Moody's lowers SQM rating outlook due to lithium uncertainty
SANTIAGO – Moody's Ratings affirmed the credit rating of Chilean lithium miner SQM but lowered its outlook to negative from stable due to uncertainty around lithium revenue, the agency said on Thursday.
Moody's also noted that SQM's significant capital expenditure and dividend payments have heightened the company's reliance on debt.
Global prices for lithium, a critical component of electric vehicle batteries, have plunged nearly 90% since their peak in late 2022, causing producers worldwide to slash workforces and pull back on plans.
SQM began laying off 5% of its Chilean workforce last month.
Moody's said SQM, the world's second-largest lithium miner, maintains a strong market position in lithium and iodine but still faces risks from depending on debt financing for capital projects, as well as global trade tensions.
SQM's debt surged from $2.9-billion at the end of 2023 to $4.7-billion by March 2025, accompanied by a more than 50% drop in EBITDA, according to Moody's.
The ratings agency warned that SQM's ratings could be downgraded if the company fails to reduce its debt-to-EBITDA ratio to below 2.5x within 12 to 18 months, or improve its diversification and stable cash flow generation.
Moody's also noted the importance of lithium prices.
"These market conditions are critical, as they affect SQM's ability to deleverage and return debt to EBITDA levels," it said.
Comments
Projects
Latest Multimedia
Latest News
Showroom
REELIN is Currently the largest supplier of Bearings to Transnet. We have contracts to supply bearings, draft gears slackadjusters and other...
VISIT SHOWROOM
Developed to exceed the latest EN 15964 standards for police breathalysers proving that it will remain accurate and reliable for many years to come.
VISIT SHOWROOM
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation
