INVESTMENT IDEA GENERATION

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Lithium / Specialty Chemicals / Mining

Focus: Chile & Latin America Lithium Triangle

Screening Criteria: Market Cap >$1B | NYSE / Santiago Listed | Lithium / Specialty Chemicals Exposure

March 2026

Agentic Finance Chile

1. Screening Methodology

This screening exercise identifies investable lithium and specialty chemicals companies with exposure to the Latin America Lithium Triangle (Chile, Argentina, Bolivia) and the broader global lithium value chain. We apply quantitative and qualitative filters to generate a ranked short list with SQM as the primary coverage candidate.

1.1 Screening Criteria

2. Long List: Universe of Candidates (15 Companies)

Starting universe of all listed companies with meaningful lithium or specialty chemicals exposure and market cap above USD 1 billion.

3. Quantitative Filters Applied

3.1 Filter Results

Applying all six screening criteria to the long list:

3.2 Companies Passing Quantitative Screen (6)

After applying all filters, 6 companies pass to the qualitative assessment phase:

1. SQM (NYSE: SQM) — Full pass, 6/6 criteria
2. Albemarle (NYSE: ALB) — Full pass, 6/6 criteria
3. Rio Tinto (NYSE: RIO) — Conditional pass (lithium <10% of revenue, diversified miner)
4. Sigma Lithium (NASDAQ: SGML) — Pass with marginal liquidity
5. Lithium Argentina (NYSE: LAR) — Pass with marginal liquidity
6. Eramet (Euronext: ERA) — Partial pass (not NYSE/Santiago but strong LatAm exposure)

4. Qualitative Assessment

Each company is scored on 5 qualitative factors (1-5 scale) relevant to the investment thesis for lithium exposure with LatAm focus:

Scoring notes: Cost Position = production cost competitiveness (brine advantage). Growth = capacity expansion pipeline. LatAm Exposure = % revenue from lithium triangle. Diversification = non-lithium earnings stability. ESG/Regulatory = sovereign risk, environmental, governance.

5. Short List: Final Candidates

Combining quantitative screens and qualitative scores, the final short list for coverage initiation:

5.1 Tier 1 — Primary Coverage Candidate

SQM (NYSE: SQM) — Score: 23/25 — RECOMMENDED FOR INITIATION

• World's largest lithium producer by market cap ($10.5B); lowest-cost brine operations from Salar de Atacama
• Dual earnings engine: Lithium (50% rev, 45% GP) + Iodine (23% rev, 42% GP) — unique diversification
• Expanding to 340K mt combined Li2CO3 + LiOH capacity by 2026 (+62% volume growth)
• Codelco-SQM JV secures 2060 resource access; IRA-compliant supply chain for US OEMs
• Key risk: Chilean regulatory uncertainty (Tianqi lawsuit, presidential transition)
• FY2025 revenue: USD 4,576M; returned to profitability after lithium price trough

5.2 Tier 2 — Monitoring / Future Coverage

Albemarle (NYSE: ALB) — Score: 19/25

• Global #2 lithium producer with diversified geography (US, Chile, Australia)
• Strong downstream conversion capacity (lithium hydroxide for NMC cathodes)
• Less dependent on single jurisdiction vs SQM; lower sovereign risk profile
• Higher cost structure; recent capacity cuts to manage through price trough

Rio Tinto (NYSE: RIO) — Score: 19/25

• Arcadium acquisition ($6.7B) makes Rio a top-3 lithium producer globally
• Targets >200K mt LCE capacity by 2028 from acquired Tier 1 assets
• Lithium remains <5% of consolidated revenue — not a pure-play; better as portfolio diversifier

5.3 Tier 3 — Watch List

Sigma Lithium (NASDAQ: SGML) — Score: 17/25

• Brazilian hard-rock producer with green lithium positioning; high growth but single-asset risk

Lithium Argentina (NYSE: LAR) — Score: 16/25

• Cauchari-Olaroz brine operation (51% Ganfeng JV); pure Argentine exposure with policy tailwinds

6. Final Recommendation

INITIATE COVERAGE: SQM (NYSE: SQM)

SQM is the highest-conviction name in our screen for the following reasons:

1. Best-in-class cost position: Salar de Atacama brine at ~1,800 ppm Li provides the lowest production costs globally (~$4,000-5,000/t LCE cash cost), ensuring profitability across the lithium price cycle.
2. Unique diversification moat: No other lithium pure-play offers the iodine + SPN earnings buffer. Iodine delivered 42% of gross profit in FY2025 at record prices — this is genuinely unique.
3. Volume growth catalyst: Capacity expansion from ~210K mt to 340K mt by 2026 provides >60% volume uplift into a recovering lithium price environment — significant operating leverage.
4. IRA/FTA structural advantage: Chile's FTA status with the US means SQM lithium qualifies for IRA tax credits, unlike Chinese-sourced material. This is a durable competitive advantage for the US EV supply chain.
5. 2060 resource visibility: Codelco-SQM JV removes the Corfo lease expiration overhang, providing 35+ years of secured resource access — the longest visibility in the industry.

Key risks to monitor: Tianqi legal challenge to JV, Chilean presidential transition (early 2026), Argentine supply competition, and sodium-ion battery technology substitution for low-range applications.

Disclaimer

This screening analysis is prepared for informational and educational purposes only. It does not constitute investment advice, a recommendation, or an offer to buy or sell any security. All data sourced from publicly available filings, research reports, and industry databases. Forward-looking statements subject to material risks and uncertainties.

Sources: SQM IR (FY2025 earnings), Albemarle IR, Rio Tinto press releases, USGS, Cochilco, S&P Global, Benchmark Mineral Intelligence, Investing News Network, Straits Research, company filings.

Prepared by Agentic Finance Chile | March 2026