15 - Employee benefits (continued)

15.3

Other long-term benefits

The other long-term benefits relate to staff severance indemnities and are recorded at their actuarial value.

	06/30/2012		12/31/2011
Staff severance indemnities at actuarial value	ThUS$		ThUS$
Staff severance indemnities, Chile		29,628		27,574
Other obligations in companies elsewhere		619		614
Total other non-current liabilities		30,247		28,188

SQM North America’s pensions plan		1,413		1,413
Total post employment obligations		1,413		1,413

Staff severance indemnities have been calculated under the actuarial assessment method of the Company’s obligations with respect to staff severance indemnities, which relate to defined benefit plans which consist of days of remuneration per year served at the time of retirement under conditions agreed in the respective agreements established between the Company and its employees.

Under this benefit plan, the Company retains the obligation for the payment of staff severance indemnities related to retirements without establishing a separate fund with specific assets, which is referred to as not funded. The discount interest rate of expected flows to be used was 6%.

Benefit payment conditions

The staff severance indemnity benefit relates to remuneration days for year worked for the Company with no limit of salary or years of services for the Company, when employees cease to work for the Company due to turnover or death. In this case, the maximum age for men is 65 years and 60 years old for women, which are the usual ages for retirement due to achieving the senior citizen age according to the Chilean pensions system provided in Decree Law 3,500 of 1980.

Methodology

The determination of the obligation for benefits under IAS 19, Projected Benefit Obligation (PBO) is described as follows:

To determine the Company's total liability, we used a mathematical simulation model which was programmed using a computer and which processed the situation of each employee on an individual basis.

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

123

Notes to the consolidated financial statements as of June 30, 2012

Note 15 - Employee benefits (continued)

15.3

Other long-term benefits, continued

This model considered months as discrete time; i.e., the Company determined the age of each person and his/her salary on a monthly basis according to the growth rate. Thus, information on each person was simulated from the beginning of the life of his/her employment contract or when he/she started earning benefits up to the month in which it reaches the normal retirement age, generating in each period the possible retirement according to the Company’s turnover rate and the mortality rate according to the age reached. When he/she reaches the retirement age, the employee finishes his/her service for the Company and receives indemnity related to retirement due to old age.

The methodology followed to determine the accrual for all the employees adhered to agreements has considered turnover rates and the mortality rate RV-2010 established by the Chilean Superintendence of Securities and Insurance to calculate pension-related life insurance reserves in Chile according to the Accumulated Benefit Valuation or Accrued Cost of Benefit Method. This methodology is established in IAS 19 on Retirement Benefit Costs.

15.4

Post-employment benefit obligations

Our subsidiary SQM North America, has established with its employees a pension plan until 2002 called “SQM North America Retirement Income Plan”, which obligation is calculated measuring the expected future forecasted staff severance indemnity obligation using a net salary gradual rate of restatements for inflation, mortality and turnover assumptions discounting the resulting amounts at present value using the interest rate defined by the authorities for 2012 and 2011.

Since 2003, SQM North America offers to its employees benefits related to pension plans based on the 401-K system, which do not generate obligations for the Company.

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

124

Notes to the consolidated financial statements as of June 30, 2012

Note 15 - Employee benefits (continued)

15.5

Staff severance indemnities

As of June 30, 2012 and December 31, 2011, severance indemnities calculated at the actuarial value are as follows:

	2012 ThUS$			2011 ThUS$
Opening balance		(28,188	)		(27,208	)
Current cost of service		(3,153	)		(7,871	)
Interest cost		123			(1,106	)
Actuarial gain/loss		(44	)		(151	)
Exchange rate difference		(903	)		2,693
Contributions paid		1,918			5,455
Balance		(30,247	)		(28,188	)

The liability recorded for staff severance indemnity is valued at the actuarial value method, using the following actuarial assumptions:

	06/30/2012			12/31/2011

Mortality rate		RV - 2011			RV - 2010
Actual annual interest rate		6	%		6	%
Voluntary retirement rotation rate:
Men		0.9	%		0.9	%	annual
Women		1.53	%		1.53	%	annual
Salary increase		3.0	%		3.0	%	annual
Retirement age:
Men		65			65		years
Women		60			60		years

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

125

Notes to the consolidated financial statements as of June 30, 2012

Note 16 – Executive compensation plan

The Company counts on a compensation plan for its executives, by means of the granting of payments based on the SQM share price change, paid in cash, and the executives may exercise their rights until the year 2016.

Characteristics of the plan

This compensation plan is related with the company performance through the price of the Series B SQM share (Santiago Stock Exchange)

Participants in this plan

This compensation plan includes 40 executives of the Company, who are entitled to this benefit, provided they stay with the Company during the dates these options are executed. The dates for exercising the options will be the first 7 calendar days of May following to the fiscal year.

Compensation

The compensation for each executive is the differential between the average prices of the share during April of each year compared to the base price established by Company’s management. The base price fixed by the Company for this compensation plan amounts to US$ 50 per share. The Company reserves the right to exchange that benefit by shares or share options.

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

126

Notes to the consolidated financial statements as of June 30, 2012

Note 16 - Executive compensation plan (continued)

The movement of the options in effect for the period, the average prices for the fiscal year of the options and the average contractual life of the options in effect as of June 30, 2012 and December 31, 2011 are the following:

Movement for the period	2012		2011
In effect as of January 1		2,340,000		3,370,025
Granted during the fiscal year
Exercised during the fiscal year		139,500		1,030,025
In circulation as of December 31		2,200,500		2,340,000
Average contractual life		42 months		48 months

The amounts accrued by the plan, as of June 30, 2012 and December 31, 2011, amount to:

	2012		2011
Effect on profit or loss	ThUS$		ThUS$
Amount accrued during the year		1,442		11,200

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

127

Notes to the consolidated financial statements as of June 30, 2012

Note 17 – Disclosures on equity

The detail and movements in the funds of equity accounts are shown in the consolidated statement of changes in equity.

17.1

Capital management

The main object of capital management relative to the administration of the Company’s financial debt and equity is to ensure the regular conduct of operations and business continuity in the long term, with the constant intention of maintaining an adequate level of liquidity and in compliance with the financial safeguards established in the debt contracts in force. Within this framework, decisions are made in order to maximize the value of SQM.

Capital management must comply with, among others, the limits contemplated in the Financing Policy approved Board of Directors, which establish a maximum consolidated indebtedness level of 1.5 times the debt/equity. This limit can only be exceeded only if the Company’s management has a written and previously granted authorization issued at the Extraordinary Shareholders’ Meeting.

In addition, capital management must comply with the external capital requirements imposed (or covenants) in its financial obligations, which regulate the indebtedness level in 1.4 times, in its more strict level.

In conjunction with the level of indebtedness, it is also important for the Company to maintain a comfortable profile of maturities for its financial obligations, to oversight the relation between its short-term financial obligations and the long-term maturities, and the relation they have with the Company’s asset distribution. Consequently, the Company has maintained a liquidity level of 3 times during the last periods.

The Company’s management controls capital management based on the following ratios:

CAPITAL MANAGEMENT	06/30/2012	12/31/2011	Description (1)	Calculation (1)

Net Financial Debt	723,910	753,410	Financial Debt – Financial Resources	Other current Financial Liabilities + Other Non-Current Financial Liabilities – Cash and Cash Equivalents – Other Current Financial Assets – Hedging Assets, non-current
Liquidity	4.14	3.11	Current Asset divided by Current Liability	Total Current Assets / Total Current Liabilities
Net Debt / Capitalization	0.25	0.29	Net Financial Debt divided by Total Equity	Net financial debt / ( Net financial debt + Total Equity)
ROE	29.6%	29.7%	Income divided by Total Equity	Total Income / Equity
ROA	26.5%	24.1%	EBITDA – Depreciation divided by Net Total Assets of financial resources less related parties investments	(Gross Income – Administrative Expenses)/ (Total Assets – Cash and Cash Equivalents – Other Current Financial Assets Other Non-Current Financial Assets – Equity-accounted Investees)
Indebtedness	0.93	1.08	Total Liability on Equity	Total Liabilities / Total Equity
			(1) Assumes the absolute value of the accounting records

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

128

Notes to the consolidated financial statements as of June 30, 2012

Note 17 - Disclosures on equity (continued)

17.1

Capital management, continued

The Company’s capital requirements change depending on variables such as: work capital requirements, of new investment financing and dividends, among others. The Company manages its capital structure and makes adjustments on the basis of the predominant economic conditions so as to mitigate the risks associated with adverse market conditions and take advantage of the opportunities there may be to improve the liquidity position.

There have been no changes in the capital management objectives or policy within the years reported in this document. No breaches of external requirements of capital imposed (or covenants) have been recorded.

17.2

Disclosures on preferred share capital

Issued share capital is divided into 263,196,524 fully paid and subscribed shares with no par value composed of 142,819,552 Series "A" shares and 120,376,972 Series “B” shares, where both series are preferred shares

The preferential voting rights for each series are detailed as follows:

Series “A”:

If the election of the Company’s President results in a tie vote, the Company's directors may vote once again, without the vote of the director elected by the Series B shareholders

Series “B”:

A general or extraordinary shareholders' meeting may be called at the request of shareholders representing 5% of the Company's Series B shares.

An extraordinary meeting of the Board of Directors may be called with or without the agreement of the Company's President, at the request of the director elected by Series B shareholders.

As of June 30, 2012, December 31, 2011, the Group does not maintain shares in the parent either directly or through its companies in which it has investments

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

129

Notes to the consolidated financial statements as of June 30, 2012

Note 17 – Disclosures on equity (continued)

17.2

Disclosures on preferred share capital (continued)

Detail of types of capital in preference shares:

Type of capital in preferred shares	06/30/2012				12/31/2011
Description of type of capital in preferred shares	Series A		Series B		Series A		Series B
Number of authorized shares		142,819,552		120,376,972		142,819,552		120,376,972
Number of fully subscribed and paid shares		142,819,552		120,376,972		142,819,552		120,376,972
Number of subscribed, partially paid shares		-		-		-		-
Par value of shares in ThUS$		0.9435		2.8464		0.9435		2.8464
Increase (decrease in the number of current shares		-		-		-		-
Number of current shares		-		-		-		-
Number of shares owned by the entity or its subsidiaries or associates		-		-		-		-
Number of shares whose issuance is reserved due to the existence of options or agreements to dispose shares		-		-		-		-
Capital amount in shares ThUS$		134,750		342,636		134,750		342,636
Amount of premium issuance ThUS$		-		-		-		-
Amount of reserves ThUS$		-		-		-		-
Total number of subscribed shares, total		142,819,552		120,376,972		142,819,552		120,376,972

As of June 30, 2011 and December 31, 2011, the Company has not placed any new issuances of shares on the market

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

130

Notes to the consolidated financial statements as of June 30, 2012

Note 17 - Disclosures on equity (continued)

17.3

Disclosures on reserves in equity

Reserves for currency exchange conversion

This balance reflects retained earnings for changes in the exchange rate, when converting financial statements of subsidiaries whose functional currency is from each company’s origin country and the presentation currency is the US dollar.

Reserve for cash flow hedges

The Company maintains as hedge instruments, financial derivatives related to obligations with the public issued in Unidades de Fomento and Chilean pesos. Changes from the fair value of derivatives designated and classified as hedges are recognized under this classification.

Reserve for actuarial gains or losses in defined benefit plans

Our subsidiary SQM North America has established pension plans for its retired employees that are calculated by measuring the projected obligation of IAS using a net salary progressive rate net of adjustments to inflation, mortality and turnover assumptions, deducting the resulting amounts at present value using a 6.5% interest rate for 2012 and 2011.

Other reserves

Corresponds to the acquisition of the subsidiary SQM Iberian S.A., which was already under ownership of the Company at the acquisition date (IAS27 R).

	06/30/2012 ThUS$			12/31/2011 ThUS$
Revaluation surplus
Reserve for currency exchange conversion		(608	)		(1,251	)
Reserve for cash flow hedge		(11,857	)		(10,230	)
Reserve for actuarial gains or losses in defined benefit plans		(2,954	)		(2,954	)
Reserve of gains and losses for new measurement of available-for-sale financial assets
Other reserves		(1,677	)		(1,677	)

Total other reserves		(17,096	)		(16,112	)

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

131

Notes to the consolidated financial statements as of June 30, 2012

Note 17 - Disclosures on equity (continued)

17.4

Dividend policies

As required by Article 79 of the Chilean Companies Act, unless otherwise decided by unanimous vote of the holders of issued and subscribed shares, we must distribute a cash dividend in an amount equal to at least 30% of our consolidated Profit for the period for year ended as of December 31, unless and except to the extent it has a deficit in retained earnings (losses not absorbed in prior years).

The policy of dividends defined by the Shareholders’ General Meeting for the commercial year 2012 is:

Distribution and payment in favor of each shareholder of a final dividend which will be equivalent to 50% of Profit for the period obtained in 2012

Distribution and payment, if possible during 2012, of a provisional dividend which will be recorded against the aforementioned final dividend. This provisional dividend will be paid probably during the last quarter of 2012 and its amount could not exceed 50% of the retained earnings for distribution obtained during 2012, which are reflected in the Company’s financial statements as of September 30, 2012.

The distribution and payment by the Company of the remaining balance of the final dividend related to Profit for the period for the 2012 commercial year in up to two installments, which will have to be effectively paid and distributed prior to June 30, 2013.

An amount equivalent to the remaining 50% of the Company’s Profit for the period for 2012 will be retained and destined to the financing of operations of one or more of the Company’s investment projects with no prejudice of the possible future capitalization of the entirety or a portion of this.

The Board of Directors does not consider the payment of any additional or interim dividends.

The Board of Directors considers as necessary to indicate that the aforementioned Dividends Policy correspond to the intention or expectation of the Board regarding this matter, Consequently, the enforcement of such Policy Dividends is necessarily conditioned to net incomes finally obtained, to the results indicating the Company’s regular forecasts or the existence of certain conditions that could affect them, Notwithstanding the above and to the extent that such policy dividend does not suffer a significant change, SQM S.A. will timely communicate its shareholders on this matter.

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

132

Notes to the consolidated financial statements as of June 30, 2012

Note 17 - Disclosures on equity (continued)

17.5

Provisional dividends

On November 22, 2011, it was reported to the Superintendence of Securities and Insurance that the Board of Directors of Sociedad Química y Minera de Chile S.A. (SQM), in its meeting on November 22, 2011, unanimously agreed to pay and distribute the provisional dividend referred to in SQM’s current “2011 Dividends Policy” which was informed to SQM’s General Annual Ordinary Shareholders Meeting that was held on April 28 of this year. This, for the essential purpose of being able to pay and distribute as of December 19, 2011, a provisional dividend of US$0.73329 per share –and which is approximately equivalent to the total amount of US$193 million and the latter corresponds to 50% of the distributable net income of the fiscal year 2011 that has been accrued at September 30, 2011. The above, is charged against the net income of said fiscal year, in favor of the Shareholders who appeared registered in SQM’s Shareholders Registry by the 5^th working day prior to December 19^th, 2011, and in its equivalent in Chilean pesos according to the value of the “Observed dollar” or “USA dollar” that appears published in the Official Gazette on December 13, 2011.

At the Annual Board of Directors meeting held on April 28, 2011, the Directors unanimously agreed to pay a final dividend of US$0.7259 per share in relation to net profit for the year. Notwithstanding the above, US$ 0.41794 per share was already paid as an interim dividend, and this amount should be subtracted from the final dividend detailed above, In line with this, the balance, amounting to US$ 0.30798 per share, will be paid and distributed among shareholders of the Company who are registered with their respective shareholders registry as of the fifth business day prior to the day in which this dividend will be paid.

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

133

Notes to the consolidated financial statements as of June 30, 2012

Note 17 - Disclosures on equity (continued)

17.5

Provisional dividends (continued)

Dividends presented deducted from equity are:

	06/30/2012 ThUS$		12/31/2011 ThUS$
Dividends attributable to owners of the parent		-		270,219
Dividends payable		-		81,325

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

134

Notes to the consolidated financial statements as of June 30, 2012

Note 18 – Provisions and other non-financial liabilities

18.1

Classes of provisions

	06/30/2012						12/31/2011
	Current		Non- current		Total		Current		Non- current		Total
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$

Provision for legal complaints (*)		4,567		3,000		7,567		4,571		3,000		7,571
Provision for dismantling, restoration and rehabilitation cost		-		3,814		3,814		-		3,724		3,724
Other provisions		11,863		-		11,863		12,366		1,871		14,237
Total		16,430		6,814		23,244		16,937		8,595		25,532

(*) Provisions for legal complaints relate to legal expenses for lawsuits whose resolution are pending, and correspond to funds estimated necessary to make the disbursement of expenses incurred for this purpose. This provision relates mainly to the litigation of its subsidiary located in Brazil and United States (see note 19.1) and other minor litigations.

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

135

Notes to the consolidated financial statements as of June 30, 2012

Note 18 - Provisions and other non-financial liabilities (continued)

18.2

Description of other provisions

Description of other provisions	06/30/2012 ThUS$		12/31/2011 ThUS$
Current provisions, other short-term provisions
Provision for tax loss in fiscal litigation		1,337		1,441
Royalties, agreement with CORFO (the Chilean Economic Development Agency)		6,962		6,800
Fine to Brazil		2,500		2,500
Indemnity Yara South Africa		-		624
Miscellaneous provisions		1,064		1,001
Total		11,863		12,366
Other long-term provisions
Mine closure		3,814		3,724
Indemnity South Africa		-		1,871
Total		3,814		5,595

18.3

Other non-financial liabilities, current

Description of other liabilities	06/30/2012 ThUS$		12/31/2011 ThUS$

Tax withholdings		932		9,837
VAT payable		4,891		21,087
Guarantees received		883		920
Accrual for dividend		-		81,325
Monthly tax provisional payments		18,675		11,239
Deferred income		47,879		15,284
Withholdings from employees and salaries payable		5,901		5,554
Accrued vacations		16,554		15,874
Other current liabilities		131		841
Total		95,846		161,961

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

136

Notes to the consolidated financial statements as of June 30, 2012

Note 18 - Provisions and other non-financial liabilities (continued)

18.3

Changes in provisions as of June 30, 2012

Description of items that gave rise to variations	Guarantee		Restructuring		Legal complaints			Onerous contracts		Provision for dismantling, restoration and rehabilitation cost		Other provisions			Total
	ThUS$		ThUS$		ThUS$			ThUS$		ThUS$		ThUS$			ThUS$

Total provisions, initial balance		-		-		7,571			-		3,724		14,237			25,532

Changes in provisions:

Additional provisions		-		-		-			-		90		7,405			7,495

Provision used		-		-		(4	)		-		-		(9,675	)		(9,679	)
Increase (decrease) in foreign currency translation		-		-		-			-		-		(104	)		(104	)

Total provisions, final balance		-		-		7,567			-		3,814		11,863			23,244

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

137

Notes to the consolidated financial statements as of June 30, 2012

Note 18 - Provisions and other non-financial liabilities (continued)

18.4

Changes in provisions as of December 31, 2011

Description of items that gave rise to variations	Guarantee		Restructuring		Legal complaints			Onerous contracts		Provision for dismantling, restoration and rehabilitation cost		Other provisions			Total
	ThUS$		ThUS$		ThUS$			ThUS$		ThUS$		ThUS$			ThUS$

Total provisions, initial balance		-		-		4,590			-		3,500		12,424			20,514

Changes in provisions:

Additional provisions		-		-		3,000			-		224		13,076			16,300

Provision used		-		-		(19	)		-		-		(11,080	)		(11,099	)
Increase (decrease) in foreign currency translation		-		-		-			-		-		(183	)		(183	)

Total provisions, final balance		-		-		7,571			-		3,724		14,237			25,532

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

138

Notes to the consolidated financial statements as of June 30, 2012

Note 18 - Provisions and other non-financial liabilities (continued)

18.5

Detail of main classes of provisions

Legal expenses: This provision depends on the pending resolution of a legal lawsuit, to pay the expenses associated to and incurred during such lawsuit (incurred mainly in Brazil and U.S.A.).

Tax accrual in tax litigation: This accrual relates to lawsuits pending resolution related to taxes in Brazil for two of our subsidiaries, SQM Brazil and NNC

CORFO (Economic Development Agency) Royalties agreement: Relates to the commercialization of mining properties that SQM Salar S.A. pays the Economic Development Agency for on a quarterly basis. The amount of the lease payable is calculated based on sales of products extracted from the Atacama Saltpeter deposit.

The settlement of the aforementioned amounts is performed on a quarterly basis.

To date, the Company and its subsidiaries have no significant uncertainties about the timing and amount of one class of provision.

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

139

Notes to the consolidated financial statements as of June 30, 2012

Note 19 - Contingencies and restrictions

According to note 18.1 the Company has only registered a provision for those lawsuits in which the probability to lose is “more likely than not”, The Company is party to lawsuits and other relevant legal actions that are detailed as follows:

19.1

Lawsuits and other relevant events

1.	Plaintiff	:	Compañía de Salitre y Yodo Soledad S.A.
	Defendant	:	Sociedad Química y Minera de Chile S.A.
	Date	:	December 1994
	Court	:	Civil Court of Pozo Almonte
	Reason	:	Nullity of mining concession Cesard 1 to 29
	Status	:	Lower court decision in favor of SQM. Appellate court decision pending
	Nominal value	:	ThUS$ 211

2.	Plaintiffs	:	JB Comércio de Fertilizantes e Defensivos Agrícolas Ltda. (JB)
	Defendant	:	Nitratos Naturais do Chile Ltda. (NNC)
	Date	:	December 1995
	Court	:	MM 1ª, Vara Civel de Comarca de Barueri, Brazil.
	Reason	:	Compensation claim filed by JB against NNC for having appointed a distributor in a territory of Brazil for which JB had an exclusive contract.
	Status	:	Lower court ruling against Nitratos Naturais do Chile Ltda. and recourse of appeal pending resolution.
	Nominal value	:	ThUS$1,800

3.	Plaintiff	:	Compañía Productora de Yodo y Sales S.A.
	Defendant	:	Sociedad Química y Minera de Chile S.A.
	Date	:	November 1999
	Court	:	Civil Court of Pozo Almonte
	Reason	:	Nullity of mining concession Paz II 1 to 25
	Status	:	First sentence in favor of SQM. Recourse of appeal pending resolution.
	Nominal value	:	ThUS$ 162

4.	Plaintiff	:	Compañía Productora de Yodo y Sales S.A.
	Defendant	:	Sociedad Química y Minera de Chile S.A.
	Date	:	November 1999
	Court	:	Civil Court in Pozo Almonte
	Reason	:	Nullity of mining concession Paz III 1 to 25
	Status	:	Lower court decision in favor of SQM. Appellate court decision pending
	Nominal value	:	ThUS$ 204

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

140

Notes to the consolidated financial statements as of June 30, 2012

Note 19 - Contingencies and restrictions (continued)

19.1 Lawsuits and other relevant events, continued

5.	Plaintiff	:	Nancy Erika Urra Muñoz
	Defendants	:	Fresia Flores Zamorano, Duratec-Vinilit S.A. and SQM S.A. and their insurers
	Date	:	December 2008
	Court	:	1st Civil Court of Santiago
	Reason	:	Labor Accident
	Status	:	Evidence
	Nominal value	:	ThUS$ 550

6.	Plaintiffs	:	Eduardo Fajardo Nuñez, Ana Maria Canales Poblete, Raquel Beltran Parra, Eduardo Fajardo Beltran and Martina Fajardo Beltran.
	Defendants	:	SQM Salar S.A. and insured parties
	Date	:	November 2009
	Court	:	20th Civil Court in Santiago
	Reason	:	Labor accident
	Status	:	Summons to hear the judgement.
	Nominal value	:	ThUS$ 1,880

7.	Plaintiffs	:	María Loreto Lorca Morales, Nathan Guerrero Lorca, Maryori Guerrero Lorca, Abraham Guerrero Lorca, Esteban Guerrero Lorca and María Sol Osorio Tapia et all
	Defendants	:	Gonzalo Daved Valenzuela, July Zamorano Avendaño, Comercial Transportes y Servicios Generales July Zamorano Avendaño E.I.R.L. And in solidum SQM S.A. and insurers
	Date	:	August 2010
	Court	:	2nd Civil Court of Iquique
	Reason	:	Claim for damages resulting from the crash of two trucks in July 2008 near Pozo Almonte, causing the death of Mr. Alberto Galleguillos Monardes And Mr. Fernando Guerrero Tapia
	Status	:	First sentence in favor of SQM S.A. Recourse period still open.
	Nominal value	:	ThUS$3,500

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

141

Notes to the consolidated financial statements as of June 30, 2012

Note 19 - Contingencies and restrictions (continued)

19.1

Lawsuits and other relevant events, continued

8.	Plaintiff	:	City of Pomona, California USA
	Defendant	:	SQM North America Corp (SQM NA)
			The lawsuit also was filed against Sociedad Química y Minera de Chile S.A. this lawsuit has not yet been notified to the Company
	Date	:	December 2010
	Court	:	United States District Court for the Central District of California
	Reason	:	Payment of expenses and other amount related to the treatment of groundwater to allow for consumption by removing the existing perchlorate in such groundwater and that supposedly come from Chilean fertilizer.
	Status	:	Withdrawal conditioned to the outcome pending of the appeal.
	Nominal value	:	Not possible to determine

9.	Plaintiff	:	City of Lindsay, California USA
	Defendant	:	SQM North America Corp (SQM NA)
			The lawsuit also was filed against Sociedad Química y Minera de Chile S.A. this lawsuit has not yet been notified to the Company
	Date	:	December 2010
	Court	:	United States District Court for the Eastern District of California
	Reason	:	Payment of expenses and other amount related to the treatment of groundwater to allow for consumption by removing the existing perchlorate in such groundwater and that supposedly come from Chilean fertilizer.
	Status	:	Claim.
	Nominal value	:	Not possible to determine

10.	Plaintiff	:	Metalúrgica FAT Limitada
	Defendant	:	SQM Salar S.A.
	Date	:	August 2011
	Court	:	9th Civil Court in Santiago
	Reason	:	Compensation for early termination of supply contract and installation of metal structures.
	Status	:	Evidence
	Nominal value	:	THUS$175

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

142

Notes to the consolidated financial statements as of June 30, 2012

Note 19 - Contingencies and restrictions (continued)

19.1

Lawsuits and other relevant events, continued

11.	Plaintiff	:	Sociedad Industrial Minera Nueva Victoria S.A. Company Union
	Defendant	:	SQM S.A. and SQM Industrial S.A.
	Date	:	December 2011
	Court	:	Labor Court of Pozo Almonte
	Reason	:	Alleged unpaid overtime
	Status	:	Audience (October 2012)
	Nominal value	:	ThUS$420

12.	Plaintiff	:	Juan Osvaldo Godoy Barraza
	Defendant	:	Renta Equipos Besalco Limitada and SQM S.A. and its insurers.
	Date	:	February 2012
	Court	:	Labor Court of San Miguel
	Reason	:	Labor accident. Claim for compensation of moral and material damages resulting from the accident that occurred on July 25, 2007 and that resulted in the partial handicap of the plaintiff following the tip over of the truck he drove in SQM S.A.'s premises in Pedro de Valdivia.
	Status	:	Sentencia condenatoria de primera instancia por $48.000.000 reunificación de jurusprudencia pendiente ante E. Corte Suprema.
	Nominal value	:	Approximately ThUS$100

13.	Plaintiff	:	Angelina Castillo Figueroa and others
	Defendant	:	SQM Nitratos S.A. and its assurers
	Date	:	June 2012
	Court	:	2nd Civil Court of Santiago
	Reason	:	Demand for damages for supposed civil liability not in the contract derived of the explosion occurred in September 6th 2010 near Baquedano, that caused the decease of six employees.
	Status	:	Answer to the Complaint
	Nominal value	:	ThUS$9.400

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

143

Notes to the consolidated financial statements as of June 30, 2012

Note 19 - Contingencies and restrictions (continued)

19.1

Lawsuits and other relevant events, continued

14.	Plaintiff	:	Nilda Ester Muñoz Muñoz y otros
	Defendant	:	Alejandro Reyes R., Transportes Transerik Limitada, Contructora Excon S.A. y SQM Salar S.A. and their assurers
	Date	:	Jul 2012
	Court	:	15th Civil Court of Santiago
	Reason	:	Claim for damages for suppose civil liability not in the contract derived from the accident happened in October 22nd 2010 at Salar de Atacama causing the death of Mr. Daniel Opazo Muñoz
	Status	:	Answer to the complaint
	Nominal value	:	ThUS$2,400

15.	Plaintiff	:	Sociedad industrial Seguel y Ortiz Limitada
	Defendant	:	SQM Salar S.A.
	Date	:	August 2012
	Court	:	Arbitral
	Reason	:	Indemnity for supposed damages derived of anticipated end of contract for services rendered.
	Status	:	Answer to the complaint
	Nominal value	:	ThUS$3,500

The Company and its subsidiaries have been involved and will probably continue being involved either as plaintiffs or defendants in certain judicial proceedings that have been and will be heard by the Arbitral or Ordinary Courts of Justice that will make the final decision. Those proceedings that are regulated by the appropriate legal regulations are intended to exercise or oppose certain actions or exceptions related to certain mining claims either granted or to be granted and that do not or will not affect in an essential manner the development of the Company and its subsidiaries.

Soquimich Comercial S.A. has been involved and will probably continue being involved either as plaintiff or defendant in certain judicial proceedings through which it intends to collect and receive the amounts owed, the total nominal value of which is approximately ThUS$ 700.

The Company has made efforts and continues making efforts to obtain payment of certain amounts that are still owed it on occasion of their activities. Such amounts will continue to be required using judicial or non-judicial means by the plaintiffs, and the actions and exercise related to these are currently in full force and effect.

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

144

Notes to the consolidated financial statements as of June 30, 2012

Note 19 - Contingencies and restrictions (continued)

19.1

Lawsuits and other relevant events, continued

The Company and its subsidiaries have not received legal notice of any claims other than those mentioned in paragraph I above. The claims detailed above seek to annul certain mining claims that were purchased by SQM S.A. and Subsidiaries, the proportional purchase value of which, with respect to the portion affected by the superimposition, exceeds the nominal and approximate amount of ThUS$ 150. The claims seek payment of certain amounts allegedly owed by the Company due to its own activities, which exceed the approximate, nominal and individual amount of ThUS$ 150.

19.2

Restrictions to the management or financial limits

Contracts for credits subscribed by SQM S.A. with national and foreign Banks and for bonds issuance in the local and international Market, require the Company the accomplishment of the following level of consolidated financial indicators, calculated for a mobile term which includes the last twelve months:

Keep a minimum patrimony of MUS$900,000.

Keep a connection between relación entr Net Financial Debt and EBITDA not superior to 3 times.

Keep a ratio of Total Debt Level not superior to 1,4 times. Level of Total Debt defined as the ratio Total Liabilities divided by Total Patrimony.

Keep a ration among the addition of the financial debt of the operative subsidiaries SQM Industrial S.A. and SQM Salar S.A., or of their respective legal successors, and the total of consolidated, and the consolidated current assets of the Issuer, not superior to 0,3 times.

As of June 30th 2012, the previously mentioned financial indicators present the following values:

Indicator	06/30/2012		12/31/2011
Equity MUS$		2,207,315		1,864,380
Net Financial Debt/EBITDA		0,66		0,79
Debt		0,93		1,08
Debt SQM Industrial and SQM Salar/Current Assets		0,04		0,05

Contracts corresponding to the issue of bonds, issued abroad, oblige the Company not to merge or sell any title whether total or substantial part of its asset, unless accomplishing acts from Chile or the United States of America, and that it assume, by means of a complementary contract, the obligations of SQM S.A., (ii) that immediately after the merge or sale there is no unaccomplishment of the issuer, and (iii) that the issuer has delivered a legal opinion indicating that the merge or sale and the complementary contract meet the requirements pointed out on the original contract..

Besides, SQM S.A. is obliged to deliver financial information, quarterly.

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

145

Notes to the consolidated financial statements as of June 30, 2012

Note 19 - Contingencies and restrictions (continued)

19.2

Restrictions to the management or financial limits, continued

The Company and its subsidiaries have accomplished and are accomplishing totally, all the limitations, restrictions and obligations above mentioned.

19.3

Commitments

The subsidiary SQM Salar S.A. has signed a rental contract with the Economic Development Agency (CORFO), which establishes that this subsidiary will pay rent to CORFO for the concept of commercialization of certain mining properties owned by CORFO and for the products resulting from this commercialization. The annual rent stated in the aforementioned contract is calculated on the basis of sales of each type of product. The contract is in force until 2030, and rent began being paid in 1996 reflecting an expense amount of ThUS$ 13,524 as of June 30, 2012 (ThUS$ 23,951 as of December 31, 2011).

19.4

Restricted or pledged cash

The subsidiary Isapre Norte Grande Ltda. in compliance with that established by the Chilean Superintendence of Healthcare, which regulates the running of pension-related health institutions, maintains a guarantee in financial instruments, delivered in deposits, custody and administration to Banco de Chile.

This guarantee, according to the regulations issued by the Chilean Superintendence of Healthcare is equivalent to the total sum owed to its members and medical providers, Banco de Chile reports the present value of the guarantee to the Chilean Superintendence of Healthcare and Isapre Norte Grande Ltda. on a daily basis. As of June 30, 2012, the guarantee amounts to ThUS$ 504.

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

146

Notes to the consolidated financial statements as of June 30, 2012

Note 19 - Contingencies and restrictions (continued)

19.5

Securities obtained from third parties

The main security received from third parties (distributors) to guarantee Soquimich Comercial S.A.’s compliance with obligations in contracts of commercial mandates for the distribution and sale of fertilizers amounted to ThUS$4.587 as of June 30, 2012; as of December 31, 2011 these amounted to ThUS $4,467 which is detailed as follows:

Entity name	06/30/2012 ThUS$		12/31/2011 ThUS$

Llanos y Wammes Soc. Com. Ltda		1,993		1,926
Fertglobal Chile Ltda.		1,594		1,541
Tattersall Agroinsumos S.A.		1,000		1,000

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

147

Notes to the consolidated financial statements as of June 30, 2012

Nota 19 - Contingencies and restrictions (continued)

19.6

Indirect guarantees

Guarantees in which there is no pending balance indirectly reflect that the respective guarantees are in force and approved by the Company's Board of Directors and have not been used by the respective subsidiary.

				Pending balances as of
Creditor of the guarantee	Debtor		Type of guarantee	the closing date of the financial statements
	Name	Relationship		06/30/2012 ThUS$	12/31/2011 ThUS$
Australian and New Zealand Bank	SQM North America Corp	Subsidiary	Bond		-
Australian and New Zealand Bank	SQM Europe N.V.	Subsidiary	Bond		-
Generale Bank	SQM North America Corp	Subsidiary	Bond		-
Generale Bank	SQM Europe N.V.	Subsidiary	Bond		-
Kredietbank	SQM North America Corp	Subsidiary	Bond		-
Kredietbank	SQM Europe N.V.	Subsidiary	Bond		-
Banks and financial institutions	SQM Investment Corp. N.V.	Subsidiary	Bond		-
Banks and financial institutions	SQM Europe N.V.	Subsidiary	Bond		-
Banks and financial institutions	SQM North America Corp	Subsidiary	Bond		-
Banks and financial institutions	Nitratos Naturais do Chile Ltda.	Subsidiary	Bond		-
Banks and financial institutions	SQM México S.A. de C.V.	Subsidiary	Bond		-
Banks and financial institutions	SQM Brasil Ltda.	Subsidiary	Bond		-
“BNP”	SQM Investment Corp. N.V.	Subsidiary	Bond		-
Sociedad Nacional de Mineria A.G.	SQM Potasio S.A.	Subsidiary	Bond		-
ING Capital LLC	Royal Seed Trading A..V.V.	Subsidiary	Bond		-
Scotiabank & Trust (Cayman) Ltd.	Royal Seed Trading A.V.V.	Subsidiary	Bond	50,244	50,207
Bank of America	Royal Seed Trading A.V.V.	Subsidiary	Bond	40,149	40,140
Export Development Canada	Royal Seed Trading A.V.V.	Subsidiary	Bond	50,020	50,024
The Bank of Tokyo-Mitsubishi UFJ Ltd.	Royal Seed Trading A.V.V.	Subsidiary	Bond	50,152	50,137
JP Morgan Chase Bank	SQM Industrial S.A.	Subsidiary	Bond		-
The Bank of Nova Scotia	SQM Investment Corp. N.V.	Subsidiary	Bond		-
Morgan Stanley Capital Services	SQM Investment Corp. N.V.	Subsidiary	Bond		-

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

148

Notes to the consolidated financial statements as of June 30, 2012

Note 20 - Revenue

As of June 30, 2012 and 2011, revenue is detailed as follows:

	January to june				April to june
Types of regular revenues	2012		2011		2012		2011
	ThUS$		ThUS$		ThUS$		ThUS$

Sales of goods		1,209,415		1,028,216		681,290		549,632
Provision of services		3,541		3,484		2,040		2,033
Total		1,212,956		1,031,700		683,330		551,665

Note 21 - Earnings per Share

Basic earnings per share are calculated by dividing net income attributable to the Company’s shareholders by the weighted average of the number of shares in circulation during that period,

As expressed, earnings per share are detailed as follows:

Basic earnings per share	06/30/2012 ThUS$		06/30/2011 ThUS$

Earnings (losses) attributable to owners of the parent		342,237		243,616

		06/30/2012 Units				06/30/2011 Units
Number of common shares in circulation			263,196,524				263,196,524

	06/30/2012		06/30/2011

Basic earnings per share (US$ per share)		1.3003		0.9256

The Company has not made any operation with a potential dilutive effect that assumes diluted earnings per share different from the basic earnings per share.

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

149

Notes to the consolidated financial statements as of June 30, 2012

Note 22 - Borrowing costs

The cost of interest is recognized as expenses in the year in which it is incurred, except for interest that is directly related to the acquisition and construction of tangible property, plant and equipment assets and that complies with the requirements of IAS 23. As of June 30, 2012, total interest expenses incurred amount to ThUS$26,458 (ThUS$22,618 as of June 30, 2011).

The Company capitalizes all interest costs directly related to the construction or to the acquisition of property, plant and equipment, which require a substantial time to be suitable for use.

Costs of capitalized interest, property, plant and equipment

The cost of capitalized interest is determined by applying the average or weighted average of all financing costs incurred by the Company to the monthly end balances of works-in-progress meeting the requirements of IAS 23.

The rates and costs for capitalized interest of property, plant and equipment are detailed as follows:

	06/30/2012			06/30/2011

Capitalization rate of costs for capitalized interest, property, plant and equipment		7	%		7	%
Amount of costs for interest capitalized in ThUS$		7,077			7,687

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

150

Notes to the consolidated financial statements as of June 30, 2012

Note 23 - Effect of fluctuations on the foreign currency exchange rates

Foreign currency exchange differences recognized in profit or loss except for financial instruments measured at fair value through profit or loss:

	06/30/2012 ThUS$			06/30/2011 ThUS$

Conversion foreign exchange gains (losses) recognized in the result of the year.		(15,305	)		(7,141	)
Conversion foreign exchange reserves attributable to the owners of the controlling entity.		643			10
Conversion foreign exchange reserves attributable to the non-controlling entity.		33			-

Reserves for foreign currency exchange differences:

As of June 30, 2012, and December 31, 2011, foreign currency exchange differences are detailed as follows:

Detail	06/30/2012 ThUS$			12/31/2011 ThUS$

Changes in equity generated through the equity method:
Comercial Hydro S.A.		937			937
SQMC Internacional Ltda.		29			23
Proinsa Ltda.		21			17
Agrorama Callegari Ltda.		121			102
Isapre Cruz del Norte Ltda.		70			55
Almacenes y Depósitos Ltda.		77			57
Sales de Magnesio Ltda.		97			48
Sociedad de Servicios de Salud S.A.		28			24
Agrorama S.A.		(9	)		(11	)
Doktor Tarsa		(1,159	)		(1,964	)
Nutrisi Holding		(42	)		(42	)
SQM Vitas Fzco		(315	)		(159	)
Ajay Europe		(205	)		(176	)
Misr Specialty Ferti		(39	)		(39	)
SQM Eastmed Turkey		(40	)		(40	)
Charlee SQM (Thailand) Co. Lta.		(82	)		(52	)
Coromandel SQM India		(61	)		(31	)
SQM Italia SRL		(36	)
Total		(608	)		(1,251	)

Functional and presentation currency

The functional currency in these companies corresponds to the currency of the country of origin of each entity, and its presentation currency is the US dollar.

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

151

Notes to the consolidated financial statements as of June 30, 2012

Note 23 - Effect of fluctuations on the foreign currency exchange rates (continued)

Reasons to use one presentation currency and a different functional currency

The total revenues of these subsidiaries are associated with the local currency.

The commercialization cost structure of these companies is affected by the local currency.

The equities of these companies are expressed in local currency (Chilean peso).

Note 24 - Environment

24.1

Disclosures of disbursements related to the environment

The Company is continuously concerned with protecting the environment both in its production processes and with respect to products manufactured. This commitment is supported by the principles indicated in the Company’s Sustainable Development Policy. The Company is currently operating under an Environmental Management System (EMS) that has allowed it to strengthen its environmental performance through the effective application of the Company’s Sustainable Development Policy.

Operations that use caliche as a raw material are carried out in desert areas with climatic conditions that are favorable for drying solids and evaporating liquids using solar energy. Operations involving the open-pit extraction of minerals, due to their low waste-to-mineral ratio, generate remaining deposits that slightly alter the environment, A portion of the ore extracted is crushed, a process in which particle emissions occur. Currently this operation is conducted only at the Pedro de Valdivia worksite and no ore crushing process is conducted in the Maria Elena sector.

Many of the Company’s products are shipped in bulk at the Port of Tocopilla. In 2007 the city of Tocopilla was declared a zone Saturated with MP10 Particles mainly due to the emissions from the electric power plants that operate in that city. In October 2010 the Decontamination Plan for Tocopilla was put in place. Accordingly, the Company has committed to taking several measures to mitigate the effects derived from bulk product movements in the port. These measures have been successfully implemented since 2007.

The Company carries out environmental follow-up and monitoring plans based on specialized scientific studies. Within this context, the Company entered into a contract with the National Forestry Corporation (CONAF) aimed at researching the activities of flamingo groups that live in the Salar de Atacama (Atacama Saltpeter Deposit) lagoons. Such research includes a population count of the birds, as well as breeding research. Environmental monitoring activities carried out by the Company at the Salar de Atacama and other systems in which it operates are supported by a number of studies that have integrated diverse scientific efforts from prestigious research centers, including Dictuc from the Pontificia Universidad Católica in Santiago and the School of Agricultural Science of the Universidad de Chile.

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

152

Notes to the consolidated financial statements as of June 30, 2012

Note 24 - Environment (continued)

24.1

Disclosures of disbursements related to the environment (continued)

Furthermore, within the framework of the environmental studies which the Company is conducting, the Company performs significant activities in relation to the recording of Pre-Columbian and historical cultural heritage, as well as the protection of heritage sites, in accordance with current Chilean laws. These activities have been especially performed in the areas surrounding Maria Elena and the Nueva Victoria plants. This effort is being accompanied by cultural initiatives within the community and the organization of exhibits in local and regional museums.

As emphasized in its Sustainable Development Policy, the Company strives to maintain positive relationships with the communities surrounding the locations in which it carries out its operations, as well as to participate in communities’ development by supporting joint projects and activities which help to improve the quality of life for residents. For this purpose, the Company has focused its efforts on activities involving the rescue of historical heritage, education and culture, as well as development, and in order to do so, it acts both individually and in conjunction with private and public entities.

24.2

Detail of information on disbursements related to the environment

The accumulated disbursements in which the Company incurred as of June 30, 2012 for the concept of investments in production processes, verification and control of compliance with ordinances and laws relative to industrial processes and facilities, including prior year disbursements related to these projects amounted to ThUS$ 16,497 and are detailed as follows:

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

153

Notes to the consolidated financial statements as of June 30, 2012

Note 24- Environment (continued)

24.2

Detail of information on disbursements related to the environment, continued

Accumulated expenses as of June 30, 2012

Identification of the Parent
or subsidiary

Name of the project with which the disbursement is
associated

Concept for which the
disbursement was made or
will be made

Asset /
Expense

Description of
the asset or
expense Item

Amount of
disbursement
for the Period
ThUS$

Actual or estimated
date on which
disbursements were or
will be made

SQM Industrial S.A.

Environmental Management (Expense as of March 2012)

Not classified

Expense

Not classified

653

12-31-2012

SQM Industrial S.A.

JQH9 – Purchase of Bertrams Boiler

Sustainability: Replacement of equipment

Asset

Development

08-01-2013

SQM Industrial S.A.

JQEZ – Change of Berrtrams Prilling Boiler CS

Sustainability: Replacement of equipment

Asset

Development

245

08-01-2013

SQM Industrial S.A.

FP55 - FPXA - Zone Mine EIS PB - PB Expansion EIS (Projects: Pampa Blanca Saltwater - Saltwater Stage I)

Sustainability

Asset

Development

1,290

12-31-2012

SQM Industrial S.A.

IQ8G – Improvement of Bureau of Exchange, offices and facilities

Sustainability

Asset

Not classified

12-31-2012

SQM Industrial S.A.

JQ8K – DIA Line 4 Floor Drying , Coya Sur (Project: Drying Line 4)

Capacity Expansion

Asset

Development

09-01-2012

SQM Industrial S.A.

JQB6 - EID Ground NPT4, Coya Sur (Project: NPTIV)

Capacity Expansion

Asset

Development

04-30-2012

SQM Industrial S.A.

MNYS - Measures of Technological Change Cultural Heritage Dissemination Maria Elena

Sustainability: Environment and Risk prevention

Asset

Not classified

12-31-2012

SQM Industrial S.A.

MP5W - TK's Fuel Standards

Sustainability

Asset

Not classified

708

12-31-2012

SQM Industrial S.A.

MPQU - Construction of Hazardous Chemical Supplies warehouse

Sustainability: Environment and Risk prevention

Asset

Development

204

12-31-2012

SQM Industrial S.A.

MQ8M - Reconditioning monitoring station ME

Sustainability: Renovation

Asset

Not classified

10-30-2012

SQM Industrial S.A.

MQAJ - Improvements to Camp Water and Sewage (P Contesse commitment to DDSS)

Not classified

Asset

Not classified

03-31-2012

SQM Industrial S.A.

MQBM - Archaeological Digging Deployment Maria Elena - Toco

Sustainability: Environment and Risk prevention

Asset - Expense

Not classified

12-31-2012

SQM Industrial S.A.

PPC1 - Remove switches park OCB sub 3 and 1/12 Pedro de Valdivia

Sustainability: Replacement of equipment

Asset - Expense

Not classified

120

12-31-2012

SQM Industrial S.A.

PPNK - Management of Ammonia PV stoppage plant

Sustainability: Environment and Risk prevention

Asset

Not classified

12-31-2012

SQM Industrial S.A.

PPZU - Standardize and certify Plant Fuel Tanks

Sustainability: Environment and Risk prevention

Asset - Expense

Not classified

1,117

12-31-2012

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

154

Notes to the consolidated financial statements as of June 30, 2012

Note 24- Environment (continued)

24.2

Detail of information on disbursements related to the environment, continued

Accumulated expenses as of June 30, 2012, continued

Identification of the Parent
or subsidiary

Name of the project with which the disbursement is
associated

Concept for which the
disbursement was made
or will be made

Asset /
Expense

Description of
the asset or
expense Item

Amount of
disbursement
for the Period
ThUS$

Actual or estimated
date on which
disbursements were or
will be made

SQM Industrial S.A.

SQ7X - Reach 2011-2013

Sustainability

Expense

Not classified

01-31-2014

SQM Industrial S.A.

TQ78 - motorized sweepers

Sustainability: Replacement of equipment

Asset

Development

208

06-30-2012

SQM Industrial S.A.

MQHF- Pilas ME Maintenance

Sustainability

Asset

Not classified

08-01-2013

SQM Industrial S.A.

MQK2- Elimination of PCBs I

Not classified

Asset/Expense

Not classified

03-31-2015

SQM Industrial S.A.

PQLV- Mine PV New Area (DIA Pedro de Valdivia Mine)

Ambient procedure

Asset

Not classified

03-31-2013

SQM S.A.

IQLR- Implem. Of Mitigation Measures Puquios Salar de llamara

Sustainability:Risk Prevention and Environment

Expense

Not classified

12-30-2012

SQM S.A.

MQLQ- Gas Washing System

Sustainability: Risk Prevention and Environment

Expense

Development

01-01-2013

SQM S.A.

AQ0A - Well Drilling 4 Uptake Change Point Tamarugal Pampa

Sustainability: Natural Resources

Asset

Development

534

12-31-2012

SQM S.A.

IPFT - Cultural Heritage Region I

Sustainability: Environment and Risk prevention

Expense

Not classified

128

03-31-2012

SQM S.A.

IPXE - Environmental Monitoring Plan Llamara Salt flat

Sustainability: Environment and Risk prevention

Expense

Not classified

573

12-31-2012

SQM S.A.

IPXF - Environmental Monitoring Plan Tamarugal Pampa

Sustainability: Environment and Risk prevention

Expense

Not classified

357

12-31-2012

SQM S.A.

IQ08 - PSA Llamara & Pampa Tamarugal

Sustainability: Natural Resources

Expense

Development

1,759

03-31-2012

SQM S.A.

IQ0C - Mine Area Enhancement NV

Sustainability: Environment and Risk prevention

Expense

Not classified

03-31-2012

SQM S.A.

IQ1K - Construction of 3 observation wells in Sur Viejo

Sustainability: Natural Resources

Asset

Development

195

03-31-2012

SQM S.A.

IQ1M - PSA Re-injection of water to Puquios Llamara

Not classified

Asset

Not classified

994

03-31-2012

SQM S.A.

IQ3S - Hazardous Materials Management Standardization

Sustainability: Environment and Risk prevention

Asset

Not classified

170

03-31-2012

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

155

Notes to the consolidated financial statements as of June 30, 2012

Note 24- Environment (continued)

24.2

Detail of information on disbursements related to the environment, continued

Accumulated expenses as of June 30, 2012, continued

Identification of the Parent
or subsidiary

Name of the project with which the disbursement is
associated

Concept for which the
disbursement was made or
will be made

Asset /
Expense

Description of
the asset or
expense Item

Amount of
disbursement
for the Period
ThUS$

Actual or estimated
date on which
disbursements were or
will be made

SQM S.A.

IQ52 - New Victoria Environment Office

Not classified

Asset

Not classified

03-31-2012

SQM S.A.

IQ54 - Cultural heritage Pampa Hermosa

Sustainability: Environment and Risk prevention

Asset

Not classified

287

03-31-2012

SQM S.A.

IQ6M/ IQ6N - DIA Expansion Nueva Victoria Sur Mine (Projects: Exploration NVS7 2011 and Exploration Nva. Victoria Oeste)

Sustainability: Natural Resources

Asset

Not classified

115

06-30-2012

SQM S.A.

IP83 - DIA Expansion TLN-15 (Projects: Management Administration Expenses SQM Nueva Victoria)

Not classified

Expense

Not classified

12-31-2012

SQM S.A.

IQ53 - Cultural heritage route Soronal adduction (Pampa Hermosa)

Sustainability: Environment and Risk prevention

Asset

Not classified

03-31-2012

SQM S.A.

IQ9V - Project Quillagua

Not classified

Asset

Not classified

439

12-31-2014

SQM S.A.

PQB9 - Change of exhaust SO2 gas

Sustainability

Asset

Not classified

12-31-2012

SQM Salar S.A.

LQDM – Certification of tanks

Sustainability

Expense

Not classified

12-31-2012

SQM Salar S.A.

CQ4M – Regularization of Contractor facilities

Sustainability: Environment and Risk prevention

Asset - Expense

Not classified

06-30-2012

SQM Salar S.A.

CQ8U - New Changing Room CL - HL

Capacity Upgrade

Asset

Not classified

242

12-31-2012

SQM Salar S.A.

LP82 - Project for the Promotion of Agricultural Activity in Communities of the Salt deposit

Sustainability

Expense

Development

921

12-31-2012

SQM Salar S.A.

LPTF – Environmental study and exploration 2010

Sustainability

Expense

Not classified

398

06-30-2012

SQM Salar S.A.

LPTJ - Improvements Sanitary Works

Sustainability

Asset

Not classified

206

06-30-2012

SQM Salar S.A.

LQ38 - Field Drying Sludge

Sustainability: Environment and Risk prevention

Asset - Expense

Not classified

06-30-2012

SQM Salar S.A.

LQAK - garbage rooms MOP and SOP

Sustainability

Expense

Not classified

06-31-2012

SQM Salar S.A

LQFD- Changing Houses

Sustainability

Asset - Expense

Not classified

12-31-2012

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

156

Notes to the consolidated financial statements as of June 30, 2012

Note 24- Environment (continued)

24.2

Detail of information on disbursements related to the environment, continued

Accumulated expenses as of June 30, 2012, continued

Identification of the Parent
or subsidiary

Name of the project with which the disbursement is
associated

Concept for which the
disbursement was made or
will be made

Asset /
Expense

Description of
the asset or
expense Item

Amount of
disbursement
for the Period
ThUS$

Actual or estimated
date on which
disbursements were or
will be made

SQM Salar S.A

LQI6- Surveys and Ambient Prospections 2011 (EIA Operation Actualization in Salar de Atacama)

Ambient Procedure

Asset

Not classified

06-30-2013

SIT S.A.

MQ6Y - Maintenance and repair and bureau of exchange Tocopilla ME

Sustainability: Environment and Risk prevention

Asset

Not classified

03-31-2012

SIT S.A.

TQM2- Capsulation Project discharge/charge Fields 1 and 8

Costs cut

Asset - Expense

Not classified

11-30-2012

SIT S.A.

TPR8 - Disposal of liquid waste generation by aspiration

Sustainability: Environment and Risk prevention

Asset - Expense

Not classified

12-31-2012

SIT S.A.

TPYX – Equipping of dust collector of the cradle and seal - Field 3 Tocopilla

Sustainability: Environment and Risk prevention

Asset

Development

1,553

12-31-2012

SIT S.A.

TQAP - Paving Field No. 3 and No. 4

Capacity Upgrade

Expense

Not classified

10-30-2012

SIT S.A.

TQAV - Paving paths IV

Sustainability: Environment and Risk prevention

Expense

Development

12-31-2012

Minera Nueva Victoria S.A.

IQ4C - Camp Development (Osmosis and Others)

Capacity Upgrade

Asset

Not classified

1,983

12-31-2012

SQM Nitratos S.A.

PQI9 – Mine waste water treatment plant

Sustainability: Environment and Risk prevention

Asset

Not classified

08-01-2013

SQM Nitratos S.A.

IQDN- Storage Rises – Maintenance of Mine NV

Sustainability: Risk Prev., and Environment

Asset

Not classified

12-31-2012

Total

16,497

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

157

Notes to the consolidated financial statements as of June 30, 2012

24.2

Detail of information on disbursements related to the environment, continued

Future expenses as of June 30, 2012

Identification of the
Parent or
subsidiary

Name of the project with which the
disbursement is associated

Concept for which the
disbursement was made or will
be made

Asset /
Expense

Description of the asset or
expense Item

Amount of
disbursement
for the Period
ThUS$

Actual or estimated date on
which disbursements were or
will be made

SQM Industrial S.A.

Environment management (Budget 2012 Available at II Quarter 2012)

Not classified

Expense

Not classified

1,060

12-31-2012

SQM Industrial S.A.

FP55 - FPXA - EIA Expansion (Projects: Pampa Blanca Saltwater - Saltwater Stage I)

Sustainability

Asset

Development

270

12-31-2012

SQM Industrial S.A.

IQ8G – Improvement of Bureau of Exchange, offices and facilities

Sustainability

Asset

Not classified

12-31-2012

SQM Industrial S.A.

MNYS - Measures of Technological Change Cultural Heritage Dissemination Maria Elena

Sustainability: Environment and Risk prevention

Asset

Not classified

181

12-31-2012

SQM Industrial S.A.

MP5W - TK's Fuel Standards

Sustainability

Asset

Not classified

392

12-31-2012

SQM Industrial S.A.

MPQU - Construction of Hazardous Chemical Supplies warehouse

Sustainability: Environment and Risk prevention

Asset

Development

259

12-31-2012

SQM Industrial S.A.

MQA8 - Normalization gas system, external cafeterias (Stage 1: projects)

Not classified

Expense

Not classified

150

12-31-2012

SQM Industrial S.A.

MQAJ - Improvements to Camp Water and Sewage (P Contesse commitment to DDSS)

Not classified

Asset

Not classified

295

12-31-2012

SQM Industrial S.A.

MQBM - Archaeological Digging Deployment Maria Elena - Toco

Sustainability: Environment and Risk prevention

Asset - Expense

Not classified

12-31-2012

SQM Industrial S.A.

PPC1 - Remove switches park OCB sub 3 and 1/12 Pedro de Valdivia

Sustainability: Replacement of equipment

Asset - Expense

Not classified

114

12-31-2012

SQM Industrial S.A.

PPNK - Management of Ammonia PV plant stoppage

Sustainability: Environment and Risk prevention

Asset

Not classified

12-31-2012

SQM Industrial S.A.

PPZU - Standardize and certify Plant Fuel Tanks

Sustainability: Environment and Risk prevention

Asset - Expense

Not classified

3,088

12-31-2012

SQM Industrial S.A.

SQ7X - Reach 2011-2013

Sustainability

Expense

Not classified

378

01-31-2014

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

158

Notes to the consolidated financial statements as of June 30, 2012

Note 24- Environment (continued)

24.2

Detail of information on disbursements related to the environment, continued

Future expenses as of June 30, 2012

Identification of the
Parent or
subsidiary

Name of the project with which the
disbursement is associated

Concept for which the
disbursement was made or will
be made

Asset /
Expense

Description of the asset or
expense Item

Amount of
disbursement
for the Period
ThUS$

Actual or estimated date on
which disbursements were or
will be made

SQM Industrial S.A.

TQA2 - Drainage Improvement Villa Prat

Not classified

Asset - Expense

Not classified

170

12-31-2012

SQM Industrial S.A.

MQHF – Sustaining of batteries ME

Sustainability

Asset - Expense

Not classified

242

08-01-2013

SQM Industrial S.A.

MQK2 – Elimination of PCBs I

Not classified

Asset - Expense

Not classified

898

03-31-2015

SQM Industrial S.A.

JQH9 – Purchase of Bertrams Boiler

Sustainability: Replacement of equipment

Asset

Development

556

08-01-2013

SQM Industrial S.A.

CQLX- Yard for Dangerous Residue - S. Carmen y Lagarto

Sustainability: Risk Prevention and Environment

Asset - Expense

Not classified

100

12-31-2012

SQM Industrial S.A

JQL7- Engineering and Project for the reception of prilado and dried dust. KNO3

Capacity Upgrade

Expense

Research

400

08-01-2013

SQM Industrial S.A

JQB6 – NPTIV (DIA Planta NPT4, Coya Sur)

Ambient Procedure

Asset

Not classified

12-31-2012

SQM Industrial S.A

PQLV – New Area of Mine PV (DIA Pedro de Valdivia Mine)

Ambient Procedure

Asset

Not classified

03-31-2013

SQM S.A.

AQ0A - Well Drilling 4 Uptake Change Point Tamarugal

Sustainability: Natural Resources

Asset

Development

12-31-2012

SQM S.A.

IPFT - Cultural Heritage Region I

Sustainability: Environment and Risk prevention

Expense

Not classified

12-31-2012

SQM S.A.

IPXE - Environmental Monitoring Plan Llamara Salt flat

Sustainability: Environment and Risk prevention

Expense

Not classified

413

12-31-2012

SQM S.A.

IPXF - Environmental Monitoring Plan Tamarugal Pampa

Sustainability: Environment and Risk prevention

Expense

Not classified

891

12-31-2012

SQM S.A.

IQ08 - PSA Llamara & Pampa Tamarugal

Sustainability: Natural Resources

Expense

Development

12-31-2012

SQM S.A.

IQ0C - Mine Area Enhancement NV

Sustainability: Environment and Risk prevention

Expense

Not classified

06-30-2012

SQM S.A.

IQ1K - Construction of 3 observation wells in Sur Viejo

Sustainability: Natural Resources

Asset

Development

06-30-2012

SQM S.A.

IQ1M - PSA Re-injection of water to Puquios Llamara

Not classified

Asset

Not classified

751

12-31-2012

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

159

Notes to the consolidated financial statements as of June 30, 2012

Note 24- Environment (continued)

24.2

Detail of information on disbursements related to the environment, continued

Future expenses as of June 30, 2012

SQM S.A.

IQ3S - Hazardous Materials Management Standardization

Sustainability: Environment and Risk prevention

Asset

Not classified

330

12-31-2012

SQM S.A.

IQ52 - New Victoria Environment Office

Not classified

Asset

Not classified

06-30-2012

SQM S.A.

IQ53 - Cultural heritage route Soronal adduction (Pampa Hermosa)

Sustainability: Environment and Risk prevention

Asset

Not classified

06-30-2012

SQM S.A.

IQ54 - Cultural heritage Pampa Hermosa

Sustainability: Environment and Risk prevention

Asset

Not classified

517

12-31-2012

SQM S.A.

IQ9V - Project Quillagua

Not classified

Asset

Not classified

179

12-31-2014

SQM S.A.

PQB9 - Change of exhaust SO2 gas

Sustainability

Asset

Not classified

199

12-31-2012

SQM S.A.

IQ6M/ IQ6N - DIA Expansion Nueva Victoria Sur Mine (Projects: Exploration NVS7 2011 and Exploration Nva. Victoria Oeste)

Sustainability: Natural Resources

Asset

Not classified

06-30-2012

SQM S.A.

IP83 - DIA Expansion TLN-15 (Projects: Management Administration Expenses SQM Nueva Victoria)

Not classified

Expense

Not classified

12-31-2012

SQM S.A.

IQLR – Implem. Mitigation Measures for Puquíos Salar de Llamara

Sustainability: Risk Prevention and Environment

Asset - Expense

Not classified

280

12-30-2012

SQM S.A.

MQLQ – Fumes Washing System

Sustainability: Risk Prevention and Environment

Asset

Development

563

01-01-2013

SQM Salar S.A

LPTJ - Improvements Sanitary Works

Sustainability

Asset

Not classified

12-31-2012

SQM Salar S.A

LQDM – Certification of tanks

Sustainability

Expense

Not classified

938

12-31-2013

SQM Salar S.A

LQG8 – Waste room Toconao Campsite

Not classified

Asset - Expense

Not classified

12-31-2012

SQM Salar S.A

LQFD – Bureaus of exchange

Sustainability

Asset - Expense

Not classified

109

12-31-2012

SQM Salar S.A

LQI6 – Environmental studies and explorations 2011

Ambient Procedure

Asset

Not classified

271

06-30-2013

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

160

Notes to the consolidated financial statements as of June 30, 2012

Note 24- Environment (continued)

24.2

Detail of information on disbursements related to the environment, continued

Future expenses as of June 30, 2012

Identification of the
Parent or
subsidiary

Name of the project with which the
disbursement is associated

Concept for which the
disbursement was made or will
be made

Asset /
Expense

Description of the asset or
expense Item

Amount of
disbursement
for the Period
ThUS$

Actual or estimated date on
which disbursements were or
will be made

SQM Salar S.A

CQ8U - New Changing Room CL - HL

Capacity Upgrade

Asset

Not classified

12-31-2012

SQM Salar S.A

LP82 - Project for the Promotion of Agricultural Activity in Communities of the Salt deposit

Sustainability

Expense

Development

161

12-31-2012

SQM Salar S.A

CQ4M – Regularization of Facilities for Contractors

Sustainability: Risk Prevention and Environment

Asset

Not classified

12-31-2012

SIT S.A.

TPR8 - Disposal of liquid waste generation by aspiration

Sustainability: Environment and Risk prevention

Asset - Expense

Not classified

12-31-2012

SIT S.A.

TPYX - Enabling the dust collector of the crib and court seal 3 Tocopilla

Sustainability: Environment and Risk prevention

Asset

Development

257

12-31-2013

SIT S.A.

TQAV - Paving paths IV

Sustainability: Environment and Risk prevention

Expense

Development

459

12-31-2013

SIT S.A.

TQM2 –Capsulation Project descharge/charge Field 1 and 8

Costs Reduction

Expense

Not classified

11-30-2012

SIT S.A.

TQLY – Dust Extractor of packing N°1

Sustainability: Risk Prevention and Environment

Asset

Not classified

120

11-01-2012

Minera Nueva Victoria Ltda.

IQ4C - Development Camp (Osmosis and Others)

Capacity Upgrade

Expense

Not classified

12-31-2012

SQM Nitratos S.A

IQDN - Storage Rises – Maintenance of Mine NV

Sustainability: Environment and Risk prevention

Expense

Not classified

12-31-2012

SQM Nitratos S.A

PQI9 – Mine waste water treatment plant

Sustainability: Environment and Risk prevention

Asset - Expense

Not classified

08-01-2013

Total

15,665

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

161

Notes to the consolidated financial statements as of June 30, 2012

Note 24 - Environment (continued)

24.2

Detail of information on disbursements related to the environment, continued

Accumulated expenses, as of December 31, 2011

Identification of the
Parent or subsidiary

Name of the project with which the
disbursement is associated

Concept for which the
disbursement was made
or will be made

Asset /
Expense

Description of the
asset or expense Item

Amount of disbursement
for the Period ThUS$

Certain or estimated date on which
disbursements were or will
be made

SQM Industrial S.A.

Environment Management (2010 Expense)

Not classified

Expense

Not classified

1,868

12-31-2011

SQM Industrial S.A.

SQ7X - Reach 2011-2013

Sustainability

Expense

Not classified

01-31-2014

SQM Industrial S.A.

ANMI - Infrastructure consulting for the storage of dangerous chemical substances

Sustainability: Environment and Risk prevention

Asset

Development

06-30-2011

SQM Industrial S.A.

FNWR EID Discard field Pampa Blanca

Sustainability: Environment and Risk prevention

Expense

Development

12-31-2011

SQM Industrial S.A.

FP55 - FPXA - Mine Area EIS PB - PB Expansion EIS (Projects: Pampa Blanca Saltwater - Saltwater Stage I)

Sustainability

Asset

Development

945

12-31-2012

SQM Industrial S.A.

JNTU - Assessment of waters at San Isidro

Sustainability: Environment and Risk prevention

Asset

Not classified

556

12-31-2011

SQM Industrial S.A.

JPX9 - Enhanced Ground Granulated EID-Prilado Coya Sur (Project: Pilot Plant TD and Pilot Testing of Resin)

Sustainability: Research and Development

Asset

Research

06-30-2011

SQM Industrial S.A.

MNYS - Measures of Technological Change Cultural Heritage Dissemination Maria Elena

Sustainability: Environment and Risk prevention

Asset

Not classified

12-01-2011

SQM Industrial S.A.

MP17 - Standardization Water Chlorination ME / CS / PV

Sustainability

Asset

Not classified

06-30-2011

SQM Industrial S.A.

MP5W - TK's Fuel Standards

Sustainability

Asset

Not classified

613

12-31-2011

SQM Industrial S.A.

MPIS - Stabilization of streets and sidewalks dust suppression

Sustainability

Asset

Development

736

06-30-2011

SQM Industrial S.A.

MPL5 - Repair sanitary and electrical services

Sustainability

Asset

Development

184

06-30-2011

SQM Industrial S.A.

MPLS - Automation and Alarm Monitoring Station Hospital information

Not classified

Asset

Not classified

06-30-2011

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

162

Notes to the consolidated financial statements as of June 30, 2012

Note 24 - Environment (continued)

24.2

Detail of information on disbursements related to the environment, continued

Accumulated expenses, as of December 31, 2011, continued

Identification of the Parent or
subsidiary

Name of the project with which the
disbursement is associated

Concept for which the
disbursement was made or
will be made

Asset /
Expense

Description of the
asset or expense Item

Amount of
disbursement for the
Period ThUS$

Certain or estimated date on
which disbursements were or will
be made

SQM Industrial S.A.

MQ51 - Terms of Reference Project ME equity measures

Sustainability: Environment and Risk prevention

Expense

Not classified

12-31-2011

SQM Industrial S.A.

PPNK - Management of Ammonia PV stoppage plant

Sustainability: Environment and Risk prevention

Asset

Not classified

12-31-2011

SQM Industrial S.A.

PPZU - Standardize and certify Plant Fuel Tanks

Sustainability: Environment and Risk prevention

Asset - Expense

Not classified

785

12-01-2011

SQM Industrial S.A.

JQ8K – DIA Line 4 Floor Drying , Coya Sur (Project: Drying Line 4)

Capacity Upgrade

Asset

Development

09-01-2012

SQM Industrial S.A.

IQ8G – Improvement of Bureau of Exchange, offices and facilities

Sustainability

Asset

Not classified

12-31-2011

SQM Industrial S.A.

MQ7P - ME Village sewer lids change

Sustainability

Expense

Not classified

12-31-2011

SQM Industrial S.A.

JQB6 - EID Ground NPT4, Coya Sur (Project: NPTIV)

Capacity Upgrade

Asset

Development

04-30-2012

SQM Industrial S.A.

TQ78 - motorized sweepers

Sustainability: Replacement of equipment

Asset

Development

206

12-31-2011

Minera Nueva Victoria Ltda.

IPMN - Capacity Expansion Sanitary Iris

Capacity upgrade

Asset

Development

06-30-2011

SQM Industrial S.A.

MPQU - Construction of Hazardous Chemical Supplies warehouse

Sustainability: Environment and Risk prevention

Asset

Development

199

12-31-2011

SQM Industrial S.A.

PPC1 - Remove switches park OCB sub 3 and 1/12 Pedro de Valdivia

Sustainability: Replacement of equipment

Asset – Expense

Not classified

12-31-2012

SQM Industrial S.A.

MQ8M - Reconditioning monitoring station ME

Sustainability: Renovation

Asset

Not classified

12-31-2011

SQM Industrial S.A.

MQAJ - Improvements to Camp Water and Sewage (P Contesse commitment to DDSS)

Not classified

Asset

Not classified

12-31-2011

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

163

Notes to the consolidated financial statements as of June 30, 2012

Note 24 - Environment (continued)

24.2

Detail of information on disbursements related to the environment, continued

Accumulated expenses, as of December 31, 2011, continued

Identification of the
Parent or subsidiary

Name of the project with which the
disbursement is associated

Concept for which the
disbursement was made or
will be made

Asset /
Expense

Description of the
asset or expense Item

Amount of disbursement
for the Period ThUS$

Certain or estimated date on which
disbursements were or will be made

Minera Nueva Victoria Ltda.

IPNW - Improvements Halls C / D / B Iris

Sustainability

Asset

Not classified

08-31-2011

Minera Nueva Victoria Ltda.

IQ4C - Development Camp (Osmosis and Others)

Capacity Upgrade

Asset

Not classified

1,630

12-31-2012

SIT S.A.

TPLR - Implementation sewage pumping system to sewer

Sustainability: Environment and Risk prevention

Asset

Not classified

06-30-2011

SIT S.A.

TPM7 – Environmental nets field 3 and 4

Not classified

Asset - Expense

Not classified

524

06-30-2011

SIT S.A.

TPR8 - Disposal of liquid waste generation by aspiration

Sustainability: Environment and Risk prevention

Asset - Expense

Not classified

12-31-2011

SIT S.A.

TPYX - Enabling the dust collector of the crib and court seal 3 Tocopilla

Sustainability: Environment and Risk prevention

Asset

Development

1,496

12-31-2011

SIT S.A.

TQAV - Paving paths IV

Sustainability: Environment and Risk prevention

Expense

Development

12-01-2011

SIT S.A.

TQAP - Paving Field No. 3 and No. 4

Capacity Upgrade

Expense

Not classified

10-30-2012

SQM Nitratos S.A

IP6W - Treatment Plant Riles

Sustainability: Environment and Risk prevention

Asset

Not classified

06-30-2011

SQM Nitratos S.A

PP0V - Environmental Medium Maintenance Projects ME-PV-NV-PB

Sustainability: Environment and Risk prevention

Asset – Expense

Development

06-30-2011

SQM S.A.

AQ0A - Well Drilling 4 Uptake Change Point Tamarugal Pampa

Sustainability: Natural Resources

Asset

Development

534

12-31-2011

SQM S.A.

IPFT - Cultural Heritage Region I

Sustainability: Environment and Risk prevention

Expense

Not classified

127

12-31-2011

SQM S.A.

IPXE - Environmental Monitoring Plan Llamara Salt flat

Sustainability: Environment and Risk prevention

Expense

Not classified

465

12-31-2012

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

164

Notes to the consolidated financial statements as of June 30, 2012

Note 24 - Environment (continued)

24.2

Detail of information on disbursements related to the environment, continued

Accumulated expenses, as of December 31, 2011, continued

Identification of the
Parent or subsidiary

Name of the project with which the
disbursement is associated

Concept for which the
disbursement was made or
will be made

Asset /
Expense

Description of the
asset or expense Item

Amount of disbursement
for the Period ThUS$

Certain or estimated date on which
disbursements were or will be
made

SQM S.A.

IPXF - Environmental Monitoring Plan Tamarugal Pampa

Sustainability: Environment and Risk prevention

Expense

Not classified

230

12-31-2012

SQM S.A.

IQ08 - PSA Llamara & Pampa Tamarugal

Sustainability: Natural Resources

Expense

Development

1,740

12-31-2011

SQM S.A.

IQ0C - Mine Area Enhancement NV

Sustainability: Environment and Risk prevention

Expense

Not classified

12-31-2011

SQM S.A.

IQ1K - Construction of 3 observation wells in Sur Viejo

Sustainability: Natural Resources

Asset

Development

195

12-31-2011

SQM S.A.

IQ1M - PSA Re-injection of water to Puquios Llamara

Not classified

Asset

Not classified

962

12-31-2011

SQM S.A.

IQ3S - Hazardous Materials Management Standardization

Sustainability: Environment and Risk prevention

Asset

Not classified

100

12-31-2012

SQM S.A.

IQ52 - New Victoria Environment Office

Not classified

Asset

Not classified

12-31-2011

SQM S.A.

IQ53 - Cultural heritage route Soronal adduction (Pampa Hermosa)

Sustainability: Environment and Risk prevention

Asset

Not classified

12-31-2011

SQM S.A.

IQ54 - Cultural heritage Pampa Hermosa

Sustainability: Environment and Risk prevention

Asset

Not classified

188

12-31-2012

SQM S.A.

SCI6 - Environmental Studies - Project Region I

Not classified

Asset

Not classified

2,376

12-31-2011

SQM S.A.

IQ6M - DIA Expansion Nueva Victoria Sur Mine

Sustainability: Natural Resources

Asset

Not classified

262

01-31-2011

SQM S.A.

IQ9V – Quillagua Project

Not classified

Asset

Not classified

323

12-31-2014

SQM Salar S.A

CPTP - Installing emergency showers drinking water

Sustainability

Asset

Not classified

12-31-2011

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

165

Notes to the consolidated financial statements as of June 30, 2012

Note 24 - Environment (continued)

24.2

Detail of information on disbursements related to the environment, continued

Accumulated expenses, as of December 31, 2011, continued

Identification of the Parent
or subsidiary

Name of the project with which the
disbursement is associated

Concept for which the
disbursement was made or
will be made

Asset /
Expense

Description of the asset
or expense Item

Amount of disbursement
for The Period ThUS$

Certain or estimated date on which
disbursements were or will be
made

SQM Salar S.A

CPZH - Management of Descartes Filter Presses Hydroxide

Sustainability: Environment and Risk prevention

Expense

Not classified

12-31-2011

SQM Salar S.A

LP5J - Water Recharge Study Atacama Salt flat

Sustainability: Environment and Risk prevention

Expense

Research

105

12-31-2011

SQM Salar S.A

LP82 - Project for the Promotion of Agricultural Activity in Communities of the Salt deposit

Sustainability

Expense

Development

761

12-31-2014

SQM Salar S.A

LPTF – Environmental study and exploration 2010

Sustainability

Expense

Not classified

370

12-31-2011

SQM Salar S.A

LPTJ - Improvements Sanitary Works

Sustainability

Asset

Not classified

206

12-31-2011

SQM Salar S.A

LQ38 - Field Drying Sludge

Sustainability: Environment and Risk prevention

Asset - Expense

Not classified

12-31-2011

SQM Salar S.A

CQ8U - New Changing Room CL - HL

Capacity Upgrade

Asset

Not classified

238

12-31-2011

SQM Salar S.A

LQAK - garbage rooms MOP and SOP

Sustainability

Expense

Not classified

12-31-2011

Total

19,912

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

166

Notes to the consolidated financial statements as of June 30, 2012

Note 24 - Environment (continued)

24.2

Detail of information on disbursements related to the environment, continued

Future Expenses

Identification of the Parent
or subsidiary

Name of the project with which the
disbursement is associated

Concept for which the
disbursement was made or
will be made

Asset /
Expense

Description of the asset
or expense Item

Amount of
disbursement for
the Period ThUS$

Certain or estimated date on which
disbursements were or will be made

SQM Industrial S.A.

Environment management (Budget 2011- Expense to March 2011)

Not classified

Expense

Not classified

2,243

12-31-2011

SQM Industrial S.A.

SQ7X - Reach 2011-2013

Sustainability

Expense

Not classified

551

01-31-2014

SQM Industrial S.A.

FP55 - FPXA - Mine Area EIS PB - PB Expansion EIS (Projects: Pampa Blanca Saltwater - Saltwater Stage I)

Sustainability

Asset

Development

800

12-31-2012

SQM Industrial S.A.

MNYS - Measures of Technological Change Cultural Heritage Dissemination Maria Elena

Sustainability: Environment and Risk prevention

Asset

Not classified

107

12-01-2011

SQM Industrial S.A.

MP5W - TK's Fuel Standards

Sustainability

Asset

Not classified

487

12-31-2011

SQM Industrial S.A.

MPQU - Construction of Hazardous Chemical Supplies warehouse

Sustainability: Environment and Risk prevention

Asset

Development

264

12-31-2011

SQM Industrial S.A.

PPC1 - Remove switches park OCB sub 3 and 1/12 Pedro de Valdivia

Sustainability: Replacement of equipment

Asset - Expense

Not classified

122

12-31-2012

SQM Industrial S.A.

PPNK - Management of Ammonia PV stoppage plant

Sustainability: Environment and Risk prevention

Asset

Not classified

178

12-31-2011

SQM Industrial S.A.

PPZU - Standardize and certify Plant Fuel Tanks

Sustainability: Environment and Risk prevention

Asset - Expense

Not classified

2,715

12-01-2011

SQM Industrial S.A.

JQ8K – DIA Line 4 Floor Drying , Coya Sur (Project: Drying Line 4)

Capacity Upgrade

Asset

Development

09-01-2012

SQM Industrial S.A.

IQ8G – Improvement of Bureau of Exchange, offices and facilities

Sustainability

Asset

Not classified

12-31-2011

SQM Industrial S.A.

JQB6 - EID Ground NPT4, Coya Sur (Project: NPTIV)

Capacity Upgrade

Asset

Development

04-30-2012

SQM Industrial S.A.

TQA2 - Drainage Improvement Villa Prat

Not classified

Asset

Not classified

170

12-30-2011

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

167

Notes to the consolidated financial statements as of June 30, 2012

Note 24 - Environment (continued)

24.2

Detail of information on disbursements related to the environment, continued

Future expenses (continued)

Identification of the Parent
or subsidiary

Name of the project with which the
disbursement is associated

Concept for which the
disbursement was made or
will be made

Asset /
Expense

Description of the asset
or expense Item

Amount of
disbursement for
the Period ThUS$

Certain or estimated date on which
disbursements were or will be made

SQM Industrial S.A.

MQAJ - Improvements to Camp Water and Sewage (P Contesse commitment to DDSS)

Not classified

Asset

Not classified

297

12-31-2011

SQM Industrial S.A.

MQA8 - Normalization gas system, external cafeterias (Stage 1: projects)

Not classified

Asset

Not classified

150

12-30-2011

SQM Industrial S.A.

MQBM - Archaeological Digging Deployment Maria Elena - Toco

Sustainability: Environment and Risk prevention

Expense

Not classified

12-31-2011

Minera Nueva Victoria Ltda.

IQ4C - Camp Development (Osmosis and Others)

Capacity Upgrade

Asset

Not classified

1,370

12-31-2012

SIT S.A.

TPR8 - Disposal of liquid waste generation by aspiration

Sustainability: Environment and Risk prevention

Asset - Expense

Not classified

12-31-2011

SIT S.A.

TPYX - Enabling the dust collector of the crib and court seal 3 Tocopilla

Sustainability: Environment and Risk prevention

Asset

Development

204

12-31-2011

SIT S.A.

MQ6Y - Maintenance and repair and bureau of exchange Tocopilla ME

Sustainability: Environment and Risk prevention

Asset

Not classified

12-30-2011

SIT S.A.

TQAV - Paving paths IV

Sustainability: Environment and Risk prevention

Expense

Development

297

12-01-2011

SQM Nitratos S.A

IQDN - Storage Rises – Maintenance of Mine NV

Sustainability: Environment and Risk prevention

Asset

Not classified

07-30-2012

SQM S.A.

IPFT - Cultural Heritage Region I

Sustainability: Environment and Risk prevention

Expense

Not classified

12-31-2011

SQM S.A.

IPXE - Environmental Monitoring Plan Llamara Salt flat

Sustainability: Environment and Risk prevention

Expense

Not classified

1,276

12-31-2012

SQM S.A.

IPXF - Environmental Monitoring Plan Tamarugal Pampa

Sustainability: Environment and Risk prevention

Expense

Not classified

1,836

12-31-2012

SQM S.A.

IQ08 - PSA Llamara & Pampa Tamarugal

Sustainability: Natural Resources

Expense

Development

12-31-2011

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

168

Notes to the consolidated financial statements as of June 30, 2012

Note 24 - Environment (continued)

24.2

Detail of information on disbursements related to the environment, continued

Future expenses (continued)

Identification of the Parent
or subsidiary

Name of the project with which the
disbursement is associated

Concept for which the
disbursement was made or
will be made

Asset /
Expense

Description of the asset
or expense Item

Amount of
disbursement for
the Period ThUS$

Certain or estimated date on which
disbursements were or will be made

SQM S.A.

IQ0C - Mine Area Enhancement NV

Sustainability: Environment and Risk prevention

Expense

Not classified

12-31-2011

SQM S.A.

IQ1K - Construction of 3 observation wells in Sur Viejo

Sustainability: Natural Resources

Asset

Development

12-31-2011

SQM S.A.

IQ1M - PSA Re-injection of water to Puquios Llamara

Not classified

Asset

Not classified

783

12-31-2011

SQM S.A.

IQ3S - Hazardous Materials Management Standardization

Sustainability: Environment and Risk prevention

Asset

Not classified

300

12-31-2012

SQM S.A.

IQ52 - New Victoria Environment Office

Not classified

Asset

Not classified

12-31-2011

SQM S.A.

IQ53 - Cultural heritage route Soronal adduction (Pampa Hermosa)

Sustainability: Environment and Risk prevention

Asset

Not classified

12-31-2011

SQM S.A.

IQ54 - Cultural heritage Pampa Hermosa

Sustainability: Environment and Risk prevention

Asset

Not classified

764

12-31-2012

SQM S.A.

IQ9V – Quillagua Project

Not classified

Asset – Expense

Not classified

849

12-31-2014

SQM S.A.

PQB9 - Change of exhaust SO2 gas

Sustainability

Asset

Not classified

178

12-01-2011

SQM Salar S.A

CQ4M – Regularization of Contractor facilities

Sustainability: Environment and Risk prevention

Asset

Not classified

12-31-2012

SQM Salar S.A

LP82 - Project for the Promotion of Agricultural Activity in Communities of the Salt deposit

Sustainability

Expense

Development

822

12-31-2014

SQM Salar S.A

CQ8U - New Changing Room CL - HL

Capacity Upgrade

Asset

Not classified

102

12-31-2011

Total

17,338

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

169

Notes to the consolidated financial statements as of June 30, 2012

Note 24 - Environment (continued)

24.3

Description of each project, indicating whether they are in process or have been finished

SQM Industrial S.A.

JQH9: The purpose of this project is to purchase Bertram’s boilers in order to improve the combustion levels, decreasing and controlling the emission of fumes to the environment. The project is in process.

JQEZ: This Project includes purchasing and installing Bertrams Boilers in Coya Sur Prill, in order to improve the level of combustion, decreasing and controlling the emission of fumes to the environment. The project is in process.

FP55 – FPXA: These 2 projects have a final objective consisting in the installation of a sea water sucking system of 87 km from the Mejillones area to the SQM facilities located in Pampa Blanca. The projected expenses correspond only to the filing of the EIA of the PB mine zone and the EIA of the PB expansion. Both projects are in process.

IQ8G: This project contemplates the improvement of restrooms and the expansion of their capacity. In addition to water storage sector would be improved. The project is in process.

JQ8K: This project has the purpose of building a new drying plant in Coya Sur. The projected expenses correspond only to the environmental filing. The project is in process.

JQB6: Preparation and filing of the EID of project NPT4 of Coya Sur, which increases the salt production capacity. The project is in process.

MNYS: Preparation and execution of a project of geoglyphs conservation; editing and publishing a book and implementing a diffusion center. Construction of a collection deposit. All these are compensation measures of the project Technological Change Maria Elena. The project is in process.

MP5W: Normalization of the fuel storage and distribution system in SQM installations. The project is in process.

MPQU: Construction of warehouses for dangerous chemicals in order to comply with the current regulation and decrease the chance of accidents with high potential.

MQ8M: Performing maintenance to structures and closing monitoring stations in Maria Elena. The project is in process.

MQAJ: Improve the water and sewerage network in Maria Elena for better operations. The project is in process.

MQBM: Implementing archeological measures in Maria Elena – Toco site, such as the archeological registry, analysis of lithic materials, and generation of reports, among others. The project is in process.

PPC1: Purchase and replacement of equipment contaminated with PCB and obsolete equipment without spare parts. The project is in process.

PPNK: Project to ensure the control of the ammonia gas in the crystal plant stoppage. The project is in process.

PPZU: The necessary actions to normalize and certify certified fuel tanks in the plants in María Elena, Coya Sur and Pedro de Valdivia were performed. The project is in process.

SQ7X: The purpose of this project is obtaining and recording information of components and finished products of SQM in the ECHA database to comply with the requirements set forth by the REACH regulation of the European Union. The project is in process.

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

170

Notes to the consolidated financial statements as of June 30, 2012

Note 24 - Environment (continued)

24.3

Description of each project, indicating whether they are in process or have been finished, continued

TQ78: This project contemplates the purchase of sweeping trucks with a vacuum system in order to reduce the emissions of particulate material in the port of Tocopilla. The project is in process.

MQHF: To equip a plant of sewage in the Toco according to DS 594, a changing room for operators and contractors, among other things. The project is now in progress.

MQK2: The Project consists on decontaminating equipments and elements contaminated with PCBs AND/OR final disposition according to the regulation applicable. The project is now in progress.

PQLV: Elaboration and procedure of DIA Pedro de Valdivia Mine. The project is now in progress.

SQM S.A.

AQ0A: To enable the use of water rights that have been granted in several pits of the Conaf reservation Pampa del Tamarugal and to take them outside of the tamarugo forest and of the reservation, reducing the environmental impact of its exploitation. The project is in process.

IPFT: The project contemplates the implementation of measures committed in projects in the area of the Nueva Victoria mine, update of operations in Nueva Victoria, evaporation ducts and pits in Iris. The project is in process.

IPXE: To implement the plan of environment follow-up of Project Pampa Hermosa in Salar de Llamara. The project is in process.

IPXF: To implement the environment plan follow-up of the project Pampa Hermosa in Pampa del Tamarugal. The project is in process.

IQ08: The project considers the following works for the water reservoirs in Pampa del Tamarugal and Salar de Llamara: constructing and enabling observation and monitoring pits, pumping tests, construction of roads over hard sand terrain and Salar crust. The project is in process.

IQ0C: This project consists in implementing a program of adding value and area adjacent to route 5, which will enable the development of a self-guided tour of the area called Cantón de Lagunas in the context of the saltpeter history. The project is in process.

IQ1K: Construction of the observation pits in Sur Viejo to comply with the environmental commitments proposed in the EIS of Pampa Hermosa and to be able to monitor the water reservoir near said pits. The project is in process.

IQ1M: To implement environmental commitments included in the EIS of project “Pampa Hermosa” to safeguard the puquíos zone that is in the Salar de Llamara water reservoir. The project is in process.

IQ3S: Improvements in the storage installations of dangerous raw materials in Nueva Victoria. The project is in process.

IQ52: This project includes the enabling and expansion of the environment offices in Nueva Victoria. The project is in process.

IQ53: To perform equity assay to the new location of the Soronal abduction trace Project Pampa Hermosa approved through N° 890/2010. The project is in process.

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

171

Notes to the consolidated financial statements as of June 30, 2012

Note 24 - Environment (continued)

24.3

Description of each project, indicating whether they are in process or have been finished, continued

IQ54: This corresponds to the implementation of environmental commitments acquired through the environment assessment of the project Pampa Hermosa (RCA N°890/2010). The project is in process.

IQ9V: To support the development of agriculture and tourist industry in the location of Quillagua, in order to enhance the activity through productive measures, technical assistance and marketing. The project is in process.

PQB9: installation of two larger SO2 extractors at the end of the process. The project is in process.

IQ6M – IQ6N: Preparation and filing of the EID of the Project “Expansion of Mine Nueva Victoria”. The projected expenses only include the environment document filing. The project is in process.

IP83: Preparation and filing of the EID of the Project “Extension TLN-15”. The projected expenses only include the environment document filing. The project is in process.

IQLR: The scope of this stage includes the Update of the Design, implementation and operation of the mitigation measure of the puquíos at Salar Llamara. The project is in progress.

MQLQ: Design and implement a fumes washing system that allows the SO2 emissions to mitigate, aligned to the Policy of Sustainable Development of SQM. The project is in progress.

SQM Salar S.A.

LQDM: Certification of the liquid fuel storage tanks. The project is in process.

CQ4M: The project contemplates the regularization of the electric facilities, change of cables, electric and illumination control panels. It also contemplates the installation of enough restroom with showers for the contractor’s permanent personnel. The project is in process.

CQ8U: To improve the condition and capacity of the exchange rooms in Salar del Carmen. The project is in process.

LP82: To support the development of demonstration lots, provide technical assistance for the improvement of agriculture practices such as watering. The project is in process.

LPTF: To perform semi-annual reports, given that it is necessary to present improvements and optimizations at environmental control points, and the knowledge on geologic and hydrogeologic variables must be improved near Salar de Atacama. The project is in process.

LPTJ: The plan considers the acquisition of stand equipment to ensure the operating continuity of the TAS and OR plants, the change in the current control system of TK's regarding the accumulation of drinking water, wastewater, and wastewater elevation chambers. The project is finished.

LQ38: This project has the purpose to comply with the current regulations and with observations raised by the SEREMI of Health. The project is in process.

LQAK: The project considers the construction of the garbage rooms in the MOP and SOP lunchrooms, in order to increase the capacity of waste storage. The project is in process.

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

172

Notes to the consolidated financial statements as of June 30, 2012

Note 24 - Environment (continued)

24.3

Description of each project, indicating whether they are in process or have been finished, continued

LQFD: The Project includes the construction of exchange offices with the purpose of accomplishing the regulation and comfort for our employees. The project is now in progress.

LQI6: Elaboration and procedure of the EIA Update of Operations in Salt Deposit of Atacama. The project is now in progress.

SIT S.A.

MQ6Y: To maintain and repair the bureau of exchange in María Elena and Tocopilla, in order to comply with Decree No.594. The project is in its closing stage.

TPR8: This project pretends to increase the generation of industrial waste through the use of vacuum and no-washing technologies, through the implementation of a vacuum system that avoids the use of water and therefore the generation of liquid industrial waste. The project is in process.

TPYX: To comply with the commitment of decreasing the emission of particulate material towards the city of Tocopilla. The project is in process.

TQAP: to decrease the environmental pollution and losses produced by the product’s storage. The project is in process.

TQAV: Paving and maintenance of internal roads of the port of Tocopilla, to decrease pollution and to comply with the Supreme Decree related to the saturated zone. The project is in process.

TQM2: The Project considers to recover the operation conditions by means of a modification to the duct yard N°1, thus being able to diminish the environmental pollution. The project is in process

Minera Nueva Victoria Ltda.

IQ4C: Supply, construction and assembly of the osmosis and septic pits plant required to enable that Iris camp plant and other. The project is in its closing stage.

SQM Nitratos S.A.

PQI9: A new pit to replace the current one will be built, with a new waste water treatment technology. The project is in process.

IQDN: A parapet will be built thus forming a squared pool (or rectangular) with an impermeable membrane covering it in all its extension in order to be used as mud deposit (Rises). The project is in process.

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

173

Notes to the consolidated financial statements as of June 30, 2012

Note 25 - Other current and non-current non-financial assets

As of June 30, 2011, and December 31, 2011, the detail of other current and non-current assets is as follows:

	06/30/2012		12/31/2011
Other non-financial assets, current	ThUS$		ThUS$
Domestic Value Added Tax		28,015		46,243
Foreign Value Added Tax		6,054		5,879
Prepaid mining licenses		6,015		1,228
Prepaid insurance		1,487		6,979
Other prepayments		102		236
Other assets		6,592		3,227
Total		48,265		63,792

	06/30/2012		12/31/2011
Other non-financial assets, non-current	ThUS$		ThUS$
Stain development expenses and prospecting expenses (1)		21,099		21,395
Guarantee deposits		503		428
Other assets		6,355		2,828
Total		27,957		24,651

(1)

Assets for the exploration or evaluation of mineral resources are amortized to the extent that the explored or evaluated area has been exploited. For this purpose, a variable rate is applied to extracted tons, which is determined based on the measured initial reserve and evaluation cost. The Company presents expenses associated with Exploration and Evaluation of Mineral Resources. Of these expenses, those that are under exploitation are included under Inventory and are amortized according to the estimated ore reserves contained, and expenses associated with future reserves are presented under Other non-current assets. Those expenses incurred on properties with low ore grade that are not economically exploitable are directly charged to income. As of June 30, 2012 balances associated with the exploration and assessment of mineral resources is presented under Inventory for ThUS$ 2,979 (ThUS$ 3,699 as of December 31, 2011).

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

174

Notes to the consolidated financial statements as of June 30, 2012

Note 25 - Other current and non-current non-financial assets (continued)

Reconciliation of changes in assets for exploration and mineral resource evaluation, by type

Movements in assets for the exploration and evaluation of mineral resources as of June 30, 2012 and December 31, 2011:

	06/30/2012			12/31/2011
Reconciliation	ThUS$			ThUS$

Assets for the exploration and evaluation of mineral resources, net, opening balance		21,395			21,350
Changes in assets for exploration and assessment of mineral resources:
Additions, other than business combinations		843			3,777
Depreciation and amortization		(1,008	)		(1,883	)
Increase (Decrease) due to transfers and other charges		(131	)		(1,849	)
Assets for exploration and assessment of mineral resources, net, closing balance		21,099			21,395

As of the presentation date, no reevaluations of assets for exploration and assessment of mineral resources have been conducted.

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

175

Notes to the consolidated financial statements as of June 30, 2012

Note 26 - Operating segments

26.1

Operating segments

General information

The amount of each item presented in each operating segment is equal to that reported to the maximum authority who makes decisions regarding the operation, in order to decide on the allocation of resources to the defined segments and to assess its performance.

Factors used to identify the segments from those that must be informed:

The segments that have to be reported are strategic business units that offer different products and services. They are managed separately since each business requires different thecnologies and marketing strategies.

Description of the type of products and services where each segment to be informed obtains its incomes from the regular activities.

The operation segments through which the incomes of the regular activities are obtained, where money is spent and, those operation results are regularly checked by the maximum authority of the company when taking the operations decisions, are the following groups of products.

1. - Specialty plant nutrients

2. - Iodine and its derivatives

3. - Lithium and its derivatives

4. - Industrial chemicals

5. - Potassium

6. - Other products and services

Description of the sources of income for all the other segments

Information relative to assets, liabilities and profit and expenses that cannot be assigned to the segments indicated above, due to the nature of production processes, is included under the "Corporate Unit" category of disclosures.

Accounting criteria of the transactions among the segments which are reported.

Sales between segments are made in the same conditions as those made to third parties, and are consistently measures as presented in the income statement.

Description of the nature of the differences between the measuring of the results of segments that need to be reported and the result of the entity before the expense or income due to income by income taxes and discontinued operations.

The information reported in the segments is extracted from the corporate consolidated financial statements of the company and, therefore, it is not required to prepare conciliations among the data previously mentioned and the reported ones in the respective segments, according to what is stated in paragraph 28 of NIIF 8, “Operation Segments”.

Description of the nature of the differences between the measuring of the segments of assets to be reported and the assets of the entity.

The assets are not shown classified by segments, since this information is not easily available, part of these assets are not separable because of the type of activity to which they are affected and because this information is not used by the administration for the decision making in relation to the resources to be assigned to each defined segment. All the assets are disclosed in the category “amounts not assigned”.

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

176

Notes to the consolidated financial statements as of June 30, 2012

Note 26 - Operating segments (continued)

26.1

Operating segments, continued

Description of the nature of the differences between the measuring of the liabilities of segments that must be reported and the liabilities of the entity.

The liabilities are not shown classified by segments, since this information is not easily available, part of these assets are not separable because of the type of activity they are involved in and since this information is not used by the administration for the decision making in relation to the resources to be assigned to each spedific segment. All liabilities are disclosed in the category of “amounts not assigned”.

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

177

Notes to the consolidated financial statements as of June 30, 2012

Note 26 - Operating segments (continued)

26.2

Information on operating segments as of June 30, 2012 and 2011:

06/30/2012
	Specialty plant nutrients			Iodine and its derivatives			Lithium and its derivatives			Industrial chemicals			Potassium			Other products and services			Reportable segments			Operating segments			Elimination of inter- segments amounts			Unallocated amounts			Significant reconciliation entries		Total 06/30/2012
Operating segment items	ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$		ThUS$

Revenue		353,899			300,892			113,447			83,652			325,284			35,782			1,212,956			1,212,956			-			-			-		1,212,956
Revenues from transactions with other operating segments of the same entity		142,528			389,581			74,952			147,503			259,910			257,393			1,271,867			1,271,867			(1,271,867	)		-			-		-

Revenues from external customers and transactions with other operating segments of the same entity		496,427			690,473			188,399			231,155			585,194			293,175			2,484,823			2,484,823			(1,271,867	)		-			-		1,212,956

Interest revenue		-			-			-			-			-			-			-			-			-			-			-		-
Interest expense		-			-			-			-			-			-			-			-			108,799			(135,257	)		-		(26,458	)
depreciation and amortization expense		(27,496	)		(23,378	)		(8,814	)		(6,499	)		(25,273	)		(2,781	)		(94,241	)		(94,241	)		-			-			-		(94,241	)
The entity’s interest in the profit or loss of associates and joint ventures accounted for by the equity method		-			-			-			-			-			-			-			-			-			13,300			-		13,300
income tax expense, continuing operations		-			-			-			-			-			-			-			-			-			(116,288	)		-		(116,288	)
Other items other tan significant cash		-			-			-			-			-			-			-			-			-						-		-
Income (loss) before taxes		115,947			194,185			55,930			31,713			131,800			2,354			531,929			531,929			(344,250	)		274,234			-		461,913

Net income (loss) from continuing operations		115,947			194,185			55,930			31,713			131,800			2,354			531,929			531,929			(344,250	)		157,946			-		345,625
Net income (loss) from discontinued operations
Net income (loss)		115,947			194,185			55,930			31,713			131,800			2,354			531,929			531,929			(344,250	)		157,946			-		345,625

Assets		-			-			-			-			-			-			-			-			(7,896,924	)		12,157,326			-		4,260,402
Equity-accounted investees		-			-			-			-			-			-			-			-			(2,971,686	)		3,038,466			-		66,780
Increase of non-current assets		-			-			-			-			-			-			-			-						101,907			-		101,907
Liabilities		-			-			-			-			-			-			-			-			(4,477,281	)		6,530,368			-		2,053,087
Equity																																		2,207,315
Equity and liabilities																																		4,260,402
Impairment loss recognized in profit or loss		(7,176	)		(549	)		(207	)		(1,957	)		(2,335	)		(98	)		(12,322	)		(12,322	)		-			(3,449	)		-		(15,771	)
Cash flows from (used in) operating activities		-			-			-			-			-			-			-			-			-			332,900			-		332,900
Cash flows from (used in) investing activities		-			-			-			-			-			-			-			-			-			(390,325	)		-		(390,325	)
Cash flows from (used in) financing activities		-			-			-			-			-			-			-			-			-			35,122			-		35,122

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

178

Notes to the consolidated financial statements as of June 30, 2012

Note 26 - Operating segments (continued)

26.2

Information on operating segments as of June 30, 2012 and 2011:

06/30/2011
	Specialty plant nutrients			Iodine and its derivatives			Lithium and its derivatives			Industrial chemicals			Potassium			Other products and services			Reportable segments			Operating segments			Elimination of inter- segments amounts			Unallocated amounts			Significant reconciliation entries		Total 03/31/2011
Operating segment items	ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$		ThUS$

Revenue		363,859			211,080			86,324			67,935			273,301			29,201			1,031,700			1,031,700			-			-			-		1,031,700
Revenues from transactions with other operating segments of the same entity		143,576			280,264			63,130			126,287			289,586			111,025			1,013,868			1,013,868			(1,013,868	)		-			-		-

Revenues from external customers and transactions with other operating segments of the same entity		507,435			491,344			149,454			194,222			562,887			140,226			2,045,568			2,045,568			(1,013,868	)		-			-		1,031,700

Interest revenue		-			-			-			-			-			-			-			-			-			-			-		-
Interest expense		-			-			-			-			-			-			-			-			97,294			(119,912	)		-		(22,618	)
depreciation and amortization expense		(31,352	)		(18,187	)		(7,440	)		(5,849	)		(23,547	)		(2,515	)		(88,890	)		(88,890	)		-			-			-		(88,890	)
The entity’s interest in the profit or loss of associates and joint ventures accounted for by the equity method		-			-			-			-			-			-			-			-			(246	)		10,284			-		10,038
income tax expense, continuing operations		-			-			-			-			-			-			-			-			-			(83,393	)		-		(83,393	)
Other items other tan significant cash		-			-			-			-			-			-			-			-			-						-		-
Income (loss) before taxes		112,631			110,364			38,638			24,127			109,319			2,101			397,180			397,180			(379,456	)		311,306			-		329,030

Net income (loss) from continuing operations		112,631			110,364			38,638			24,127			109,319			2,101			397,180			397,180			(379,456	)		227,913			-		245,637
Net income (loss) from discontinued operations
Net income (loss)		112,631			110,364			38,638			24,127			109,319			2,101			397,180			397,180			(379,456	)		227,913			-		245,637

Assets		-			-			-			-			-			-			-			-			(6,711,294	)		10,305,780			-		3,594,486
Equity-accounted investees		-			-			-			-			-			-			-			-			(2,558,556	)		2,626,356			-		67,800
Increase of non-current assets		-			-			-			-			-			-			-			-						142,467			-		142,467
Liabilities		-			-			-			-			-			-			-			-			(3,864,827	)		5,623,309			-		1,758,482
Equity																																		1,836,004
Equity and liabilities																																		3,594,486
Impairment loss recognized in profit or loss		(4,839	)		(253	)		(285	)		(2,721	)		1,674			(96	)		(6,520	)		(6,520	)		-			(1,518	)		-		(8,038	)
Cash flows from (used in) operating activities		-			-			-			-			-			-			-			-			-			307,134			-		307,134
Cash flows from (used in) investing activities		-			-			-			-			-			-			-			-			-			(280,979	)		-		(280,979	)
Cash flows from (used in) financing activities		-			-			-			-			-			-			-			-			-			(56,570	)		-		(56,570	)

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

179

Notes to the consolidated financial statements as of June 30, 2012

Note 26 - Operating segments (continued)

26.3

Integral income statements classified by operation segments, based in groups of products, as of June 30th, 2012:

Items del estado de resultados integrales	Specialty plant nutriente ThUS$			Iodine and its derivatives ThUS$			Lithium and its derivatives ThUS$			Industrial chemicals ThUS$			Potassium ThUS$			Other products and services ThUS$			Corporate Unit MUS$			Total Segments and Corporate Unit MUS$
Incomes from regular activities		353.899			300.892			113.447			83.652			325.284			35.782			-			1.212.956
Cost of godos sold		(237.952	)		(106.707	)		(57.517	)		(51.939	)		(193.484	)		(33.428	)		-			(681.027	)

Gross Profit		115.947			194.185			55.930			31.713			131.800			2.354			-			531.929

Other incomes, by function		-			-			-			-			-			-			9.453			9.453
Management expenses		-			-			-			-			-			-			(48.287	)		(48.287	)
Other expenses, by function		-			-			-			-			-			-			(15.523	)		(15.523	)
Other profits (losses)		-			-			-			-			-			-			20			20
Financial incomes		-			-			-			-			-			-			12.784			12.784
Financial costs		-			-			-			-			-			-			(26.458	)		(26.458	)
Income distribution (loss) of associates and joint business accounted by using the allotment method.		-			-			-			-			-			-			13.300			13.300
Change differential		-			-			-			-			-			-			(15.305	)		(15.305	)
Profit (Loss ) before tax		115.947			194.185			55.930			31.713			131.800			2.354			(70.016	)		461.913
Expense for capital gains tax		-			-			-			-			-			-			(116.288	)		(116.288	)
Profit (Loss ) proceeding from continued operations		115.947			194.185			55.930			31.713			131.800			2.354			(186.304	)		345.625
Profit (Loss) proceeding from discontinued operations		-			-			-			-			-			-			-			-
Profit (Loss)		115.947			194.185			55.930			31.713			131.800			2.354			(186.304	)		345.625
Profit (Loss), ascribable to
Profit (Loss ) ascribable to the owners of the controller		-			-			-			-			-			-			-			345.625
Profit (Loss ) ascribable to not controlled participations		-			-			-			-			-			-			-			3.388
Profit (Loss)		-			-			-			-			-			-			-			345.625

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

180

Notes to the consolidated financial statements as of June 30, 2012

26.3

Integral income statements classified by segments of operation based in groups of products, as of June 30th, 2011:

Items of integral income statement	Specialty plant nutriente ThUS$			Iodine and its derivatives ThUS$			Lithium and its derivatives ThUS$			Industrial chemicals ThUS$			Potassium ThUS$			Other products and services ThUS$			Corporate Unit MUS$			Total Segments and Corporate Unit MUS$

Incomes of regular activities		363.859			211.080			86.324			67.935			273.301			29.201			-			1.031.700
Cost of goods sold		(251.228	)		(100.716	)		(47.686	)		(43.808	)		(163.982	)		(27.100	)		-			(634.520	)

Gross Profit		112.631			110.364			38.638			24.127			109.319			2.101			-			397.180

Other incomes, by function		-			-			-			-			-			-			5.377			5.377
Administration expenses		-			-			-			-			-			-			(43.148	)		(43.148	)
Other expenses, by function		-			-			-			-			-			-			(26.863	)		(26.863	)
Other profits (loss)		-			-			-			-			-			-			4.712			4.712
Financial incomes		-			-			-			-			-			-			11.492			11.492
Financial expenses		-			-			-			-			-			-			(22.618	)		(22.618	)
Profits distribution (loss) of asociates and joint businessess accounted by using the allotment method		-			-			-			-			-			-			10.039			10.039
Exchange differences		-			-			-			-			-			-			(7.141	)		(7.141	)
Profit (Loss ) before tax		112.631			110.364			38.638			24.127			109.319			2.101			(68.150	)		329.030
Expense of capital gains tax		-			-			-			-			-			-			(83.393	)		(83.393	)
Profit (Loss ) proceeding from continued operations		112.631			110.364			38.638			24.127			109.319			2.101			(151.543	)		245.637
Profit (Loss ) proceeding from discontinued operations		-			-			-			-			-			-			-			-
Ganancia (Pérdida)		112.631			110.364			38.638			24.127			109.319			2.101			(151.543	)		245.637
Ganancia (Pérdida), atribuible a
Profit (Loss) attributable to the owners of the controller		-			-			-			-			-			-			-			243.616
Profit (Loss ) attributable to non controlled participations		-			-			-			-			-			-			-			2.021
Profit (Loss)		-			-			-			-			-			-			-			245.637

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

181

Notes to the consolidated financial statements as of June 30, 2012

Note 26 - Operating segments (continued)

26.4

Incomes from regular activities proceeding from transactions with other segments of operation of the company as of June 30th, 2012:

Items del estado de resultados integrales	Specialty plant nutriente ThUS$		Iodine and its derivatives ThUS$		Lithium and its derivatives ThUS$		Industrial chemicals ThUS$		Potassium ThUS$		Other products and services ThUS$		TotalSegments and Corporate Unit MUS$

Incomes of regular activities		353.899		300.892		113.447		83.652		325.284		35.782		1.212.956

26.4

Incomes from regular activities proceeding from transactions with other segments of operation of the company, as of June 30th, 2011:

Items del estado de resultados integrales	Specialty plant nutriente ThUS$		Iodine and its derivatives ThUS$		Lithium and its derivatives ThUS$		Industrial chemicals ThUS$		Potassium ThUS$		Other products and services ThUS$		TotalSegments And Corporate Unit MUS$

Incomes of regular activities		363.859		211.080		86.324		67.935		273.301		29.201		1.031.700

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

182

Notes to the consolidated financial statements as of June 30, 2012

26.5

Information about geographic areas

According to the statement in paragraph N°33 of NIIF N°8, the entity disclose geographic information of its incomes of the regular activities proceeding from external clients and from the non regular assets not being financial instruments, assets proceeding from deferred taxes, assets corresponding to post job benefits and rights derived of insurance contracts.

26.6

Information on main customers

With respect to the degree of dependency of the Company on its customers, in accordance with paragraph N° 34 of IFRS N° 8, the Company has no external customers who individually represent 10% or more of its revenue. Credit risk concentrations with respect to trade and other accounts receivable are limited due to the significant number of entities in the Company’s portfolio and its worldwide distribution. The Company’s policy requires guarantees (such as letters of credit, guarantee clauses and others) and/or to maintain insurance policies for certain accounts as deemed necessary by the Company's Management.

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

183

Notes to the consolidated financial statements as of June 30, 2012

Nota 26 - Operating segments (continued)

26.7

Segments by geographical areas as of June 30, 2012 and 2011

Items	Chile		Latin America and the Caribbean		Europe		North America		Asia and others		06/30/2012
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$

Revenue		90,380		244,576		314,721		300,581		262,698		1,212,956

Non-current assets:		1,905,236		572		30,264		16,860		32,283		1,985,215
Equity-accounted investees		1,496		-		18,557		14,779		31,948		66,780
Intangible assets other than goodwill		3,626		-		-		408		7		4,041
Goodwill		27,146		86		11,373		-		-		38,605
Property, plant and equipment, net		1,845,232		265		334		1,673		328		1,847,832
Investment property		-		-		-		-		-		-
Other non-current assets		27,736		221		-		-		-		27,957

Items	Chile		Latin America and the Caribbean		Europe		North America		Asia and others		06/30/2011
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$

Revenue		70,241		132,439		469,461		222,679		136,880		1,031,700

Non-current assets:		1,644,335		697		35,359		11,658		33,850		1,725,899
Equity-accounted investees		1,237		-		23,663		9,642		33,258		67,800
Intangible assets other than goodwill		3,597		-		2		470		-		4,069
Goodwill		26,929		86		11,373		-		-		38,388
Property, plant and equipment, net		1,589,671		256		321		1,546		215		1,592,009
Investment property		1,357		-		-		-		-		1,357
Other non-current assets		21,544		355		-		-		377		22,276

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

184

Notes to the consolidated financial statements as of June 30, 2012

Note 26 - Operating segments (continued)

26.8

Property, plant and equipment classified by geographical areas

The company's main productive facilities are located near their mines and extraction facilities in northern Chile. The following table presents the main production facilities as of June 30, 2012 and December 31, 2011:

Location		Products:
Pedro de Valdivia		Production of nitrite, sulfate, and iodine
María Elena		Production of nitrite, sulfate, and iodine
Coya Sur		Production of nitrite, sulfate, and iodine
Nueva Victoria		Production of iodine and nitrate salts
Salar de Atacama		Potassium chloride, Lithium chloride and boric acid
Salar del Carmen		Production of Lithium carbonate and lithium hydroxide, production of boron
Tocopilla		Port facilities

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

185

Notes to the consolidated financial statements as of June 30, 2012

Note 27 – Gains (losses) from operating activities in the statement of income by function of expenses, exposed according to their nature

		06/30/2012		06/30/2011
		ThUS$		ThUS$
27.1	Revenue

	Products		1,209,415		1,028,216
	Services		3,541		3,484

	Total		1,212,956		1,031,700

		06/30/2012			06/30/2011
		ThUS$			ThUS$
27.2	Cost of sales

	Raw material and supplies		(511,081	)		(334,583	)

	Types of employee benefits expenses
	Salaries and wages		(61,423	)		(49,132	)
	Other short-term employee benefits		(31,872	)		(26,341	)
	Termination benefit expenses		(1,169	)		(2,702	)
	Total employee benefits expenses		(94,464	)		(78,175	)

	Depreciation and amortization expenses
	Depreciation expense		(91,159	)		(75,143	)

	Impairment loss (review of impairment losses) recognized in profit or loss for the year		(12,322	)		(6,520	)
	Other expenses, by nature (1)		27,999			(140,099	)

	Total		(681,027	)		(634,520	)

(1)

Include the variation for finished and in-process products

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

186

Notes to the consolidated financial statements as of June 30, 2012

Note 27 – Gains (losses) from operating activities in the statement of income by function of expenses, exposed according to their nature (continued)

		06/30/2012		06/30/2011
		ThUS$		ThUS$
27.3	Other income

	Discounts obtained from suppliers		588		322
	Compensation received		53		905
	Penalties charged to suppliers		153		169
	Tax recovery		15		-
	Insurance recovered		3,848		395
	Excess in the provision of liabilities with 3rd parties		728		601
	Excess in allowance for doubtful accounts		154		126
	Sale of property, plant and equipment		242		112
	Sale of materials, spare parts and supplies		697		473
	Sale of mining concessions		1,370		613
	Junk sale		96		-
	Indemnities at Minera Esperanza		28		114
	Excess indemnity provision Yara South Africa		335		-
	Excess inventory provision		-		370
	Other services		1		54
	Other operating results		1,145		1,123

	Total		9,453		5,377

		06/30/2012			06/30/2011
		ThUS$			ThUS$
27.4	Administrative expenses

	Employee benefit expenses by nature
	Salaries and wages		(20,108	)		(20,124	)
	Other short-term benefits to employees		(1,788	)		(1,980	)

	Total employee benefit expenses		(21,896	)		(22,104	)

	Other expenses, by nature		(26,391	)		(21,044	)

	Total		(48,287	)		(43,148	)

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

187

Notes to the consolidated financial statements as of June 30, 2012

Nota 27 – Gains (losses) from operating activities in the statement of income by function of expenses, exposed according to their nature (continued)

		06/30/2012			06/30/2011
		ThUS$			ThUS$
27.5	Other expenses by function

	Type of expense of benefits for the employees
	Other benefits for short term employees		(14	)

	Depreciation and amortization expenses
	Depreciation of stopped assets		(3,082	)		(13,747	)

	Impairment loss (review of impairment losses) recognized in profit or loss for the year
	Impairment of allowance for doubtful accounts		(603	)		(1,644	)
	Provision for loss in auction of materials and spare parts		(3,000	)		-

	Subtotal to date		(3,603	)		(1,644	)

	Other expenses, by nature
	Legal Expenses		(388	)		(2,169	)
	Expenses for work paralyzation		(41	)		-
	VAT and other unrecoverable tax		(603	)		(311	)
	Fines paid		(161	)		(70	)
	Assistance services		(17	)		-
	Investment plan expenses		(5,761	)		(5,164	)
	Donations rejected as expense		(761	)		(700	)
	Provision for work closing		(91	)		-
	Indemnities paid		-			(814	)
	Other operating expenses		(1,001	)		(2,244	)

	Subtotal to date		(8,824	)		(11,472	)

	Total		(15,523	)		(26,863	)

		06/30/2012			06/30/2011
		ThUS$			ThUS$
27.6	Other gains (losses)

	Adjustment of Equity Method, prior year		217			-
	Sale of investment in associates		(404	)		-
	Retirement plan provision		-			880
	PNW adjustment of previous year		-			809
	El Toco closing provision		-			3,023
	Other		207			-

	Total		20			4,712

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

188

Notes to the consolidated financial statements as of June 30, 2012

Note 27 – Gains (losses) from operating activities in the statement of income by function of expenses, exposed according to their nature (continued)

27.7	Summary of expenses by nature :	January to june						April to june
		2012			2011			2012			2011
		ThUS$			ThUS$			ThUS$			ThUS$

	Raw material and supplies		(511,081	)		(484,583	)		(278,343	)		(320,108	)

	Types of employee benefits expenses

	Salaries and wages		(81,531	)		(69,256	)		(43,014	)		(37,943	)
	Other short-term employee benefits		(33,674	)		(28,321	)		(19,808	)		(10,080	)
	Termination benefit expenses		(1,169	)		(2,702	)		(798	)		(1,341	)
	Total employee benefit expenses		(116,374	)		(100,279	)		(63,620	)		(49,364	)
	Depreciation and amortization expenses
	Depreciation expense		(94,241	)		(88,890	)		(47,275	)		(46,752	)
	Amortization expense		-			-			492			420
	Impairment loss (review of impairment losses) recognized in profit or loss for the year		(15,925	)		(8,164	)		(5,862	)		(7,150	)
	Other expenses, by nature		(7,216	)		(22,615	)		(23,791	)		46,495

	Total expenses, by nature		(744,837	)		(704,531	)		(418,399	)		(376,459	)

This table corresponds to the summary from Note 27.2 to 27.6 required by the Chilean Superintendence of Securities and Insurance

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

189

Notes to the consolidated financial statements as of June 30, 2012

Note 28 - Income Tax and Deferred Taxes

As of March 31, 2012 and December 31, 2011, this caption comprises the following:

28.1

Current tax assets:

	06/30/2012		12/31/2011
	ThUS$		ThUS$
Monthly provisional income tax payments, Chilean companies current year		1,299		1,758
Monthly provisional income tax payments, Chilean companies prior year		-		-
Monthly provisional income tax payments, foreign companies		1,625		857
Corporate tax credits (1)		-		394
Corporate tax absorbed by tax losses (2)		718		1,756
Total		3,642		4,765

(1)

These credits are available to companies and relate to the corporate tax payment in April of the following year. These credits include, amongst others, training expense credits (SENCE) and property, plant and equipment acquisition credits that are equivalent to 4% of the property, plant and equipment purchases made during the year. In addition, some credits relate to the donations the Group has made during 2011 and 2010.

(2)

This concept corresponds to the absorption of non-operating losses (NOL’s) determined by the company at year end, which must be imputed or recorded in the Retained Taxable Profits Registry (FUT).

In accordance with the laws in force and as provided by article 31, No. 3 of the Income Tax Law, when profits recorded in the FUT that have not been withdrawn or distributed are totally or partially absorbed by NOL’s, the corporate tax paid on such profits (20%, 17%, 16.5%, 16%, 15%, 10% depending on the year in which profits were generated) will be considered to be a provisional payment with respect to the portion representing the absorbed accumulated tax profits.

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

190

Notes to the consolidated financial statements as of June 30, 2012

Note 28 - Income Tax and Deferred Taxes (continued)

28.1

Current tax assets, continued

Taxpayers are entitled to apply for a refund of this monthly provisional income tax payments on the absorbed profits recorded in the FUT registry via their tax returns (Form 22).

Therefore, the provisional payment for absorbed profits (PPAP) recorded in the FUT is in effect a recoverable tax, and as such the Company records it as an asset.

28.2

Current tax liabilities:

Current tax liabilities	06/30/2012		12/31/2011
	ThUS$		ThUS$
Companies incorporated in Chile		22,917		67,543
Companies incorporated abroad		15,743		7,868
Tax under article 21		3		7
Total		38,663		75,418

Capital gains tax is determined based on the determination of the earnings tax to which the fiscal rate is applied, at present, in Chile.

The provision for royalty is determined by applying the tax rate determined for the Net operating income (NOI).

In conclusion, both concepts represent the estimated amount the Company will have to pay for income tax and specific tax on mining.

28.3

Tax earnings

As of June 30, 2012, and December 31, 2011, the Company and its subsidiaries have recorded the following consolidated balances for retained tax earnings, income not constituting revenue subject to income tax, accumulated tax losses and credit for shareholders:

	06/30/2012 ThUS$		12/31/2011 ThUS$
Taxable profits with credit rights (1)		1,266,202		1,053,651
Taxable profits without credit rights (1)		77,374		150,234
Taxable loss		9,310		15,069
Credit for shareholders		299,082		242,143

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

191

Notes to the consolidated financial statements as of June 30, 2012

Note 28 - Income Tax and Deferred Taxes (continued)

28.3

Tax earnings, continued

(1)

The Retained Taxable Profits Registry (FUT) is a chronological registry where the profits generated and distributed by the company are recorded. The object of the FUT is to control the accumulated tax profits of the company that may be distributed, withdrawn or remitted to the owners, shareholders or partners, and the final taxes that must be imposed, called in Chile Global Aggregate Tax (that levies persons resident or domiciled in Chile), or Withholding Tax (that levies persons “Not” resident or domiciled in Chile).

The FUT Register contains profits with credit rights and profits without credit rights, which arise out of the inclusion of the net taxable income determined by the company or the profits received by the company that may be dividends received or withdrawals made during the period.

Profits without credit rights represent the tax payable by the company within the year and filed the following year, therefore they will be deducted from the FUT Registry the following year.

Profits with credit rights may be used to reduce the final tax burden of owners, shareholders or partners, which upon withdrawal are entitled to use the credits associated with the relevant profits.

In summary, companies use the FUT Registry to maintain control over the profits they generate that have not been distributed to the owners and the relevant credits associated with such profits.

28.4

Income tax and deferred taxes

Assets and liabilities recognized in the Statement of financial position are offset if and only if:

The Company has legally recognized before the tax authority the right to offset the amounts recognized in these entries; and

Deferred income tax assets and liabilities are derived from income tax related to the same tax authority on:

(i)

the same entity or tax subject; or

(ii)

different entities or tax subjects who intend either to settle current fiscal assets and liabilities for their net amount, or to realize assets and pay liabilities simultaneously in each of the future periods in which the Company expects to settle or recover significant amounts of deferred tax assets or liabilities.

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

192

Notes to the consolidated financial statements as of June 30, 2012

Note 28 - Income Tax and Deferred Taxes (continued)

28.4

Income tax and deferred taxes, continued

Deferred income tax assets recognized are those income taxes to be recovered in future periods, related to:

(a) deductible temporary differences;

(b) the offset of losses obtained in prior periods and not yet subject to tax deduction; and

The Company recognizes a deferred tax asset when there is certainty that these can be offset with tax income from subsequent periods, losses or fiscal credits not yet used, but solely as long as it is more likely than not that there will be tax earnings in the future against which to charge to these losses or unused fiscal credits.

Deferred tax liabilities recognized refer to the amounts of income taxes payable in future periods related to taxable temporary differences

d.1

Income tax assets and liabilities as of June 30, 2012 are detailed as follows:

	Net position, assets				Net position, liabilities
Description of deferred income tax assets and	Assets		Liabilities		Assets		Liabilities
liabilities	ThUS$		ThUS$		ThUS$		ThUS$
Depreciation		-		-		-		123,472
Doubtful accounts impairment		-		-		4,916		-
Accrued vacations		-		-		2,754		-
Manufacturing expenses		-		-		-		57,012
Unrealized gains (losses) from sales of products		-		-		100,581		-
Fair value of bonds		-		-		2,298		-
Severance indemnity		-		-		-		3,530
Hedging		-		-		-		18,961
Inventory of products, spare parts and supplies		35		-		10,758		-
Research and development expenses		-		-		-		4,393
Tax losses		-		-		1,653		-
Capitalized interest		-		-		-		17,624
Expenses in assumption of bank loans		-		-		-		2,034
Unaccrued interest		-		-		440		-
Fair value of property, plant and equipment		-		-		1,539		-
Employee benefits		-		-		2,770		-
Royalty deferred income taxes		-		-		-		8,230
Other		225		-		4,359		-
Balance to date		260		-		132,066		235,260
Net balance		260		-		-		103,193

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

193

Notes to the consolidated financial statements as of June 30, 2012

Note 28 - Income Tax and Deferred Taxes (continued)

28.4

Income tax and deferred taxes, continued

d.2

Income tax assets and liabilities as of December 31, 2011 are detailed as follows:

	Net position, assets				Net position, liabilities
Description of deferred income tax assets	Assets		Liabilities		Assets		Liabilities
and liabilities	ThUS$		ThUS$		ThUS$		ThUS$
Depreciation		-		-		-		114,151
Doubtful accounts impairment		16				4,045		-
Vacation accrual		9		-		2,633		-
Production expenses		-		-		-		54,747
Unrealized gains (losses) from sales of products		-		-		97,441		-
Bonds fair value		-		-		2,104		-
Employee termination benefits		-		-		-		3,036
Hedging		-		-		-		16,636
Inventory of products, spare parts and supplies		85		-		7,781		-
Research and development expenses		-		-		-		4,598
Tax losses		-		-		1,046		-
Capitalized interest		-		-		-		17,461
Expenses in assumption of bank loans		-		-		-		1,855
Unaccrued interest		-		-		386		-
Fair value of property, plant and equipment		-		-		1,539		-
Employee benefits		-		-		1,177		-
Royalty deferred income taxes		-		-		-		10,035
Other		194		-		5,773		-
Balance to date		304		-		123,925		222,519
Net balance		304		-		-		98,594

SQM

Los Militares 4290,

Las Condes, Santiago, Chile

Tel: (56 2) 425 2000

www.sqm.com

194

Notes to the consolidated financial statements as of June 30, 2012

Note 28 - Income Tax and Deferred Taxes (continued)

28.4

Income tax and deferred taxes, continued

d.3 Deferred taxes related to benefits for tax losses

The Company’s tax loss carryforwards (NOL carryforwards) were mainly generated by losses in Chile, which in accordance with current Chilean tax regulations have no expiration date.

As of June 30, 2012 and December 31, 2011, tax loss carryforwards (NOL carryforwards) are detailed as follows:

	06/30/2012		12/31/2011
	ThUS$		ThUS$

Chile		1,653		1,046
Other countries		-		-

Balances to date		1,653		1,046

Tax losses as of December 31 correspond mainly to Servicios Integrales de Tránsitos y Transferencias S.A., Exploraciones Mineras and Isapre Norte Grande Ltda.

d.4 Unrecognized deferred income tax assets and liabilities

As of June 30, 2012 and December 31, 2011, tax loss carryforwards (NOL carryforwards) are detailed as follows:

	06/30/2012			12/31/2011
	ThUS$			ThUS$
	Assets (liabilities)			Assets (liabilities)

Tax losses (NOL’s)		139			139
Doubtful accounts impairment		81			81
Inventory impairment		1,020			1,020
Pensions plan		(536	)		(536	)
Accrued vacations		29			29
Depreciation		(57	)		(57	)
Other		(19	)		(19	)

Balances to date		657			657

Tax losses mainly relate to the United States, and they expire in 20 years.

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

195

Notes to the consolidated financial statements as of June 30, 2012

Note 28 - Income Tax and Deferred Taxes (continued)

28.4

Income tax and deferred taxes, continued

d.5

Movements in deferred tax assets and liabilities

Movements in deferred tax assets and liabilities as of June 30, 2012 and December 31, 2011 are detailed as follows:

	06/30/2012			12/31/2011
	ThUS$			ThUS$
	Liabilities (assets)			Liabilities (assets)

Deferred tax assets and liabilities, net opening balance		98,290			100,416
Increase (decrease) in deferred taxes in profit or loss		4,836			(3,664	)
Tax Recovery of first category credit absorbed by tax losses		-			1,756
Increase (decrease) in deferred taxes in equity		(193	)		(218	)

Balances to date		102,933			98,290

d.6

Disclosures on income tax expense (income)

The Company recognizes current tax and deferred taxes as income or expenses, and they are included in profit or loss, unless they arise from:

(a)

a transaction or event recognized in the same period or in a different period, outside profit or loss either in other comprehensive income or directly in equity; or

(b)

a business combination

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

196

Notes to the consolidated financial statements as of June 30, 2012

Note 28 - Income Tax and Deferred Taxes (continued)

28.4

Income tax and deferred taxes, continued

Current and deferred tax expenses (income) are detailed as follows :

	06/30/2012			06/30/2011
	ThUS$			ThUS$
	Income (expense)			Income (expense)

Current income tax expense
Current income tax expense		(111,608	)		(76,028	)
Adjustments to prior year current income tax		156			(882	)

Current income tax expense, net, total		(111,452	)		(76,910	)

Deferred tax expense
Deferred tax expense (income) relating to the creation and reversal of temporary differences		(4,836	)		(6,483	)
Deferred tax expense (income) relating changes in tax rates or the application of new taxes		-			-
Deferred tax expense, net, total		(4,836	)		(6,483	)

Tax expense (income)		(116,288	)		(83,393	)

Tax expenses (income) for foreign and domestic parties are detailed as follows:

	06/30/2012			06/30/2011
	ThUS$			ThUS$
	Income (expense)			Income (expense)

Current income tax expense by foreign and domestic parties, net
Current income tax expense, foreign parties, net		(6,948	)		(687	)
Current income tax expense, domestic, net		(104,504	)		(76,223	)

Current income tax expense, net, total		(111,452	)		(76,910	)

Deferred tax expense by foreign and domestic parties, net

Deferred tax expense, foreign parties, net		313			(447	)
Deferred tax expense, domestic, net		(5,149	)		(6,036	)

Deferred tax expense, net, total		(4,836	)		(6,483	)

Income tax expense		(116,288	)		(83,393	)

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

197

Notes to the consolidated financial statements as of June 30, 2012

Note 28 - Income Tax and Deferred Taxes (continued)

28.4

Income tax and deferred taxes, continued

d.7

Equity interest in taxation attributable to equity-accounted investees

The Company does not recognize any deferred tax liability in all cases of taxable temporary differences associated with investments in subsidiaries, branches and associated companies or interest in joint ventures, because as indicated in the standard, the following two conditions are jointly met

(a)

the parent, investor or interest holder is able to control the time for reversal of the temporary difference; and

(b)

It is more likely than not that the temporary difference is not reversed in the foreseeable future.

In addition, the Company does not recognize deferred income tax assets for all deductible temporary differences from investments in subsidiaries, branches and associated companies or interests in joint ventures because it is not possible to meet for the following requirements:

(a)

Temporary differences are reversed in a foreseeable future; and

(b)

The Company has tax earnings, against which temporary differences can be used.

d.8

Revelations on the tax effects of other comprehensive income components:

	06/30/2012
	ThUS$
Income tax related to components of other income and expense with a charge or credit to net equity	Amount before taxes			Expense (income) for income taxes		Amount after taxes
Cash flow hedge		(1,820	)		193		(1,627	)

Total		(1,820	)		193		(1,627	)

	06/30/2011
	ThUS$
Income tax related to components of other income and expense with a charge or credit to net equity	Amount before taxes			Expense (income) for income taxes		Amount after taxes
Cash flow hedge		(3,962	)		793		(3,169	)

Total		(3,962	)		793		(3,169	)

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

198

Notes to the consolidated financial statements as of June 30, 2012

Note 28 - Income Tax and Deferred Taxes (continued)

28.4

Income tax and deferred taxes, continued

d.9

Explanation of the relationship between expense (income) for tax purposes and accounting income

In accordance with paragraph No. 81, letter c) of IAS 12, the Company has estimated that the method that discloses more significant information for the users of its financial statements is the reconciliation of tax expense (income) to the result of multiplying income for accounting purposes by the tax rate in force in Chile. This option is based on the fact that the Parent and its subsidiaries incorporated in Chile generate almost the total amount of tax expense (income) and the fact that amounts of subsidiaries incorporated in foreign countries have no relevant significance within the context of the total amount of tax expense (income.)

Reconciliation of numbers in income tax expenses (income) and the result of multiplying financial gain by the rate prevailing in Chile

	06/30/2012			06/30/2011
	ThUS$			TUS$
	Income (expense)			Income (expense)

Consolidated income before taxes		461,913			329,030
Income tax rate in force in Chile		20	%		20	%

Tax expense using the legal rate		(92,383	)		(65,806	)
Effect of royalty tax expense		(15,431	)		(13,874	)
Tax effect of non-taxable revenue		4,207			2,905
Tax effect of rates in other jurisdictions		(986	)		(1,521	)
Tax effect of tax rates supported abroad		(2,180	)		(3,052	)
Effect on the tax rate arising from changes in the tax rate		-			-
Other effects from the reconciliation between carrying amount and the tax expense (income)		(9,515	)		(2,045	)
Tax expense using the effective rate		(116,288	)		(83,393	)

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

199

Notes to the consolidated financial statements as of June 30, 2012

Note 28 - Income Tax and Deferred Taxes (continued)

28.4

Income tax and deferred taxes, continued

d.10

Tax periods potentially subject to verification:

The Group’s Companies are potentially subject to income tax audits by tax authorities in each country. These audits are limited to a number of interim tax periods, which, in general, when they elapse, give rise to the expiration of these inspections.

Tax audits, due to their nature, are often complex and may require several years. Below, we provide a summary of tax periods that are potentially subject to verification, in accordance with tax regulations in force in the country of origin:

Chile

According to article 200 of Decree Law No. 830, the tax authority shall review for any deficiencies in its settlement and taxes turn giving rise, by applying a requirement of 3 years term from the expiration of the legal deadline when payment should have been made. Besides, this requirement was extended to 6 years term for the revision of taxes subject to declaration, when such declaration was not been filed or has been presented maliciously false.

United States

In the United States, the tax authority may review tax returns for up to 3 years from the expiration date of the tax return. In the event that an omission or error is detected in the tax return of sales or cost of sales, the review can be extended for a period of up to 6 years.

Mexico:

In Mexico, the tax authority can review tax returns up to 5 years from the expiration date of the tax return.

Spain:

In Spain, the tax authority can review tax returns up to 4 years from the expiration date of the tax return.

Belgium:

In Belgium, the tax authority may review tax returns for up to 3 years from the expiration date of the tax return if no tax losses exist. In the event of detecting an omission or error in the tax return, the review can be extended for a period of up to 5 years.

South Africa:

In South Africa, the tax authority may review tax returns for up to 3 years from the expiration date of the tax return. In the event an omission or error in the tax return is detected, the review can be extended for a period of up to 5 years.

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

200

Notes to the consolidated financial statements as of June 30, 2012

Note 29 - Disclosures on the effects of fluctuations in foreign currency

exchange rates

Assets held in foreign currency are detailed as follows:

Class of asset	Currency		06/30/2012 ThUS$		12/31/2011 ThUS$
Current assets:
Cash and cash equivalents		ARS		2		-
Cash and cash equivalents		BRL		37		22
Cash and cash equivalents		CLP		43,709		125,118
Cash and cash equivalents		CNY		367		300
Cash and cash equivalents		EUR		16,788		3,070
Cash and cash equivalents		GBP		15		14
Cash and cash equivalents		IDR		5		5
Cash and cash equivalents		INR		27		45
Cash and cash equivalents		MXN		63		29
Cash and cash equivalents		PEN		16		16
Cash and cash equivalents		YEN		1,547		2,292
Cash and cash equivalents		ZAR		6,985		5,450
Subtotal cash and cash equivalents				69,561		136,361
Other current financial assets		CLF		20,862		-
Other current financial assets		CLP		251,603		129,069
Subtotal other current financial assets				272,465		129,069
Other current non-financial assets		ARS		34		35
Other current non-financial assets		AUD		130		91
Other current non-financial assets		BRL		9		4
Other current non-financial assets		CLF		3		22
Other current non-financial assets		CLP		28,196		46,366
Other current non-financial assets		CNY		32		16
Other current non-financial assets		EUR		5,548		4,504
Other current non-financial assets		INR		-		17
Other current non-financial assets		MXN		225		606
Other current non-financial assets		PEN		17		37
Other current non-financial assets		YEN		24		-
Other current non-financial assets		ZAR		360		1,443
Subtotal other current non-financial assets				34,578		53,141
Trade and other receivables		AUD		518		-
Trade and other receivables		BRL		43		41
Trade and other receivables		CLF		1,056		1,172
Trade and other receivables		CLP		111,684		107,973
Trade and other receivables		CNY		105		1,811
Trade and other receivables		EUR		81,904		60,382
Trade and other receivables		GBP		1,072		488
Trade and other receivables		MXN		135		141
Trade and other receivables		PEN		158		211
Trade and other receivables		ZAR		15,152		16,004
Subtotal trade and other receivables				211,827		188,223
Receivables from related parties		AED		379		379
Receivables from related parties		CLP		522		999
Receivables from related parties		EUR		1,921		150
Receivables from related parties		YEN		-		93
Receivables from related parties		ZAR		902		-
Subtotal receivables from related parties				2,822		1,621
Current tax assets		CLP		214		590
Current tax assets		EUR		198		70
Current tax assets		MXN		436		6
Current tax assets		PEN		327		239
Current tax assets		YEN		-		34
Subtotal current tax assets				1,175		939
Total current assets				592,428		509,354

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

201

Notes to the consolidated financial statements as of June 30, 2012

Note 29 - Disclosures on the effects of fluctuations in foreign currency

exchange rates (continued)

Class of asset	Currency		06/30/2012 ThUS$		12/31/2011 ThUS$
Non-current assets:
Other non-current financial assets		BRL		29		30
Other non-current financial assets		CLP		20		20
Other non-current financial assets		EUR		3		3
Other non-current financial assets		YEN		59		61
Subtotal other non-current financial assets				111		114
Other non-current non-financial assets		BRL		221		238
Other non-current non-financial assets		CLP		554		477
Subtotal other non-current non-financial assets				775		715
Non-current rights receivable		CLF		279		362
Non-current rights receivable		CLP		1,056		709
Subtotal non-current rights receivable				1,335		1,071
Equity-accounted investees		AED		15,473		14,236
Equity-accounted investees		CLP		1,950		1,444
Equity-accounted investees		EGP		-		1,270
Equity-accounted investees		EUR		6,218		3,102
Equity-accounted investees		INR		675		785
Equity-accounted investees		THB		1,513		1,561
Equity-accounted investees		TRY		12,846		12,256
Subtotal equity-accounted investees				38,675		34,654
Intangible assets other than goodwill		CLP		74		42
Intangible assets other than goodwill		CNY		7		-
Subtotal intangible assets other than goodwill				81		42
Property, plant and equipment		CLP		2,674		3,264
Subtotal property, plant and equipment				2,674		3,264
Total non-current assets				43,651		39,860
Total assets				636,079		549,214

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

202

Notes to the consolidated financial statements as of June 30, 2012

Note 29 - Disclosures on the effects of fluctuations in foreign currency exchange rates (continued)

Liabilities held in foreign currency are detailed as follows:

			06/30/2012						12/31/2011
Class of liability	Currency		Up To 90 Days ThUS$		Over 90 Days Up To One Year ThUS$		Total ThUS$		Up To 90 Days ThUS$		Over 90 Days Up To One Year ThUS$		Total ThUS$
Current liabilities
Other current financial liabilities		CLF		5,570		6,983		12,553		3,906		6,640		10,546
Other current financial liabilities		CLP		1,265		831		2,096		1,217		799		2,016
Subtotal other current financial liabilities				6,835		7,814		14,649		5,123		7,439		12,562
Trade and other payables		ARS		-		-		-		3		-		3
Trade and other payables		BRL		312		-		312		320		-		320
Trade and other payables		CHF		143		-		143		221		-		221
Trade and other payables		CLP		120,934		746		121,680		115,694		236		115,930
Trade and other payables		CNY		-		182		182		1,821		-		1,821
Trade and other payables		EUR		15,509		-		15,509		12,265		181		12,446
Trade and other payables		GBP		17		-		17		24		-		24
Trade and other payables		INR		-		6		6		1		-		1
Trade and other payables		MXN		711		2		713		426		-		426
Trade and other payables		PEN		23		-		23		31		-		31
Trade and other payables		YEN		132		-		132		124		-		124
Trade and other payables		ZAR		6,202		53		6,255		2,831		108		2,939
Subtotal trade and other payables				143,983		989		144,972		133,761		525		134,286
Other short-term provisions		ARS		60		-		60		62		-		62
Other short-term provisions		BRL		-		1,354		1,354		-		1,459		1,459
Other short-term provisions		CLP		11		-		11		29		-		29
Other short-term provisions		EUR		24		-		24		140		-		140
Other short-term provisions		MXN		-		-		-		-		250		250
Other short-term provisions		ZAR		-		-		-		-		-		-
Subtotal other short-term provisions				95		1,354		1,449		231		1,709		1,940
Current tax liabilities		ARS		2		-		2		-		-		-
Current tax liabilities		BRL		5		-		5		-		-		-
Current tax liabilities		CLP		-		830		830		-		2,129		2,129
Current tax liabilities		CNY		18		-		18		49		-		49
Current tax liabilities		EUR		-		-		-		-		2,011		2,011
Current tax liabilities		MXN		22		-		22		140		-		140
Current tax liabilities		YEN		-		-		-		-		386		386
Current tax liabilities		ZAR		24		-		24		-		109		109
Subtotal current tax liabilities				71		830		901		189		4,635		4,824
Current provisions for employee benefits		CLP		3,928		2,007		5,935		6,915		22,807		29,722
Current provisions for employee benefits		MXN		202		-		202		-		334		334
Subtotal current provisions for employee benefits				4,130		2,007		6,137		6,915		23,141		30,056

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

203

Notes to the consolidated financial statements as of June 30, 2012

Note 29 - Disclosures on the effects of fluctuations in foreign currency exchange rates (continued)

			06/30/2012						12/31/2011
Class of liabilities	Currency		Up To 90 Days ThUS$		Over 90 Days Up To One Year ThUS$		Total ThUS$		Up To 90 Days ThUS$		Over 90 Days Up To One Year ThUS$		Total ThUS$
Other current non-financial liabilities		BRL		31		26		57		12		44		56
Other current non-financial liabilities		CLP		13,861		15,768		29,629		7,464		36,006		43,470
Other current non-financial liabilities		CNY		20		-		20		12		-		12
Other current non-financial liabilities		EUR		735		-		735		631		-		631
Other current non-financial liabilities		MXN		341		5		346		1,331		53		1,384
Other current non-financial liabilities		PEN		70		-		70		118		-		118
Other current non-financial liabilities		YEN		8		-		8		-		-		-
Other current non-financial liabilities		ZAR		6		-		6		-		-		-
Subtotal other current non-financial liabilities				15,072		15,799		30,871		9,568		36,103		45,671
Total current liabilities				170,186		28,793		198,979		155,787		73,552		229,339

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

204

Notes to the consolidated financial statements as of June 30, 2012

Note 29 - Disclosures on the effects of fluctuations in foreign currency exchange rates (continued)

			06/30/2012								12/31/2011
Class of liabilities	Currency		Over 1 year up to 3 years ThUS$		Over 3 years up to 5 years ThUS$		Over 5 years ThUS$		Total ThUS$		Over 1 year up to 3 years ThUS$		Over 3 years up to 5 years ThUS$		Over 5 years ThUS$		Total ThUS$
Non-current liabilities
Other non-current financial liabilities		CLF		80,492		57,803		307,935		446,230		76,417		12,510		232,938		321,865
Other non-current financial liabilities		CLP		145,005		-		-		145,005		139,770		-		-		139,770
Subtotal other non-current financial liabilities				225,497		57,803		307,935		591,235		216,187		12,510		232,938		461,635
Deferred tax liabilities		CLP		-		-		8		8		57		-		56		113
Deferred tax liabilities		MXN		-		234		-		234		590		-		-		590
Subtotal deferred tax liabilities				-		234		8		242		647		-		56		703
Non-current provisions for employee benefits		CLP		-		-		29,628		29,628		-		-		27,573		27,573
Non-current provisions for employee benefits		MXN		-		-		109		109		-		-		520		520
Non-current provisions for employee benefits		YEN		-		-		510		510		-		-		94		94
Subtotal non-current provisions for employee benefits				-		-		30,247		30,247		-		-		28,187		28,187
Total non-current liabilities				225,497		58,037		338,190		621,724		216,834		12,510		261,181		490,525

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

205

Notes to the consolidated financial statements as of June 30, 2012

Note 30 – Direct cash flow status, proforma

According to what is stated in Memorandum N°2058 of the Superintendencia de Valores y Seguros (Superintendency of Securities and Insurances), here below you will find the Cash Flow Status as of June 30^th, 2012, by using the direct method.

Direct cash flow status

Cash flow status	06/30/2012 ThUS$
Cash flow proceeding from (used in) operation activities

Types of collection per operation activities

Collections proceeding from the sales of goods and services rendering		1,180,598
Other collections for operation activities.		-

Kinds of payments

Payments to suppliers for the el supply of goods and services		(715.527	)
Other payments for operation activities		(3,590	)
Dividends paid		-
Dividends received		10,857
Interests paid		(15,849	)
Interests received		12,784
Reimbursed (paid) capital gains tax		(136,374	)
Other cash incomes (expenses)		-

Net cash flow proceeding from (used in) operation activities		332,900

Cash flow proceeding from (used in) investment activities
Cash flow proceeding of the loss of control of subsidiaries or other businesses		961
Other payments to acquire participations in joint businesses		(4,197	)
Amounts proceeding from properties, plant, and equipment sale		1,626
Purchase of properties, plant, and equipment		(188,904	)
Cash advances and loans to third parties		(686	)
Other cash incomes (expenses)		(199,125	)

Net cash flow proceeding from (used in) investment activities		(390,325	)

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

206

Notes to the consolidated financial statements as of June 30, 2012

Direct cash flow status (continued)

Cash flow status	06/30/2012 ThUS$
Cash flow proceeding of (used in) financing activities

Amounts proceeding from the issuance of other capital instruments		-
Amounts proceeding from long term loans		296,502
Amounts proceeding from short term loans		-
Total amounts proceeding from loans		296,502
Loans payments		(160,000	)
Other cash incomes (expenses)Dividends paid		(83,064	)
		(18,316	)

Flujos de efectivo netos procedentes de (utilizados en) financing activities		35,122

Net increase (diminuition) Incremento neto (decrease) in cash and equivalent to cash before the effects of the changes in the exchange rate		(22,303	)

Effect of the variation in the exchange rate over the cash, and equivalents to cash		(7,410	)
Net Increase (decrease) of cash, and equivalent to		(29,713	)

Cash and equivalent to cash at the beginning of the period		444,992

Cash and equivalent to cash at the end of the period		415,279

Note 31 - Subsequent events

31.1

Authorization of the financial statements

The consolidated financial statements of Sociedad Química y Minera de Chile S.A. and subsidiaries prepared in accordance with International Financial Reporting Standards for the period ended June 30, 2012 were approved and authorized for issuance by the Board of Directors at their meeting held on August 28, 2012.

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

207

Notes to the consolidated financial statements as of June 30, 2012

31.2

Disclosures on subsequent events

At the 37^th Ordinary Shareholder’s Meeting held on April 26, 2012, it was agreed to pay a final dividend of US$1.03679 per share due to the net profits obtained during the commercial year 2011. US$0.73329 per share must be discounted from such dividend payment due to the interim dividend already paid. In line with this, the balance, amounting to US$ 0.30350 per share, will be paid and distributed among shareholders of the Company who are registered with their respective registry as of the fifth business day prior to the day in which this dividend will be paid. Such amount will be paid in its equivalent in Chilean pesos according to the value of the “Observed dollar” or “USA dollar” published in the Official Gazette as of April 26, 2012.

Management is not aware of any other significant events that occurred between June 30, 2012 and the date of issuance of these consolidated financial statements that may significantly affect them.

31.3

Detail of dividends declared after the balance sheet date

As of the closing date of these financial statements, there are no dividends declared after the reporting date.

SQM
Los Militares 4290,
Las Condes, Santiago, Chile
Tel: (56 2) 425 2000
www.sqm.com

208