Good morning, and welcome to the SQM Fiscal Year 2012 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mark Fones, Vice President of Finance and Investor Relations. Please go ahead.

Good morning, everyone, and welcome to SQM's Fiscal Year 2012 Earnings Conference Call. For your information, this conference call will be recorded and is being webcast live. You may access the webcast later on at our website, www.sqm.com. Joining me today, our speakers are Patricio Contesse, our Chief Executive Officer; Patricio de Solminihac, Executive Vice President and Chief Operating Officer; and Ricardo Ramos, CFO. Before we begin, let me remind you that statements in this conference concerning the company's business outlook, future economic performances, anticipated profitability, revenues, expenses or other financial items, anticipated cost synergies and product or service line growth, together with all the statements that are not historical facts, are considered forward-looking statements, and that term is defined under the federal securities laws. Any forward-looking statements are estimates, reflecting the best estimate of SQM based on currently available information and involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those stated in such statements. Risks, uncertainties and factors that could affect the accuracy of such forward-looking statements are identified in the public filings made with the Securities and Exchange Commission, and forward-looking statements should be considered in light of those factors. I now leave you with our CEO, Patricio Contesse, for brief comments before we move to Q&A.

Good morning, and welcome to SQM 2012 earnings conference call. I will start with a brief introduction before I open up the lines to questions. We are pleased with our performance throughout 2012. We posted the highest sales volume and revenues in our potassium, industrial chemicals and the lithium and derivative business line when compared to 2011. In addition to these strong results, we finalized some major capital investment in 2012. We plan to keep this momentum during the next year. In 2013, we expect the lithium line and demand to continue growing at a healthy rate. We also expect new supplies mainly from existing competitors, which have been under development in recent years relative to the market. For the [ph] on solar salts, our recent expansion, we will increase our sales volume in 2013 in potassium business line and expect to see market demand recover. We do see some new challenges related to the fertilizer side when the markets who may have contract close at the lower price that they've seen in the early months of 2012. We also believe that the product delay for solar thermal energy storage probably will have an impact on our industrial chemical business line. In general, we believe our unique synergies, diverse products and our various competitive advantages will support us in our effort to maximize shareholder value and profits in the coming years. I thank you for joining today. We'll now answer any question that you may have.

Thank you, Patricio. Operator, we may go now to Q&A session.

[Operator Instructions] And our first question will come from Andy Cash of SunTrust Robinson Humphrey.

A question around lithium. Could you talk about any plans that you might have to expand your lithium carbonate or lithium hydroxide capacity? And when do you plan to do that if you plan to do that?

Well, as part of the CapEx, we'll have expansion to the lithium capacity. We are today at total capacity of 48,000, and we're looking forward to be in the range of 60,000 in the near future.

Okay. So near future, probably in the next 12 months?

Next year.

Next year. Next year being 2014?

Yes.

Okay. I was just up at the lithium -- where the conference up there in Canada, Toronto, Canada, the mining conference. And Lithium Americas was up there and Canada Lithium also up there. Are you expecting either one of those companies to be successful, making lithium carbonate? Or do you think that they'll be unsuccessful? And who do you...

It's not think adjustment[ph] There are too many things in the world saying that they're going to take -- come with new expansions or new facilities. And the last year, the only one that really had appeared and with a lot of problem is Galaxy. So for us, it's hard to comment because what happened in the reality of new product coming on stream. So anyhow, the demand on the others side in terms of lithium is very strong, so with today that means that there is pay without creating big disturbance from newcomers if that doesn't happen to be.

Okay. Do you think that -- well, who do you expect will add capacity this year and next year?

Excuse me?

Which companies do you think will add capacity, lithium capacity?

So I think besides SQM, what would happen with the Australian operation in Talison and the adjuration with China is something to be seen too. Of course, the Canadian company talked about its chances of possibility that they have in our mind. I think those are the one that we can see coming on stream.

So sorry, just to make sure I understand, you both -- you expect Talison and Galaxy to add capacity?

Galaxy I am not sure about it. I don't think so. I think Talison because the acquisition with the Chinese company that could develop some new potential possibility of producing more in China with those. [indiscernible] there is something to be seen, I'm just speculating on them. The only one we've heard is the one you have mentioned in Canada that could come onstream. The other ones are still -- beside ourself, I don't see any other in a complete way coming onstream in the near future.

Okay, So Canada Lithium is a possibility.

Yes.

Okay. And then FMC has been having some difficulties in their plant in Argentina. Do you think that, that situation is corrected? Do you think they're producing now? Or is that...

We're not quite aware. We know that they have problem. They closed out the operation of Poland [ph]. They have announced that they have sold Apollo [ph]. So they have announced, so must be true.

And our next question is from Fernando Ferreira of Bank of America Merrill Lynch.

Patricio, just had a question on iodine, if you can discuss a little bit how the supply evolving recently, we've seen spot prices come to a closer level to contracts. And then you mentioned in the press release that you saw new supply coming to the market and also new expansion in 2013. So just from a supply perspective, what should we expect in 2013 and '14, please?

Just thinking about prices, it's normal that one thing start to stabilize, the principal market should come near to what it is normal contract price. And that's the way it has going on. Now we have announced and it's been publicly known by anyone that Algota [ph] that belong to FAIF [ph] have developed a new plant, and that it's producing more this year than the last year. And 3 of that in the supply side will affect our supply, our sales and volumes. That is probably known. We have said so and we have -- Algota also have announced since a long time ago their expansion plans and what they were doing in that operation.

Sure. And this strategy going forward will be like 2009 to try to, I know it's difficult to say, but to try to keep prices stable and take volumes as a result?

We cannot discuss that loudly because it's part of the strategy. Not being untransparent because I don't want to be. But clearly, I don't want to give tools to our competitors.

And the next question is from Craig Shaw of HLM.

I had a question -- couple questions on SPN. I was wondering if you think we have seen the worst of the impact from, I believe, that Haifa getting back into the market last year. And the second question I have on SPN was it looks like gross margins came down a bit in the fourth quarter, and I was just curious if you could explain why that was.

Well, we -- Haifa, produced the most it could in 2012. They don't have extra capacity. So the more they can do this year what they did last year. And anyhow, we've heard that we have not put in any of our decision, they have -- they're facing some problem with someone. But anyhow, the worst case scenario, it can't affect the market more than they did last year because there is no extra capacity of potassium nitrate in any other place in the world, but just in SQM. In terms of margins, we have to say that potassium nitrate is somewhat related with potassium chloride, not in the nitrate but in the chloride. So as chloride go down, we were having ratios being hit, and the pricing of product inside the formula were historically high and they are still historically high. But anyhow, they have suffered an adjustment related to the potash chloride scenario in the world in terms of price. So that really affect margins. Also, in terms of advantages, speaking not only for potash or potassium nitrate or whatever, clearly, we have very recent surprises caused to be an increase. One is the U.S. dollar value and one is the very tight situation of employment and more importantly, in the mining. But it really hasn't -- the general economy and employment in Chile is practically none in terms of practical. It says 6.2, but in the practical point of view, it's almost none. And that create a big tension between supply and demand for the labor force. And skillful people are even more scarce, so that has been affecting general cost of the mining industry, and we are not exception of that.

[Operator Instructions] And our next question is from Juan Tavarez of Citi.

This question is regarding your potash segment. Specifically could you remind us how much new capacity was added in 2012 And how much still has to be executed for 2013? And maybe give us a sense of your overall utilization rates in this segments for this year and next year?

So still the production were in the range of 2 million metric tons. We are making investment to go to 2.2 million to 2.25 million in the next 1.5 years from now. So that is the situation in terms of supply, in terms of production of our potash situation.

And do you see a normal ramp-up phase for this production? Or are you expecting to utilize less of your installed capacity?

We -- this is going to be more of the same as last year in terms of production. We don't see, but clearly, we are going to show much more this year compared to last year, and we mitigate somehow the less return because of price. We are estimating in terms of volumes and potassium, MOP, SOP in terms of 20% more volume. Even though the production is the same, that is due to the quality of the inventory went up in 2012, but now we are improving and we're going to be able to sell this year.

Okay, great. And could you remind us how much are you forecasting for CapEx for this year and how much would be toward expansion and how much is maintenance CapEx?

So I will -- in the detail because I'm not the CFO, but we're in the range of $500 million investment throughout this year.

Yes. Thank you, Patricio. We have an investment for this year close to $500 million. And during 2012, was close to $440 million. The most important project we're under development today is expansion of potash. As Patricio explained, we expect to increase our potash capacity close to 250,000 metric tons of capacity. The other main projects are related to the nitrate scenario in production where we're finishing our expansion in the first region, we're finishing some key projects in quality and new capacity and new products in the nitrates area, projects that were started, I think, 1.5 years ago. We're finishing now during 2013. Those are the main projects that we have for this year.

And the next question is a follow-up from Fernando Ferreira of Bank of America Merrill Lynch.

Just had a follow-up on the potash side. If volumes that you mentioned, Patricio -- how much do you think or you expect to sell to the market this year in MOP? And then how much you expect to sell into Brazil as well, please?

Well, in terms of volume, we reached the volume of 2.2 almost in 2012. We're looking for 1.5. That range for this year, around 300,000 metric tons more. We're estimating in Brazil a volume in the range of 700,000 metric tons.

And our next question comes from Mike Harrison of First Analysis.

Was just hoping to dig in a little bit deeper on the lithium pricing activities, seeing that second half pricing looks like it was down versus the first half. And I was wondering if that could be attributed a little bit to differences in price activity in battery grade, lithium carbonate versus technical grade lithium carbonate. Did you see any differences in how those prices were tracking during the year?

Let me say that we have a different information than you in terms of price. Prices were, in 2011, in the range of $4,500. Last year, the pricing was in the range of $5,000. It could be maybe $10 less average 1 semester and 1 quarter to the other. But pricing has been more or less at the same level. And they increased more than 10% during 2012 and '11. And so the market of lithium is very, very strong, and demand is growing very, very fast. So we see -- we're quite optimistic in that business.

If I do the math, though, around your volumes and sales during the second half of 2012 compared to the first half of 2012, it does look like pricing came down through the course of the year. Is that not correct?

[indiscernible] companies are for confusion. There are different mix. You have either hydroxide or lithium carbonate or lithium chloride, and clearly those have different price and give you some more volume than the other. Maybe the average sounds less, but it does on lithium carbonate equivalent. We have been selling in a very constantly [ph] pricing in the year and higher than 2011. The market also will grow, the volume last year in about 10%, so very strong demand in 2012 compared to 2011. The market is growing over 2 digits in terms of demand.

All right. And as I think about the difference in pricing between battery grade materials and technical grade materials, are you seeing greater pricing strength right now in battery grade materials and maybe a little bit weaker pricing in technical grade?

No, no. We are seeing a strong position as I've told you before.

This concludes our question-and-answer session. I would like to turn the conference back over to Mark Fones for any closing remarks.

Well, thank you very much for joining us today, and we hope to have you with us in the next conference call. Thank you. Goodbye.