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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
For the nine month period ended on September 30, 2002.

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, 6th Floor, 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 	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   	
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82___________

	

On November 13, 2002, 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 nine month period ended on September 30, 2002. 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 accounting principles generally accepted in Chile and does not include a reconciliation of such information to accounting principles generally accepted in the United States of America.
THIS REPORT IS AN ENGLISH TRANSLATION OF, AND A CHILEAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES PRESENTATION OF, A NINE MONTH PERIOD ENDED SEPTEMBER 30, 2002 REPORT FILED WITH THE SUPERINTENDENCIA DE VALORES Y SEGUROS (SVS) IN CHILE.
TABLE OF CONTENTS
 	 	 	 	Page	 	
 	 	 	 	 	 	
•	 	Consolidated Balance Sheets, as of September 30, 2002 and 2001	 	2	 	
•	 	Consolidated Statements of Income, for the Nine month period ended September 30, 2002 and 2001	 	4	 	
•	 	Consolidated Statements of Cash Flows, for the nine month period ended September 30, 2002 and 2001	 	5	 	
•	 	Notes to the Consolidated Financial Statements	 	7	 	
 
THE FINANCIAL STATEMENTS SUBMITTED IN THIS DOCUMENT WERE PREPARED PURSUANT TO ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN CHILE, AND UNLESS OTHERWISE INDICATED, FIGURES ARE IN US DOLLARS.	

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SIGNATURES 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. 
 
SOCIEDAD QUIMICA Y MINERA DE CHILE S.A. 

Conf: /s/ Ricardo Ramos
Ricardo Ramos
Chief Financial Officer 

Date: December 4, 2002. 

Consolidated Financial Statements
SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
As of September 30, 2002 and 2001
and for the years ended September 30, 2002 and 2001
Contents
Consolidated Financial Statements
Consolidated Balance Sheets 	 	2	
Consolidated Statements of Income	 	4	
Consolidated Statements of Cash Flows	 	5	
Notes to the Consolidated Financial Statements 	 	7	

Ch.$	—	 	Chilean pesos	
Th.Ch. $	—	 	Thousands of Chilean pesos	
US$	—	 	United States dollars	
Th.US$	—	 	Thousands of United States dollars	
UF	—	 	The UF is an inflation-indexed, Chilean peso-denominated monetary unit. The UF rate is set daily in advance, based on the change in the Consumer Price Index of the previous month.	
Th.UF	—	 	Thousands of UFs.	

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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A. 
Consolidated Balance Sheets 
 	 	As of September 30,	 		
					
  	 	2002
Th.US$	 	2001
Th.US$	 		
ASSETS	 		 		 		
 	 	 	 	 	 	 		
Current assets	 	 	 	 	 	 		
 	 	 	 	 	 	 		
Cash and cash equivalents 	 	39,238	 	 	154,107	 		
Accounts receivable, net 	 	111,748	 	 	123,536	 		
Other accounts receivable, net	 	9,710	 	 	14,223	 		
Accounts receivable from related companies	 	37,750	 	 	63,356	 		
Inventories	 	227,745	 	 	201,475	 		
Recoverable taxes 	 	11,372	 	 	13,040	 		
Prepaid expenses	 	3,603	 	 	3,488	 		
Deferred income taxes	 	—	 	 	136	 		
Other current assets 	 	17,223	 	 	16,039	 		
 	 		 		 		
Total current assets	 	458,389	 	 	589,400	 		
 	 		 		 		
Property, plant and equipment, net	 	684,598	 	 	714,220	 		

Investments in related companies	 	77,542	 	 	62,047	 		
Goodwill	 	11,565	 	 	9,758	 		
Negative goodwill	 	(956	)	 	(1,370	)		
Intangible assets, net	 	4,021	 	 	4,178	 		
Accounts receivable from related companies long term	 	509	 	 	825	 		
Long-term accounts receivable	 	11,969	 	 	12,561	 		
Other assets	 	49,157	 	 	62,114	 		
 	 		 	 		 	
Total assets	 	1,296,794	 	 	1,453,733	 		
 	 		 	 		 	
The accompanying notes form an integral part of these consolidated financial statements.
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A. 
Consolidated Balance Sheets 
 	 	As of September 30,	 	
 	 		 	
  	 	2002
Th.US$	 	2001
Th.US$	 	
 	 		 		 	
LIABILITIES AND SHAREHOLDERS’ EQUITY	 	 	 	 	 	 	
 	 	 	 	 	 	 	
Current liabilities	 	 	 	 	 	 	
 	 	 	 	 	 	 	
Short-term bank debt	 	996	 	 	93,903	 	
Current portion of long-term debt	 	61,668	 	 	2,966	 	
Dividends payable	 	301	 	 	219	 	
Accounts payable	 	44,039	 	 	35,950	 	
Other accounts payable	 	1,258	 	 	2,156	 	
Notes and accounts payable to related companies	 	5,680	 	 	9,079	 	
Accrued liabilities	 	13,443	 	 	16,818	 	
Payroll withholdings	 	3,408	 	 	3,450	 	
Income taxes	 	2,327	 	 	1,086	 	
Deferred income taxes	 	446	 	 	—	 	
Other current liabilities	 	78	 	 	140	 	
 	 		 		 	
Total current liabilities	 	133,644	 	 	165,767	 	
 	 		 		 	
Long-term liabilities	 	 	 	 	 	 	
 	 	 	 	 	 	 	
Long-term debt	 	280,000	 	 	428,000	 	
Other accounts payable	 	3,652	 	 	4,566	 	
Deferred taxes	 	11,902	 	 	5,693	 	
Long-term provision	 	7,957	 	 	7,498	 	
Other liabilities	 	—	 	 	90	 	
 	 		 		 	
Total long-term liabilities	 	303,511	 	 	445,847	 	
 	 		 	 		 	
Minority interest	 	21,919	 	 	23,377	 	
 	 		 		 	
Shareholders’ equity	 	 	 	 	 	 	
 	 	 	 	 	 	 	
Paid-in capital	 	477,386	 	 	477,386	 	
Other reserves	 	122,424	 	 	126,013	 	
Retained earnings	 	237,910	 	 	215,343	 	
 	 		 		 	
Total shareholders’ equity	 	837,720	 	 	818,742	 	
 	 		 	 		 	
Total liabilities and shareholders’ equity	 	1,296,794	 	 	1,453,733	 	
 	 		 		 	
The accompanying notes form an integral part of these consolidated financial statements.
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Consolidated Statements of Income
  	 	For the years ended
 September 30, 	 	
 	 		 	
  	 	2002
Th.US$	 	2001
Th.US$	 	
Operating results	 		 		 	
 	 	 	 	 	 	 	
Sales	 	413,771	 	 	398,965	 	
Cost of sales	 	(320,773	)	 	(315,491	)	
 	 		 			 	
Gross margin	 	92,998	 	 	83,474	 	
Selling and administrative expenses	 	(32,331	)	 	(30,774	)	
 	 		 			 	
Operating income	 	60,667	 	 	52,700	 	
 	 		 			 	
Non-operating results	 	 	 	 	 	 	
 	 	 	 	 	 	 	
Non-operating income	 	9,046	 	 	14,410	 	
Non-operating expenses	 	(29,699	)	 	(31,640	)	
 	 		 			 	
Non-operating loss	 	(20,653	)	 	(17,230	)	
 	 		 			 	
Income before income taxes	 	40,014	 	 	35,470	 	
 	 	 	 	 	 	 	
Income taxes	 	(8,086	)	 	(7,359	)	
 	 		 			 	
Consolidated income	 	31,928	 	 	28,111	 	
Minority interest	 	(1,855	)	 	(1,591	)	
 	 		 			 	
Net income before extraordinary items	 	30,073	 	 	26,520	 	
 	 	 	 	 	 	 	
Amortization of negative goodwill	 	310	 	 	310	 	
Extraordinary items	 	 —	 	 	(4,784	)	
 	 		 			 	
Net income for the year	 	 30,383	 	 	22,046	 	
 	 		 			 	
The accompanying notes are an integral part of these consolidated financial statements.
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Consolidated Statements of Cash Flows
 	 	  For the years ended
September 30,	 	
 	 		 	
 	 	2002
Th.US$	 	2001
Th.US$	 	
 	 		 		 	
Cash flows from operating activities	 	 	 	 	 	 	
 	 	 	 	 	 	 	
Net income for the year	 	30,383	 	 	22,046	 	
Loss on sale of fixed assets	 	( 50	)	 	11	 	
 	 	 	 	 	 	 	
Charges (credits) to income not representing cash flows:	 	 	 	 	 	 	
 	 	 	 	 	 	 	
Depreciation expense	 	46,357	 	 	48,325	 	
Amortization of intangible assets 	 	146	 	 	142	 	
Write-offs and accruals	 	9,642	 	 	2,294	 	
Accrued equity gain on investments in related companies	 	(2,742	)	 	(1,624	)	
Accrued equity loss on investments in related companies	 	138	 	 	58	 	
Amortization of goodwill 	 	896	 	 	605	 	
Amortization of negative goodwill 	 	(310	)	 	(310	)	
Translation adjustment	 	376	 	 	702	 	
Exchange difference	 	357	 	 	(477	)	
Other credits to income not representing cash flows	 	(5,244	)	 	(8,133	)	
Other charges to income not representing cash flows	 	15,016	 	 	16,250	 	
 	 	 	 	 	 	 	
Net changes in operating assets and liabilities	 	 	 	 	 	 	
 	 	 	 	 	 	 	
Trade accounts receivable	 	(3,113	)	 	(14,575	)	
Inventories	 	(19,409	)	 	7,105	 	
Other assets	 	4,920	 	 	4,092	 	
Accounts payable	 	14,469	 	 	602	 	
Interest payable	 	(6,055	)	 	(4,194	)	
Net income taxes payable	 	85	 	 	( 2,053	)	
Other accounts payable	 	(1,816	)	 	(344	)	
VAT and taxes payable 	 	900	 	 	(1,161	)	
Gain from minority interest	 	1,855	 	 	1,591	 	
 	 		 			 	
Net cash flows from operating activities 	 	86,801	 	 	70,952	 	

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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Consolidated Statements of Cash Flows (Continued)
  	 	For the years ended
September 30, 	 	
 	 		 	
  	 	2002
Th.US$	 	2001
Th.US$	 	

Cash flows from financing activities	 	 	 	 	 	 	
Bank debt	 	—	 	 	115,663	 	
Payment of dividends 	 	(16,082	)	 	( 14,915	)	
Payment of loans	 	(130,584	)	 	(42,200	)	
Payment of bonds payable	 	—	 	 	(2,941	)	
 	 		 	 		 	
Net cash flows from financing activities	 	(146,666	)	 	55,607	 	
 	 		 	 		 	
Cash flows from investing activities	 	 	 	 	 	 	
Sales of fixed assets	 	661	 	 	126	 	
Sales of investments	 	13,974	 	 	14,750	 	
Other income	 	614	 	 	8,284	 	
Additions to property, plant and equipment	 	(25,450	)	 	(17,513	)	
Payment of capitalized interest	 	(1,678	)	 	(1,966	)	
Permanent investments	 	(9,801	)	 	(8,075	)	
Investments in financial instruments	 	(224	)	 	—	 	
 	 		 	 		 	
Net cash flows from investing activities	 	(21,904	)	 	(4,394	)	
 	 		 	 		 	
Net cash flows for the period	 	(81,769 	)	 	122,165	 	
 	 	 	 	 	 	 	
Impact of inflation on cash and cash equivalents	 	(529	)	 	(786	)	
 	 		 	 		 	
Net change in cash and cash equivalents	 	(82,298	)	 	121,379	 	
 	 	 	 	 	 	 	
Beginning balance of cash and cash equivalents	 	121,536	 	 	32,728	 	
 	 		 	 		 	
Ending balance of cash and cash equivalents	 	39,238	 	 	154,107	 	

 	 	 	 	 	 	 	
Interest and income taxes paid in 2002 and 2001 are as follows:	 	 	 	 	 	 	

Interest paid	 	26,657	 	 	25,109	 	
Taxes paid	 	85	 	 	(2,053	)	
The accompanying notes are an integral part of these consolidated financial statements.
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A. 
Notes to the Consolidated Financial Statements 
September 30, 2002 and 2001 
Note 1 — General 
Sociedad Química y Minera de Chile S.A. was registered on March 18, 1983 under No. 0184 of the Chilean Superintendency of Securities and Insurance.
The subsidiaries registered in the securities registry of the Chilean Superintendency of Securities and Insurance are as follows:
Soquimich Comercial S.A. registered under No. 0436 on January 11, 1993.
SQM Potasio S.A. registered under No. 0728 on March 20, 2001.
SQM Salar S.A. registered under No. 0731 on April 17, 2001.
Note 2 — Summary of Significant Accounting Policies
 	 	 	
a) 	 	Basis for the preparation of the consolidated financial statements	
 	 	 	
 	 	The accompanying consolidated financial statements have been prepared in U.S. dollars in accordance with accounting principles generally accepted in Chile (Chilean GAAP) and the regulations of the Chilean Superintendency of Securities and Insurance.	
 	 	 	
b)	 	Period	
 	 	 	
 	 	These consolidated financial statements have been prepared for the nine-month period between January 1st and September 30, 2002 and 2001.	
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c) 	 	Reporting currency and monetary correction	
 	 	 	
 	 	The financial statements of the Company are prepared in U.S. dollars. A significant portion of the Company’s operations are transacted in U.S. dollars and the U.S. dollar is the currency of the primary economic environment in which the Company operates.	
 	 	 	
 	 	The Parent Company and those subsidiaries which maintain their accounting records in U.S. dollars are not required, or permitted, to restate the historical dollar amounts for the effects of inflation.	
 	 	 	
 	 	The financial statements of the domestic subsidiaries, which maintain their accounting records in Chilean pesos, have been restated to reflect the effects of variations in the purchasing power of Chilean pesos during the period. For this purpose, in conformity with Chilean regulations, non-monetary assets and liabilities and equity accounts have been restated in terms of year-end constant pesos based on the change in the consumer price index during the period (1.3% and 2.2% in 2002 and 2001, respectively). The resulting net charge or credit to income arises as a result of the gain or loss in purchasing power from the holding of monetary assets and liabilities exposed to the effects of inflation.	
 	 	 	
d)	 	Foreign currency	
 	 		
 		i)   Foreign currency transactions	
 	 		
 	 	Assets and liabilities denominated in Chilean pesos and other currencies at September 30, 2002 and 2001 have been translated to US dollars at the exchange rates in force at those dates of Ch.$748.73 and Ch.$695.02 per US dollars, respectively.	
 	 		
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 		ii)   Translation of non-U.S. dollar financial statements	
 	 		
 	 	In accordance with Chilean GAAP, the financial statements of foreign and domestic subsidiaries that do not maintain their accounting records in U.S. dollars are translated from the respective local currencies to U.S. dollars in accordance with Technical Bulletin No. 64 as follows:	
 	 		
 	 	With respect to subsidiaries and affiliates located in Chile which maintain their accounting records in price-level adjusted Chilean pesos:	
 	-	 	Balance sheet accounts are translated to U.S. dollars at the closing date for the period exchange rate without eliminating the effects of price-level restatements;	
 	 	 	 	
 	-	 	Income statement accounts are translated to U.S. dollars at the average rate of exchange each month after elimination of price level adjustments to the income statement accounts; the monetary correction account on the income statement which reflects the impact of price level adjustments to the non-monetary assets and liabilities and shareholders’ equity in the balance sheet is translated to U.S. dollars at the average rate of exchange each month.	
 	 	 	 	
 	-	 	Translation gains and losses, as well as the price level adjustments to the balance sheet mentioned above, are included as an adjustment in shareholders’ equity, in conformity with the Circular No. 368 of the Chilean Superintendency of Securities and Insurance.	
 	 	 	 	
 	 	The 2002 and 2001 financial statements of those foreign subsidiaries that keep their accounting records in currencies other than U.S. dollar have been translated at historical exchange rates following the methodology indicated in Chilean Technical Bulletin No. 64. Beginning on January 1, 1998, Technical Bulletin No. 64 of the Chilean Association of Accountants replaced Technical Bulletin No. 51. Differences between these two bulletins are not significant, nor do they differ significantly from FASB 52. 	
 	 	 	
 	 	Prior year financial statements presented for comparative purposes are not restated to a constant purchasing power level of the most recent year-end. In accordance with Chilean GAAP, amounts expressed in U.S. dollars, including amounts included in the consolidated financial statements as determined in prior years from the translation of financial statements of those Chilean subsidiaries which maintain their accounting records in Chilean pesos, are not adjusted for price level changes.	
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Exchange differences for the periods ended September 30, 2002 and 2001 generated net income of Th.US$ 733 and Th.US$ 225, respectively, which were charged to consolidated results of operations in each respective period.
The exchange rates used for the conversion of monetary assets and liabilities, expressed in foreign currency at each period–end, were as follows:
 
 	  	 	2002
US$	 	2001
US$	 	
 	 	 		 		 	
 	Brazilian real	 	3.85	 	 	2.67	 	
 	New Peruvian sol	 	3.64	 	 	3.48	 	
 	Colombian peso	 	2,808.04	 	 	2,336.45	 	
 	Argentine peso	 	3.74	 	 	1.00	 	
 	Japanese yen	 	122.60	 	 	119.55	 	
 	Euro	 	1.01	 	 	1.10	 	
 	Mexican peso	 	10.23	 	 	9.51	 	
 	Indonesian rupee	 	9,015.10	 	 	—	 	
 	Australian dollar	 	1.84	 	 	—	 	
 	Sterling Pounds	 	0.6369	 	 	0.6787	 	
 
The Company uses the “observed exchange rate”, which is the rate determined daily by the Chilean Central Bank based on the average exchange rates at which bankers conduct authorized transactions on such date.
e)  Basis of consolidation
The Consolidated Financial Statements include the accounts of Sociedad Química y Minera de Chile S.A. (the “Parent Company”) and subsidiaries (companies in which the Parent Company holds a direct or indirect ownership of more than 50%). The Parent Company and its subsidiaries are referred to as the “Company”.
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In accordance with regulations set forth by the Chilean Superintendency of Securities and Insurance in its Circular No. 368, Technical Bulletins Nos. 42 and 64 of the Chilean Association of Accountants, the consolidated financial statements include the assets, liabilities, income statements, and cash flows for the following affiliates:
 	 	 	Direct or indirect ownership	 	
 	 	 		 	
 	 	 	2002
%	 	2001
%	 	
 	 						
 	Foreign subsidiaries:	 		 		 	
 	 	 	 	 	 	 	 	
 	Nitrate Corp. of Chile Limited 	 	100.00	 	 	100.00	 	
 	Soquimich SRL - Argentina	 	100.00	 	 	100.00	 	
 	Nitratos Naturais do Chile Ltda.	 	100.00	 	 	100.00	 	
 	SQM Europe NV	 	100.00	 	 	100.00	 	
 	SQM North America Corp. 	 	100.00	 	 	100.00	 	
 	North American Trading Company	 	100.00	 	 	100.00	 	
 	SQM Perú S.A.	 	100.00	 	 	100.00	 	
 	SQM Corporation NV	 	100.00	 	 	100.00	 	
 	SQI Corporation NV	 	100.00	 	 	100.00	 	
 	Soquimich European Holding	 	100.00	 	 	100.00	 	
 	PTM - SQM Ibérica S.A.	 	100.00	 	 	100.00	 	
 	SQMC Holding Corporation LLP	 	100.00	 	 	100.00	 	
 	SQM Ecuador S.A.	 	100.00	 	 	100.00	 	
 	Cape Fear Bulk LLC	 	51.00	 	 	51.00	 	
 	SQM Colombia Ltda.	 	100.00	 	 	100.00	 	
 	SQM Investment Corporation NV	 	100.00	 	 	100.00	 	
 	PSH Limited	 	100.00	 	 	100.00	 	
 	SQM Brasil Ltda.	 	100.00	 	 	99.99	 	
 	Royal Seed Trading Corporation AVV	 	100.00	 	 	100.00	 	
 	SQM Japan K.K.	 	100.00	 	 	100.00	 	
 	SQM Oceanía PTY Limited	 	100.00	 	 	100.00	 	
 	SQM France S.A.	 	100.00	 	 	100.00	 	
 	Fertilizantes Naturales S.A.	 	50.00	 	 	50.00	 	
 	Rs Agro-Chemical Trading AVV	 	100.00	 	 	100.00	 	
 	SQM Comercial de México S.A. de C.V.	 	100.00	 	 	100.00	 	
 	SQM Indonesia	 	80.00	 	 	80.00	 	
 	SQM Virginia LLC	 	100.00	 	 	100.00	 	
 	SQM Venezuela S.A.	 	100.00	 	 	50.00	 	
 	Agricolima S.A. de C.V.	 	100.00	 	 	—	 	
 	SQM Italia SRL	 	95.00	 	 	—	 	
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 	 	 	Direct or indirect ownership	 	
 	  	 	2002
%	 	2001
%	 	
 	 	 		 		 	
 	Domestic subsidiaries:	 	 	 	 	 	 	

 	Servicios Integrales de Tránsitos y
Transferencias S.A.	 	100.00	 	 	100.00	 	
 	Soquimich Comercial S.A.	 	60.64	 	 	60.64	 	
 	Sociedad Minera de Chile S.A.	 	100.00	 	 	100.00	 	
 	Energía y Servicios S.A.	 	100.00	 	 	100.00	 	
 	Almacenes y Depósitos Ltda.	 	100.00	 	 	100.00	 	
 	Isapre Norte Grande Ltda. 	 	100.00	 	 	100.00	 	
 	SQM Químicos S.A.	 	99.99	 	 	99.99	 	
 	Ajay SQM Chile S.A.	 	51.00	 	 	51.00	 	
 	SQM Nitratos S.A.	 	100.00	 	 	100.00	 	
 	Proinsa Ltda.	 	60.58	 	 	60.58	 	
 	SQM Potasio S.A.	 	100.00	 	 	100.00	 	
 	SQMC International Limitada 	 	60.64	 	 	60.64	 	
 	SQM Salar S.A.	 	100.00	 	 	100.00	 	
 	Minera Mapocho S.A.	 	—	 	 	100.00	 	
 	Inversiones Augusta S.A.	 	—	 	 	100.00	 	
 	Cía Industrial y Minera S.A.	 	—	 	 	100.00	 	
 	SCM SQM Boratos	 	—	 	 	100.00	 	
All significant intercompany balances, transactions and unrealized gains and losses arising from transactions between these companies have been eliminated in consolidation and the participation of minority shareholders has been recognized as minority interest.
At September 30, 2002 and 2001, the subsidiary Fertilizantes Naturales S.A. was included in the consolidation given that the Company maintains controlling interest.
At September 30, 2002 and 2001, the subsidiaries SQM Lithium Specialties LLP and SCM Antucoya were in development stage and therefore were not included in the consolidation.
At September 30, 2001, the subsidiary Potassium S.A. was in development stage and therefore was not included in the consolidation.
 
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f)  Cash and cash equivalents
Time deposits are presented at cost plus accrued interest.
In conformity with Technical Bulletin No. 50 of the Chilean Association of Accountants, the Company has classified cash, time deposits and short-term investments, which mature within three months from the date of purchase as cash and cash equivalents
g)  Marketable securities
Marketable securities are valued at the lower of cost plus accrued interest or market value.
h)  Bad debt estimate
The Company records a provision for bad debt based on estimate of probable losses.
i)  Inventories and materials
Inventories of finished products and in-process products have been valued at average production cost. Raw materials and products acquired from third parties are stated at average cost. Materials-in-transit are valued at cost. These values do not exceed net realizable values.
Inventories of spare parts and supplies are classified as Other Current Assets except for those items, which the Company estimates to have a turnover period of one year or more, which are classified as non-current Other Assets.
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j)  Income and deferred taxes
The provision for income tax is determined and recorded in accordance with current Chilean tax regulations on the basis of income accrued during each period.
In Chile, the general corporate rate is 16% and non-deductible expenses are taxed at 35%. Taxable losses incurred by a company in any year must first be carried back to recover taxes previously paid, if any, on a first-in, first-out basis. Any remaining tax losses can be carried forward without limitation.
Each company is required to file a separate tax declaration.
Effective January 1, 2000, in accordance with Chilean Technical Bulletins Nos. 60, 69 and 71 and Circular No. 1466 of the Superintendency of Securities and Insurance, deferred taxes related to all temporary differences are recorded. The effect of the temporary differences at September 30, 1999 were recorded in complementary asset and liability accounts, and will be recognized in the statement of operations in the period in which they reverse.
k)  Property, plant and equipment
Except for the increment arising from a revaluation in 1988, property, plant and equipment are stated at cost considering an average residual value of 5%. Depreciation expense has been calculated using the straight-line method based upon the estimated useful lives of the assets and is either capitalized as a production cost or charged directly to expense. Depreciation expense for the nine-month period ended September 30, 2002 and 2001 includes Th.US$ 1,319 and Th.US$ 1,319 respectively, arising from the depreciation of the 1988 technical appraisal adjustment of property, plant and equipment.
Fixed assets acquired through financing lease agreements are accounted for at the present value of the installments plus the purchase option based on the interest rate included in each contract. The Company does not legally own these assets and therefore cannot freely dispose of them.
 
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In conformity with Bulletin No. 31 of the Chilean Association of Accountants, the Company capitalizes interest cost associated with the financing of new assets during the construction period of such assets. Capitalized interest amounted to Th.US$ 1,678 and Th.US$ 1,966 during September 30, 2002 and 2001, respectively.
Maintenance costs of plant and equipment are charged to expenses as incurred.
The Company obtains property rights for mining concessions from the Chilean courts having jurisdiction by filing the corresponding applications for specifically identified properties. Other than minor filing fees, the property rights are usually obtained without initial cost, and once obtained, are retained perpetually by the Company as long as the annual fees are paid. Such fees, which are paid annually in September, are recorded as prepaid assets to be amortized over the succeeding twelve months. Values attributable to these original mining concessions received are being amortized on a straight-line basis over 50 years. Mining concessions acquired from others are recorded at acquisition cost and are being amortized based on the units of production method.
l)  Investments in related companies
Permanent investments in domestic and foreign related companies are accounted for in accordance with the equity method, in conformity with Technical Bulletins Nos. 42 and 64 of the Chilean Association of Accountants. The translation adjustment to US dollars of investments in domestic subsidiaries which maintain their accounting records and are controlled in Chilean pesos is recognized in Other Reserves. Direct and indirect investments in foreign subsidiaries or affiliates are controlled in US dollars.
m)  Goodwill and negative goodwill
Goodwill and negative goodwill resulting from investments in related companies are maintained in the same currency in which the investment was made and are amortized with a credit or charge to income considering the related period of investment return, generally 20 and 10 years for goodwill and negative goodwill, respectively.
 
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n)  Intangible assets
Intangible assets are stated at cost plus all the expenses related to acquisition and are amortized over a maximum period of 40 years, in accordance with Technical Bulletin No. 55 of the Chilean Association of Accountants. 
o)  Mining development cost
Mining development costs are recorded in other long-term assets and are amortized as the ore reserves are extracted.
p)  Accrued employee severance
The Company accrues severance obligations based on the present value of the accrued benefits for the actual years of service worked using an annual interest rate of 9% and an average capitalization period of 24 years.
q)  Vacations
The cost of vacations earned by employees is recorded on an accrual basis.
r)  Dividends
In accordance with past practice, dividends are generally declared in U.S. dollars but are paid in Chilean pesos.
 
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s)  Derivatives 
The Company maintains derivatives contracts, which are recorded in conformity with Chilean Technical Bulletin No. 57 (losses are recognized on the accrual basis and gains are recognized when realized). 
t)  Reclassifications
Certain amounts from the prior year financial statements have been reclassified in the current year to conform with the current year presentation.
u)  Revenue recognition
Revenues are recognized upon the physical shipment of products.
v)  Computer software
In accordance with Circular No. 981 dated December 28, 1990 of the Superintendency of Securities and Insurance, computer systems acquired by the Company are capitalized at cost plus all the related additional costs.
w)  Research and development expenses
Research and development expenses are charged to expenses in the period in which they are incurred, except for fixed assets acquired for their use in research and development activities and are determined to provide additional benefits, which are recorded under the related item within property, plant and equipment. 
x)  Statement of cash flows
In conformity with Technical Bulletin No. 50 of the Chilean Association of Accountants, the Company considers the balances of cash, time deposits and other short-term investments whose maturity is less than 90 days, as cash and cash equivalents.
 
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Note 3 — Changes in Accounting Principles
There were no accounting changes during the period.

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Note 4 — Long-term and Short-term Accounts Receivable
a) Detail as of September 30, 2002 and 2001: 
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Up to 90 days	 	Between 90 days
and 1 year	 	2002	 	Total
Short-term (net) 	 	Long-term 	 	
											 	
  	 	09-30-2002
Th.US$	 	09-30-2001
Th.US$	 	09-30-2002
Th.US$	 	09-30-2001
Th.US$	 	Subtotal
Th.US$	 	09-30-2002
Th.US$	 	09-30-2001
Th.US$	 	09-30-2002
Th.US$	 	09-30-2001
Th.US$	 	

Trade accounts receivable	 	87,809	 	90,168	 	7,396	 	9,500	 	95,205	 	90,984	 	99,668	 	—	 	231	 	
Allowance for bad debt	 	 	 	 	 	 	 	 	 	(4,221	)	 	 	 	 	 	 	 	 	
Notes receivable	 	18,346	 	19,452	 	5,171	 	4,416	 	23,517	 	20,764	 	23,868	 	—	 	—	 	
Allowance for bad debt	 	 	 	 	 	 	 	 	 	(2,753	)	 	 	 	 	 	 	 	 	
																				
Subtotal	 	 	 	 	 	 	 	 	 	 	 	111,748	 	123,536 	 	—	 	231	 	
																				
Other accounts receivable	 	9,228	 	10,976	 	1,320	 	3,247	 	10,548	 	9,710	 	14,223	 	11,969	 	12,330	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Allowance for bad debt	 	 	 	 	 	 	 	 	 	(838	)	 	 	 	 	 	 	 	 	
																				
Subtotal	 	 	 	 	 	 	 	 	 	 	 	9,710	 	14,223	 	11,969	 	12,330	 	
																				
Total long-term accounts receivable	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	11,969	 	12,561	 	
																				
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Note 4 — Long-term and Short-term Accounts Receivable (continued)
Consolidated Short and Long-term Receivables — by Geographic Location
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Chile	 	Europe, Africa and
the Middle East	 	Asia and
Oceania 	 	USA, Mexico
and Canada 	 	Latin America and the Caribbean 	 	Total 	 	
														
  	 	2002
Th.US$	 	2001
Th.US$	 	2002
Th.US$	 	2001
Th.US$	 	2002
Th.US$	 	2001
Th.US$	 	2002
Th.US$	 	2001
Th.US$	 	2002
Th.US$	 	2001
Th.US$	 	2002
Th.US$	 	2001
Th.US$	 	
 	 		 		 				 		 		 		 		 		 		 		 		 	
Net short-term trade accounts receivable   	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
– Balance	 	29,768	 	33,949	 	21,379	 	28,533	 	4,009	 	2,534	 	27,089	 	19,232	 	8,739	 	15,420	 	90,984	 	99,668	 	
– % of total	 	32.72	%	34.06	%	23.50	%	28.63	%	4.41	%	2.54	%	29.77	%	19.29	%	9.60	%	15.48	%	100.00	%	100.00	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net short-term notes receivable   	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
– Balance	 	17,465	 	20,596	 	878	 	315	 	30	 	380	 	386	 	762	 	2,005	 	1,815	 	20,764	 	23,868	 	
– % of total	 	84.11	%	86.28	%	4.23	%	1.32	%	0.14	%	1.59	%	1.86	%	3.21	%	9.66	%	7.60	%	100.00	%	100.00	%	

Net short-term other accounts receivable     	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
– Balance	 	5,905	 	10,448	 	1,089	 	773	 	5	 	4	 	2,398	 	2,720	 	313	 	278	 	9,710	 	14,223	 	
– % of total	 	60.81	%	73.46	%	11.22	%	5.44	%	0.05	%	0.03	%	24.70	%	19.12	%	3.22	%	1.95	%	100.00	%	100.00	%	
																										
Subtotal short-term accounts receivable, net    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
– Balance	 	53,138	 	64,993	 	23,346	 	29,621	 	4,044	 	2,918	 	29,873	 	22,714	 	11,057	 	17,513	 	121,458	 	137,759	 	
– % of total	 	43.75	%	47.18	%	19.22	%	21.50	%	3.33	%	2.12	%	24.60	%	16.49	%	9.10	%	12.71	%	100.00	%	100.00	%	

Net long-term accounts receivable     	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
– Balance	 	10,820	 	11,255	 	58	 	3	 	—	 	—	 	51	 	231	 	1,040	 	1,072	 	11,969	 	12,561	 	
– % of total	 	90.40	%	89.60	%	0.48	%	0.02	%	—	 	—	 	0.43	%	1.84	%	8.69	%	8.54	%	100.00	%	100.00	%	
																										
Total short and long-term accounts receivable, net    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
– Balance	 	63,958	 	76,248	 	23,404	 	29,624	 	4,044	 	2,918	 	29,924	 	22,945	 	12,097	 	18,585	 	133,427	 	150,320	 	
– % of total	 	47.93	%	50.72	%	17.54	%	19.71	%	3.03	%	1.94	%	22.43	%	15.27	%	9.07	%	12.36	%	100.00	%	100.00	%	
																										
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Note 5 — Balances and Transactions with Related Companies
At September 30, 2002 and 2001, balances and transactions with related companies related to balances in current accounts as set by Article No. 602 of the Chilean Commerce Code. There is no maturity date or payment schedule.
Accounts receivable from and payable to related companies are stated in US dollars and accrue no interest.
Transactions are made under terms and conditions which are similar to those offered to unrelated third parties.
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a)	Detail as of September 30, 2002 and 2001	

 	 	Short-term	 	Long-term 	 	
Accounts receivable	 	2002
Th.US$	 	2001
Th.US$	 	2002
Th.US$	 	2001
Th.US$	 	
	 		 		 		 		 	
Ajay Europe S.A.R.L.	 	4,591	 	3,947	 	–	 	–	 	
SQM Italia SRL	 	–	 	 5,965	 	–	 	–	 	
Nutrisi Holding N.V. 	 	–	 	14	 	–	 	–	 	
Generale de Nutrition Vegetale S.A.	 	165	 	453	 	–	 	–	 	
Fertilizantes Olmeca S.A.	 	3,988	 	794	 	–	 	–	 	
Mineag SQM Africa Limited	 	3,987	 	8,659	 	–	 	–	 	
Abu Dhabi Fertilizer Ind. WLL	 	5,573	 	4,310	 	–	 	–	 	
SQM México S.A. de C.V.	 	–	 	28,630	 	–	 	–	 	
Doktor Tarsa –SQM Turkey	 	135	 	268	 	–	 	–	 	
Comercial Caimán Internacional S.A. 	 	3,107	 	1,151	 	–	 	–	 	
SQM Venezuela S.A.	 	–	 	1,873	 	–	 	–	 	
SQM Lithium Specialties Limited	 	666	 	135	 	 	 	 	 	
Empresas Melón S.A. 	 	–	 	–	 	509	 	825	 	
Sales de Magnesio S.A. 	 	31	 	58	 	–	 	–	 	
Ajay North America LLC	 	243	 	258	 	–	 	–	 	
Norsh Hydro ASA	 	192	 	–	 	–	 	–	 	
Hydro Agri Int.-France	 	1,816	 	–	 	–	 	–	 	
Hydro Asia Trade	 	1,239	 	–	 	–	 	–	 	
Hydro Agri France S.A.	 	379	 	–	 	–	 	–	 	
Hydro Poland SP	 	132	 	–	 	–	 	–	 	
Hydro Agri Benelux B.V	 	83	 	–	 	–	 	–	 	
Hydro Agri Hellas S.A.	 	77	 	–	 	–	 	–	 	
Hydro Plant Nutr. Oslo	 	13	 	–	 	–	 	–	 	
Hydro Agri Australia Ltd.	 	602	 	–	 	–	 	–	 	
Hydro Agri Benelux 	 	17	 	–	 	–	 	–	 	
Hydro Agri UK Ltd.	 	137	 	–	 	–	 	–	 	
Hydro Agri GMBH & CO KG	 	59	 	–	 	–	 	–	 	
NU3 B.V.	 	545	 	–	 	–	 	–	 	
Hydro Agri AB	 	39	 	–	 	–	 	–	 	
Hydro Agrícola Internacional	 	451	 	 	 	 	 	 	 	
Hydro Agri Colombia	 	28	 	–	 	–	 	–	 	
PCS Yumbes	 	4,366	 	–	 	–	 	–	 	
Hydro Agri Venezuela	 	772	 	 	 	 	 	 	 	
Hydro Agri North America	 	71	 	–	 	–	 	–	 	
NU3 N.V.	 	3,593	 	6,837	 	 	 	 	 	
Agricolima	 	–	 	4	 	–	 	–	 	
Hydro Agri Argentina	 	653	 	–	 	 	 	 	 	
  	 		 		  		  		 	
Total	 	37,750 	 	63,356	 	509	 	825	 	
 	 		 		 		 		 	
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Note 5 — Balances and Transactions with Related Companies (continued)
 	 	Short-term 	 	Long-term	 	
Accounts payable  	 	2002 
Th.US$	  	2001
Th.US$	 	2002 
Th.US$	  	2001
Th.US$	 	
	 		 		 		 		 	
Ajay Europe S.A.R.L.	 	820 	 	411	 	–	 	–	 	
SQM Italia SRL	 	–	 	11	 	–	 	–	 	
Nutrisi Holding N.V. 	 	–	 	2	 	–	 	–	 	
Mineag SQM Africa Limited	 	347	 	–	 	–	 	–	 	
Abu Dhabi Fertilizer Ind. WLL	 	90	 	54	 	–	 	–	 	
SQM México S.A. de C.V.	 	–	 	7,500	 	–	 	–	 	
SCM Antucoya	 	100	 	100	 	–	 	–	 	
Hydro Agri Porsgrunn	 	104	 	–	 	–	 	–	 	
Rotem Amfert Negev Limited	 	168	 	–	 	–	 	–	 	
Hydro Agri Int-France	 	496	 	–	 	–	 	–	 	
Hydro Agri Colombia	 	84	 	–	 	–	 	–	 	
NU3 B.V.	 	433	 	–	 	–	 	–	 	
Hydro Agri North America	 	182	 	–	 	–	 	–	 	
Hydro Agri México de S.A de C.V.	 	109	 	–	 	–	 	–	 	
Fertilizantes Olmeca 	 	16	 	–	 	–	 	–	 	
Hydro Fertilizante Ltda.	 	847	 	–	 	–	 	–	 	
Hydro Agrícola internacional	 	103	 	–	 	–	 	–	 	
NU3 N.V	 	1,682	 	1,001	 	–	 	–	 	
Adm. y Servicios Santiago S.A de C.V	 	99	 	–	 	–	 	–	 	
  	 		 		 		 		 	
Total	 	5,680	 	9,079	 	–	 	–	 	
 	 		 		 		 		 	
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Note 5 — Balances and Transactions with Related Companies (continued)
b) 	During 2002 and 2001, principal transactions with related companies were as follows:	

 	 	 	 	Amount of
transaction	 	Impact on incone
(charge) credit	 	
Company	 	Type of transaction	 	2002
Th.US$ 	 	2001
Th.US$ 	 	2002
Th.US$ 	 	2001
Th.US$ 	 	
	 		 		 		 		 			
SQM Mexico S.A de C.V.	 	Sales of products	 	–	 	10,870	 	– 	 	528	 	
 	 	 	 	 	 	 	 	 	 	 	 	
SQM Italia SRL	 	Sales of products	 	–	 	4,061	 	 –	 	1,290	 	
 	 	 	 	 	 	 	 	 	 	 	 	
NU3 NV (Belgica)	 	Sales of product	 	1,322	 	9,835	 	360	 	144	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Mineag SQM Africa Ltd.	 	Sales of products	 	10,289	 	7,468	 	2.638	 	55	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Nutrisi Holding N.V.	 	Sales of products	 	1,538	 	–	 	471	 	–	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Generale de Nutrition Vegetale	 	Sales of products	 	–	 	735	 	– 	 	66	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Ajay Europe SARL	 	Sales of products	 	5,369	 	6,703	 	1,234	 	1,419	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Sales de Magnesio Ltda.	 	Sales of products	 	76	 	27	 	 35	 	21	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Doktor Tarsa	 	Sales of products	 	1,090	 	– 	 	345	 	–	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Hidro Agri GMBH & COkg	 	Sales of product	 	322	 	–	 	85	 	–	 	
 	 	 	 	 	 	 	 	 	 	 	 	
PCS Yumbes SCM	 	Sales of products	 	11,252	 	6,134 	 	6,976	 	3,645	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Peralta y Cia ltda	 	Lease and consulting agreement	 	–	 	50	 	–	 	50	 	
	 	 	 	 	 	 	 	 	 	 	 	
ABU Dhabi Fertilizer Ind. WWL	 	Sales of products	 	1,878	 	1,585	 	502	 	(1	)	
 	 	 	 	 	 	 	 	 	 	 	 	
Nutrichem Benelux NV	 	Sales of products	 	–	 	29	 	–	 	1	 	
 	 	 	 	 	 	 	 	 	 	 	 	
SQM Venezuela	 	Sales of products	 	–	 	1,523	 	– 	 	83	 	
 	 	Training	 	–	 	1	 	– 	 	3	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Hydro Agri (U.K) Ltd.	 	Sales of product	 	697	 	–	 	169	 	–	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Hydro Asia trade Pte Ltd.	 	Sales of product	 	4,113	 	–	 	764	 	–	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Hydro Agri France S.A. 	 	Sales of product	 	3,190	 	–	 	602	 	–	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Hydro Agri
Internacional 	 	Sales of product	 	1,638	 	–	 	337	 	–	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Hydro Agri Hellas S.A.	 	Sales of product	 	502	 	–	 	142	 	–	 	
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  	 	  	  	Amount of
 transaction 	  	 Impact on income  
(charge) credit   	
Company 	 	Type of transaction  	  	2002
Th.US$	 	2001
Th.US$	  	2002
Th.US$	  	2001
Th.US$	
	 		 		 		 		  		
Hydro Agri Benelux B.V.	 	Sales of product	 	3,854	 	–	 	394	 	–	
 	 	 	 	 	 	 	 	 	 	 	
Hydro Agri AB Sweden	 	Sales of product	 	99	 	–	 	25	 	–	
 	 	 	 	 	 	 	 	 	 	 	
Hydro Agri Czech Republic SRO	 	Sales of product	 	16	 	–	 	5	 	–	
 	 	 	 	 	 	 	 	 	 	 	
Hydro Agri Rotterdam B.V.	 	Sales of product	 	534	 	–	 	175	 	–	
 	 	 	 	 	 	 	 	 	 	 	
Hydro Planta Nutrition, Cis Reg.	 	Sales of product	 	581	 	–	 	194	 	–	

Hydro Agri Nutri Oslo	 	Sales of product	 	126	 	–	 	39	 	–	
 	 	 	 	 	 	 	 	 	 	 	
Hydro Agri Australia Ltd.	 	Sales of product	 	987	 	–	 	191	 	–	
 	 	 	 	 	 	 	 	 	 	 	
Hydro Agri España S.A.	 	Sales of product	 	68	 	–	 	18	 	–	
 	 	 	 	 	 	 	 	 	 	 	
Hydro Agri Norge	 	Sales of product	 	20	 	–	 	5	 	–	
 	 	 	 	 	 	 	 	 	 	 	
Adubos Trevo S.A	 	Sales of product	 	380	 	–	 	173	 	–	
 	 	 	 	 	 	 	 	 	 	 	
Hydro Fertilizantes Ltda 	 	Sales of product	 	352	 	–	 	111	 	–	
 	 	 	 	 	 	 	 	 	 	 	
NU3 B.V	 	Sales of product	 	2,631	 	–	 	847	 	–	
 	 	 	 	 	 	 	 	 	 	 	
Hydro Agri International	 	Sales of product	 	2,039	 	–	 	236	 	–	
 	 	 	 	 	 	 	 	 	 	 	
Hydro Agri international France	 	Sales of product	 	3,364	 	–	 	1,103	 	–	
 	 	 	 	 	 	 	 	 	 	 	
SQM Lithium Specialties	 	Sales of product	 	–	 	93	 	–	 	36	
 	 	 	 	 	 	 	 	 	 	 	
Hydro Agri Argentina	 	Sales of product	 	1.215	 	–	 	212	 	–	
 	 	 	 	 	 	 	 	 	 	 	
Hydro Agri Colombia Ltda	 	Sales of product	 	28	 	–	 	5	 	–	
 	 	 	 	 	 	 	 	 	 	 	
Hydro Agri Venezuela	 	Sales of product	 	826	 	–	 	363	 	–	
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Note 6 — Inventories
As of September 30, 2002 and 2001, inventories consisted of:
  	2002
Th.US$	  	2001
Th.US$	 	

Finished products	126,202	 	116,744	 	
Products-in-process 	90,961	 	73,826	 	
Supplies	10,582	 	10,905	 	
 		 		 	
Total	227,745	 	201,475	 	
 		 		 	
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Note 7 — Property, Plant and Equipment
As of September 30, 2002 and 2001, property, plant and equipment consisted of:
  	  	2002
Th.US$	  	2001
Th.US$	 	
 	 		 		 	
Land	 	 	 	 	 	
 	 	 	 	 	 	
–  Land	 	13,453	 	13,453	 	
–  Mining Concessions	 	16,708	 	16,708	 	
–  Other Lands	 	12,777	 	11,989	 	
 	 		 		 	
 	 	42,938	 	42,150	 	

Buildings and infrastructure	 	 	 	 	 	
 	 	 	 	 	 	
–  Buildings	 	156,268	 	150,835	 	
–  Installations	 	261,511	 	260,767	 	
–  Construction-in-progress	 	28,005	 	28,816	 	
–  Other	 	19,563	 	20,213	 	
 	 		 		 	
 	 	465,347	 	460,631	 	
 	 		 		 	
Machinery and equipment	 	 	 	 	 	
 	 	 	 	 	 	
–  Machinery	 	388,084	 	371,949	 	
–  Equipment	 	100,174	 	96,609	 	
–  Machinery-in-progress	 	13,871	 	9,573	 	
–  Other	 	10,487	 	10,398	 	
 	 		 		 	
 	 	512,616	 	488,529	 	
 	 		 		 	
Other fixed assets	 	 	 	 	 	
 	 	 	 	 	 	
–  Tools	 	7,968	 	8,077	 	
–  Furniture and office equipment	 	13,413	 	12,693	 	
–  Project-in-progress 	 	19,756	 	20,050	 	
–  Other	 	5,177	 	5,611	 	
 	 		 		 	
 	 	46,314	 	46,431	 	
 	 		 		 	
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Note 7 — Property, Plant and Equipment (Continued)
  	  	2002
Th.US$	  	  	2001
Th.US$	 	
 	 		 	 		 	
Appraisal adjustment of	 	 	 	 	 	 	
 	 	 	 	 	 	 	
–  Land	 	8,651	 	 	8,651	 	
–  Buildings and infrastructure	 	40,627	 	 	40,627	 	
–  Machinery and equipment	 	12,127	 	 	12,127	 	
–  Other assets	 	53	 	 	53	 	
 	 		 	 		 	
 	 	61,458	 	 	61,458	 	
 	 		 	 		 	
Total property, plant and equipment	 	1,128,673	 	 	1,099,199	 	

Less: Accumulated depreciation	 	 	 	 	 	 	

–  Land	 	(9,135	)	 	(8,857	)	
–  Buildings and infrastructure	 	(153,942	)	 	(131,215	)	
–  Machinery and equipment	 	(234,915	)	 	(201,779	)	
–  Other fixed assets	 	(15,177	)	 	(13,980	)	
–  Technical appraisal	 	(30,906	)	 	(29,148	)	
 	 		 	 		 	
Total accumulated depreciation	 	(444,075	)	 	(384,979	)	
 	 		 	 		 	
Net property, plant and equipment	 	684,598	 	 	714,220	 	
 	 		 	 		 	
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Note 8 — Investments in and Receivables from Related Companies 
a)   Transactions executed in 2002 
On March 21, 2002, SQM North America Corporation acquired 50% of the affiliate SQM Venezuela S.A., which added to the ownership interest maintained by SQM Nitratos S.A. in this company, results in indirect ownership of 100% by SQM S.A.

On April 5, 2002, the subsidiary Royal Seed Trading Corportaion A.V.V. made a contribution of Th.US$ 120.5 to form a joint venture with Rui Xin Packaging Materials, Sanhe Co. Ltd. 

On May 1, 2002, the subsidiary Soquimich European Holdings B.V. acquired 50% ownership of the affiliate Nutrichem N.V., which subsequently changed its name to Nutrisi Holding N.V. 

On May 7, 2002, SQM Nitratos S.A. concurred to a capital increase in SQM Brasil Ltda., which resulted in ownership of 88.54%, SQM Químicos S.A. did not concur to this increase and reduced its ownership to 11.46%. 

During May 2002, P.S.H. Limited made a capital increase of Th.US$ 250 in its affiliate Ajay Europe S.A.R.L. 

During May 2002, Soquimich European Holding increased its ownership in its affiliate FNC Italy S.R.L. to 95%, thereby becoming an indirect subsidiary of SQM S.A. Subsequently, FNC Italy S.R.L. changed its name to SQM Italia S.R.L. 

On May 28, 2002, the subsidiary Inversiones y Asesorías SQM Limitada changed its name to Almacenes y Depósitos Limitada. 

On June 12, 2002, Soquimich European Holding acquired 50% of Impronta S.R.L. 

On August 31, 2002, SQM S.A acquired shares, which were owned by SQM Nitratos S.A. over Cía. Industrial y Minera S.A. (Cimin S.A) in MUS$. 5,016. This situation produced that all shares of Cimin S.A. are concentrated on an only one shareholder, SQM S.A., and consequently, it was impacted on the immediate dissolution of Cimin S.A, owning SQM S.A. the total equity, assets and liabilities of this entity. 

On September 27, 2002, SQM Nitratos S.A made an contribution of capital of MUS$ 12,040 over SQM North America Corporation, acquiring the ownership of 39.946782% over this entity. No concurrence for the increase of equity made the participation of the old owners 
29

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decreased. SQM S.A. reduced its ownership from 81.75% to 49.093506% and Soquimich European Holding reduced its ownership from 18.25% to 10.959712%.
On September 30, 2002, SQM SA acquired shares which were owned by SQM Nitratos S.A. over the subsidiary SCM SQM Boratos by MU$ 887. This situation produced that all shares of SCM SQM Boratos are concentrated on an only one shareholder, SQM S.A., and consequently, it was impacted on the immediate dissolution of SCM SQM Boratos, acquiring SQM S.A. the total shareholders’ equity, assets and liabilities of this entity. 
Note 8 — Investments in and Receivables from Related Companies (Continued) 
b)   Transactions excecuted in 2001 
On January 22, 2001, Sales de Magnesio Ltda. was formed through equal contributions by SQM Salar S.A. and the partner Sociedad Chilena del Litio S.A. (third party). 
At the Extraordinary Shareholders’ Meeting held on February 14, 2001 of Productos Técnicos del Mediterráneo S.A., the shareholders agreed to change the Company’s name to PTM – SQM Iberica S.A 
At the Extraordinary Shareholders’ Meeting of Industrias Químicas de Yodo S.A. held on September 26, 2001, the Shareholders’ agreed to changed this Company’s name to Ajay – SQM Chile S.A 
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Note 8 — Investments in and Receivables from Related Companies (continued) 
b)   Detail of investments in Related Companies
	
 	 	 	 	 	 	 	 	 	Ownership
interest 	 	Equity of
companies 	 	Net income (loss)
for the period 	 	Accrued
result 	 	Equity value	 	Book value
of the investment	
Tax
Registration
Number 	 	Company	 	Origin
country	Controlling
currency 	 	Number of
shares 		2002		2001		2002		2001		2002		2001		2002		2001		2002		2001	 	2002		2001	
 	 	 	 	 	 	 	 	 	%	 	%	 	Th.US$	 	Th.US$	 	Th.US$	 	Th.US$	 	Th.US$	 	Th.US$	 	Th.US$	 	Th.US$	 	Th.US$	 	Th.US$	
	
93390000-2	 	Empresas Melón S.A.	 	Chile	—	 	653,748,837	 	14.05	 	14.05	 	247,340	 	244,988	 	16,902	 	4,149	 	2,375	 	583	 	34,751	 	34,421	 	34,751	 	34,421	
0-E	 	SQM Lithium Specialties LLP*	 	USA	US$	 	—	 	100.00	 	100.00	 	25,558	 	10,884	 	—	 	—	 	—	 	—	 	25,558	 	10,884	 	25,558	 	10,884	
0-E	 	Ajay North America	 	USA	US$	 	—	 	49.00	 	49.00	 	14,038	 	14,414	 	308	 	563	 	151	 	276	 	6,879	 	7,063	 	6,879	 	7,063	
77093830-9	 	SCM Antucoya*	 	Chile	—	 	490	 	100.00	 	100.00	 	6,650	 	6,650	 	—	 	—	 	—	 	—	 	6,650	 	6,650	 	6,650	 	6,650	
0-E	 	Abu Dhabi Fertilizer
Industries WL	 	UAE	US$	 	1,961	 	37.00	 	37.00	 	3,675	 	4,641	 	—	 	1,761	 	—	 	652	 	1,360	 	1,717	 	1,360	 	1,717	
0-E	 	Fertilizantes Olmeca y
SQM S.A. de C.V.	 	Mexico	Mex. $	 	—	 	50.00	 	—	 	1,717	 	—	 	382	 	—	 	191	 	—	 	859	 	— 	 	859	 	—	
0-E	 	Nutrisi Holding N.V.	 	Belgium	US$	 	—	 	50.00	 	50.00	 	742	 	1,164	 	(220	)	215	 	(110	)	107	 	371	 	852	 	371	 	852	
0-E	 	Doktor Tarsa	 	Turkey	US$	 	—	 	50.00	 	50.00	 	471	 	471	 	—	 	—	 	—	 	—	 	236	 	236	 	236	 	236	
0-E	 	Mineag SQM Africa
Limited	 	Africa	US$	 	—	 	50.00	 	50.00	 	640	 	245	 	—	 	—	 	—	 	—	 	320	 	 123	 	320	 	123	
0-E	 	SQM Italia S.R.L.	 	Italy	US$	 	—	 	—	 	25.00	 	—	 	367	 	—	 	—	 	—	 	—	 	—	 	92 	 	—	 	92	
0-E	 	Ajay Europe S.A.R.L.	 	France	US$	 	—	 	50.00	 	50.00	 	634	 	345	 	—	 	—	 	—	 	—	 	317	 	173	 	317	 	173	
77557430-5	 	Sales de Magnesio Ltda.	 	Chile	—	 	—	 	50.00	 	50.00	 	150	 	49	 	52	 	(116	)	26	 	(58	)	75	 	25	 	75	 	25	
81767200-0	 	Asoc. Garantizadora
Pensiones	 	Chile	—	 	—	 	3.31	 	3.31	 	664	 	733	 	—	 	—	 	—	 	—	 	22	 	24	 	22	 	24	
96864750-4	 	Potassium S.A.	 	Chile	—	 	14,625,000	 	—	 	89.66	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	 —	 	—	 	—	
0-E	 	SQM Venezuela S.A.	 	Venezuela 	US$	 	59,550	 	0.00	 	50.00	 	—	 	160	 	—	 	99	 	—	 	49	 	—	 	57	 	—	 	57	
0-E	 	Rui Xin Packaging
Materials Sanhe Co. Ltd.	 	China	US$	 	—	 	25.00	 	—	 	480	 	—	 	—	 	—	 	—	 	—	 	120	 	 —	 	120	 	—	
0-E	 	Impronta S.R.L.	 	Italy	EUR	 	—	 	50.00	 	—	 	48	 	—	 	—	 	—	 	—	 	—	 	24	 	—	 	24	 	—	
	
Total	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	77,542	 	62,070	 	77,542	 	62,047	
	
*       In development stage.
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Note 9 — Goodwill and Negative Goodwill 
a)   Goodwill 
	
 	 	 	 	September 30, 2002	 	September 30, 2001	 	
Tax Registration
Number	 	Company	 	Amount amortized
during the period	 	Goodwill
amount	 	Amount amortized
during the period	 	Goodwill
amount	 	
 	 	 	 	Th.US$	 	Th.US$	 	Th.US$	 	Th.US$	 	
	
0-E	 	PTM – SQM Ibérica S.A.	 	  15	 	    85	 	  15	 	  105	 	
0-E	 	Doktor Tarsa	 	  16	 	  377	 	  16	 	  398	 	
79768170-9	 	Soquimich Comercial S.A.	 	113	 	  460	 	113	 	  610	 	
78208790-8	 	SCM SQM Boratos	 	  65	 	—	 	  12	 	    69	 	
93390000-2	 	Empresas Melón S.A.	 	381	 	7,333	 	417	 	8,396	 	
79626800-K	 	SQM Salar S.A.	 	  32	 	  137	 	  32	 	  180	 	
0-E	 	SQM México S.A. de C.V.	 	  42	 	1,072	 	—	 	—	 	
96864750-4	 	SQM Potassium S.A.	 	108	 	2,060	 	—	 	—	 	
0-E	 	SQM Venezuela S.A	 	124	 	    41	 	—	 	—	 	
	
 	 	Total	 	896	 	11,565	 	605	 	9,758	 	

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b)   Negative Goodwill
	
 	 	 	 	September 30, 2002	 	September 30, 2001	 	
Tax Registration
Number 	 	Company	 	Amount amortized
during the period 	 	Negative
goodwill
amount 	 	Amount amortized
during the period 	 	Negative
goodwill
amount 	 	
 	 	 	 	Th.US$	 	Th.US$	 	Th.US$	 	Th.US$	 	
	
79626800-K	 	SQM Salar S.A.	 	158	 	228	 	158	 	438	 	
96575300-1	 	Minera Mapocho S.A.	 	152	 	728	 	152	 	932	 	
	
 	 	Total	 	310	 	956	 	310	 	1,370	 	

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Note 10 — Other Non-current Assets 
As of September 30, other non-current assets were as follows: 
 	2002	 	2001	 	
 		 		 	
 	Th.US$ 	 	Th.US$	 	
 	 	 	 	 	
Engine and equipment spare-parts, net	25,507	 	32,303	 	
Nitrate deposit development costs	4,061	 	3,555	 	
Mineral development costs	10,821	 	14,644	 	
Pensions plan	1,911	 	2,721	 	
Construction of Salar-Baquedano road	1,920	 	2,040	 	
Deferred loan issuance costs	3,871	 	5,755	 	
Other assets	1,066	 	1,096	 	
 		 		 	
Total	49,157	 	62,114	 	
 		 		 	
Note 11 — Bank Debt 
a)   Short-term bank debt is detailed as follows: 
Bank or financial institution:	2002	 	2001	 	
 		 		 	
 	Th.US$ 	 	Th.US$	 	
 	 	 	 	 	
Bank Santiago	—	 	15,164	 	
Royal Bank of Canada	—	 	20,294	 	
Bank Santander	—	 	12,388	 	
Bank Estado	—	 	23,327	 	
Citibank	—	 	10,314	 	
Banco Crédito e Inversiones	—	 	4,458	 	
Banco A. Edwards	—	 	4,150	 	
Other banks	996	 	3,808	 	
 		 		 	
Total	996	 	93,903	 	
 		 		 	
Annual average interest rate	4.25	%	4.77	%	
 		 		 	
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Note 11 — Bank Debt (continued) 
 	 	 	2002	 	2001	 	
 	 	 		 		 	
 	 	 	Th.US$ 	 	Th.US$	 	
 	 	 	 	 	 	 	
b)	Long-term bank debt	 	 	 	 	 	
 	 	 	 	 	 	 	
 	Union Bank of Switzerland (1)	 	200,642	 	200,642	 	
 	ING Bank (2)	 	60,133	 	120,521	 	
 	Bank of America N.A.N.Y. (3)	 	80,893	 	81,429	 	
 	Corpbanca (4)	 	—	 	12,091	 	
 	Bhif	 	—	 	16,283	 	

 	Total	 	341,668	 	430,966	 	
 	 	 	 	 	 	 	
 	Less: Current portion	 	(61,668	)	(2,966	)	
 	 	 		 		 	
 	Long-term portion	 	280,000	 	428,000	 	
 	 	 		 		 	
 	(1)  	U.S. dollar-denominated loan with no guarantee, interest rate of 7.7% per annum, semi-annual interest payments and payment of principal on September 15, 2006.	
 	(2)  	U.S. dollar-denominated loan with no guarantee, interest rate of 2.36% per annum, semi-annual interest payments and payment of principal on February 23, 2003.	
 	(3)  	U.S. dollar-denominated loan with no guarantee, interest rate of 3.240% per annum, semi-annual payments of interest and payment of principal on November 29, 2005.	
 	(4)  	U.S. dollar-denominated loan with no guarantee, interest rate of 2,984% per annum, semi-annual interest payments and payment of principal on August 2002.	
 	
Long-term debt matures as follows:	

Years to maturity	2002	 	
 		 	
 	Th.US$	 	
 	 	 	
Current portion	61,668	 	
1 to 2 years	32,000	 	
2 to 3 years	32,000	 	
3 to 5 years	216,000	 	
 		 	
Total	341,668	 	

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Note 12 — Accrued Liabilities 
As of September 30, 2002 and 2001, accrued liabilities consisted of: 
 	2002	 	2001	 	
 		 		 	
 	Th.US$ 	 	Th.US$	 	
 	 	 	 	 	
Quarterly bonus	540	 	144	 	
Suppliers	1,358	 	825	 	
Investments plans	—	 	120	 	
Commissions on consignment goods	629	 	634	 	
Taxes and monthly tax provisional payments	366	 	449	 	
Vacation accrual	4,620	 	5,242	 	
Accrued employee benefits	223	 	251	 	
Warehouse expenses	137	 	599	 	
Provision for royalties	932	 	823	 	
Commissions Hydro	1,180	 	—	 	
Credits expenses	420	 	48	 	
Others	3,038	 	7,683	 	
 		 		 	
Total current liabilities	13,443	 	16,818	 	
 		 		 	
Note 13 — Income and Deferred Tax 
a)	At September 30, 2002 and 2001, the Company and its subsidiaries have the following consolidated balances for retained tax earnings, income not subject to taxes, tax loss carry-forwards and credit for shareholders: 	
  
 	2002	 	2001	 	
 		 		 	
 	Th.US$ 	 	Th.US$	 	
 	 	 	 	 	
Accumulated tax basis retained earnings
with tax credit	25,096	 	22,027	 	
Accumulated tax basis retained earnings
with no credit	10	 	1,806	 	
Income not subject to taxes	—	 	2,776	 	
Tax loss carryforwards (1)	116,410	 	128,433	 	
Credit for shareholders	4,639	 	3,887	 	
 	 	 	 	 	
(1) The consolidated tax loss carryforwards have no expiration date. 	 	 	 	 	
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Note 13 — Income and Deferred Tax (continued) 
  
b)	 Deferred taxes 	
 	 	
 	The deferred taxes as of September 30, 2002 and 2001 represented a net liability of Th.US$ 12,348 and Th.US$ 5,557 respectively, and consisted of: 	

2002	 	Deferred tax asset	 	Deferred tax liability	 	
Temporary differences	 	Short-term	 	Long-term	 	Short-term	 	Long-term	 	
 	 	Th.US$ 	 	Th.US$	 	Th.US$	 	Th.US$	 	
	 	
Provision for bad debt	 	281	 	832	 	—	 	—	 	
Vacation accrual	 	747	 	—	 	—	 	—	 	
Accrued exchange insurance loss	 	—	 	591	 	—	 	—	 	
Unrealized gain on sale of products	 	6,068	 	—	 	123	 	—	 	
Provision for obsolescence	 	—	 	1,184	 	—	 	—	 	
Production expenses	 	—	 	—	 	11,016	 	—	 	
Fixed asset depreciation	 	—	 	—	 	—	 	58,372	 	
Exploration expenses	 	—	 	—	 	—	 	4,114	 	
Capitalized interest	 	—	 	—	 	—	 	6,538	 	
Provision for severance indemnities	 	—	 	—	 	—	 	2,457	 	
Capitalized expenses	 	—	 	—	 	—	 	819	 	
Tax loss carry-forwards	 	—	 	21,624	 	—	 	—	 	
Other	 	369	 	—	 	102	 	648	 	
	 	
Total gross deferred taxes	 	7,465	 	24,231	 	11,241	 	72,948	 	
Total complementary accounts	 	(12	) 	(1,618	)	(3,342	)	(38,433	)	
	 	
Total deferred taxes	 	7,453	 	22,613	 	7,899	 	34,515	 	

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2001	 	Deferred tax asset	 	Deferred tax liability	 	
Temporary differences	 	Short-term	 	Long-term	 	Short-term	 	Long-term	 	
 	 	Th.US$ 	 	Th.US$	 	Th.US$	 	Th.US$	 	
	 	
Provision for bad debt	 	315	 	781	 	—	 	—	 	
Vacation accrual	 	789	 	—	 	—	 	—	 	
Unrealized gains	 	9	 	521	 	—	 	—	 	
Unrealized gain on sale of products	 	4,153	 	—	 	—	 	—	 	
Provision for obsolescence	 	—	 	512	 	—	 	—	 	
Production expenses	 	—	 	—	 	8,217	 	—	 	
Leased fixed assets	 	—	 	—	 	—	 	29	 	
Fixed asset depreciation	 	—	 	—	 	—	 	49,244	 	
Exploration expenses	 	—	 	—	 	—	 	4,126	 	
Capitalized interest	 	—	 	—	 	36	 	5,979	 	
Provision for severance indemnities	 	—	 	—	 	—	 	1,927	 	
Accrued expenses	 	—	 	—	 	375	 	—	 	
Capitalized expenses	 	—	 	—	 	—	 	1,075	 	
Tax loss carry-forwards	 	—	 	25,258	 	—	 	—	 	
Other	 	314	 	—	 	—	 	212	 	
	 	
Total gross deferred taxes	 	5,580	 	27,072	 	8,628	 	62,592	 	
Total complementary accounts	 	(229	) 	(9,781	) 	(3,413	)	(39,608	)	
	 	
Total deferred taxes	 	5,351	 	17,291	 	5,215	 	22,984	 	
	 	
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Note 13 — Income and Deferred Tax (continued) 
c)   Income tax expense is as follows: 
 	 	2002	 	2001	 	
 	 		 		 	
 	 	Th.US$ 	 	Th.US$	 	
 	 	 	 	 	 	
Provision for current income tax	 	(3,552	)	(3,631	)	
Effect of assets and liabilities of current deferred taxes	 	(6,092	)	512	 	
Effect of amortization of complementary accounts	 	1,138	 	(3,357	)	
Other tax debits and credits	 	420	 	(883	)	
 	 		 		 	
Total income tax expense	 	(8,086	)	(7,359	)	
 	 		 		 	
Note 14 — Long Term provision
a)   Reserve for Severance Benefits 

The activity of this account is as follows: 
 	 	2002	 	 	2001	 	
 	 		 	 		 	
 	 	Th.US$ 	 	 	Th.US$	 	
 	 	 	 	 	 	 	
Opening balance	 	8,326	 	 	6,563	 	
Increases	 	1,530	 	 	3,327	 	
Payments	 	(805	)	 	(3,007	)	
Exchange difference	 	(1,094	)	 	(1,119	)	
 	 		 	 		 	
 	 	7,957	 	 	5,764	 	
b)   Other 
Investments with negative capital	 	—	 	 	1,734	 	
 	 		 	 		 	
Total	 	7,957	 	 	7,498	 	

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Note 15 — Minority Interest 
Minority interest consisted of: 
	
 	Equity	 	Net
Income/(Loss)	 	
 	2002	 	2001	 	2002	 	2001	 	
 		 		 		 		 	
 	Th.US$	 	Th.US$	 	Th.US$ 	 	Th.US$	 	

Soquimich Comercial S.A	18,363	 	18,636	 	(1,420	)	(1,201	)	
Ajay SQM Chile S.A	3,159	 	3,026	 	(279	)	(293	)	
Cape Fear Bulk LLC	116	 	82	 	(112	)	(88	)	
SQM Indonesia	3	 	15	 	7	 	(5	)	
Fenasa	261	 	96	 	(55	) 	(22	)	
Potassium S.A	—	 	1,522	 	—	 	18	 	
SQM Italia S.R.L	17	 	—	 	4	 	—	 	
	
Total	21,919	 	23,377	 	(1,855	)	(1,591	)	
	
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Note 16 — Shareholders’ Equity 
a)   Changes to Shareholders’ Equity consisted of: 
	 	
 	 	Number
of shares	 	Paid-in
capital	 	Others
reserves	 	Accumulated deficit
of subsidiaries in
development
stage	 	Retained
earnings	 	Net
income	 	Total	 	
 	 	 	 	Th.US$	 	Th.US$	 	Th.US$	 	Th.US$	 	Th.US$	 	Th.US$	 	

Balance December 31, 2000	 	263,196,524	 	477,386	 	139,829	 	(1,832	)	181,607	 	27,104	 	824,094	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Transfer December 31, 2000 net income to retained earnings	 	—	 	—	 	—	 	—	 	27,104	 	(27,104	)	—	 	
Definitive dividends	 	—	 	—	 	—	 	—	 	(13,345	)	—	 	(13,345	)	
Accumulated deficit from subsidiaries in development stage (1)	 	—	 	—	 	—	 	(237	)	—	 	—	 	(237	)	
Translation adjustment (2)	 	—	 	—	 	(13,816	)	 	 	—	 	—	 	(13,816	)	
2001 Net income	 	—	 	—	 	—	 	—	 	—	 	22,046	 	22,046		
	 	
Balance September 30, 2001	 	263,196,524	 	477,386	 	126,013	 	(2,069	)	195,366	 	22,046	 	818,742	 	

Balance December 31, 2001	 	263,196,524	 	477,386	 	131,066	 	(2,223	)	195,366	 	30,102	 	831,697	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Transfer December 31, 2001 net income to retained earnings	 	—	 	—	 	—	 	—	 	30,102	 	(30,102	)	—		
Definitive dividends	 	—	 	—	 	—	 	—	 	(14,844	)	—	 	(14,844	)	
Accumulated deficit from subsidiary in development stage (1)	 	—	 	—	 	—	 	(874	)	—	 	—	 	(874	)	
Translation adjustment (2)	 	—	 	—	 	(8,642	)	—	 	—	 	—	 	(8,642	)	
2002 Net income	 	—	 	—	 	—	 	—	 	—	 	30,383	 	30,383	 	
	 	
Balance September 30, 2002	 	263,196,524	 	477,386	 	122,424	 	(3,097	)	210,624	 	30,383	 	837,720	 	

(1)	Relates to SQM Lithium Specialties LLP Th.US$ (874) in 2002 and SQM Lithium Specialties LLP Th.US$ (237) in 2001.	
(2)	Relates to a translation adjustment to investments in related companies whose functional currency is the Chilean peso.	
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Note 16 — Shareholders’ Equity (continued) 
b)	The capital is represented by 263,196,524 fully subscribed and paid shares with no par value, divided into 142,819,552 Series A shares and 120,376,972 Series B shares, both preferred, for 2002 and 2001.	
 	 	 	 	
 	The preferential voting rights of each series are as follows: 	
 	 	 	 	
 	Series A:	 	If the election of the president results in a tied vote, the Company’s shareholders may vote once again regardless of the director selected by Series B shareholders. 	
 	 	 	 	
 	Series B: 	1)	A General or Extraordinary Shareholders’ Meeting may be called at the request of shareholders representing 5% of the Company's Series B shares. 	
 	 	 	 	
 	 	2)	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 a director elected by Series B shareholders.	
Accumulated Deficit from subsidiary in Development Stage 
	
Tax
registration
No.	 	
Company	 	Amount for
the year
2002 	 	Accumulated
amount	 	
Observations	
	 		 		 		 		
96864750-4	 	Potasium S.A.	 	—	 	(8	)	 	
	 		 		 		 		
0-E	 	SQM Lithium Specialties	 	(874	)	(1,265	)	  	
	 		 		 		 		
96807530-6	 	Cementos de Chile S.A.	 	—	 	(1,545	)	  	
	 		 		 		 		
0-E	 	SQM Japon K.K.	 	 	 	(100	)	  	
			 		 		 		
0-E	 	SQM Colombia Ltda.	 	—	 	(29	)	  	
	 		 		 		 		
0-E	 	SQM Ecuador S.A.	 	—	 	(150	)	  	
	 		 		 		 		
 	 	Total	 	(874	)	(3,097	)	  	
	
The Company does not have a controlling shareholder due to the structure of shareholder participation. 
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Note 17 — Derivatives Transactions 
As of September 30, the Company had hedging contracts for a total notional amount of Th.US$ 43,719 (Th.US$ 52,869 in 2001), as follows: 
	 	
 	 	 	 	Description of the contract 
	 	Accounts affected
	 	
Type of
derivative 	 	Notional or
Covered
Amount 	 	Expiration
date 	 	Type	 	Position
Purchase/Sale 	 	Liability
Amount 		Loss Recorded	 	
	 	
Forward	 	1,000	 	4th quarter of 2002	 	Exchange rate	 	P	 	67	 	67	 	
 	 	 	 		 		 	 	 	 	 	 	 	
Forward	 	1,000	 	4th quarter of 2002	 	Exchange rate	 	P	 	67	 	67	 	
 	 	 	 		 		 	 	 	 	 	 	 	
Forward	 	1,000	 	4th quarter of 2002	 	Exchange rate	 	P	 	68	 	68	 	
 	 	 	 		 		 	 	 	 	 	 	 	
Forward	 	2,000	 	4th quarter of 2002	 	Exchange rate	 	P	 	129	 	129	 	
 	 	 	 		 		 	 	 	 	 	 	 	
Forward	 	3,000	 	4th quarter of 2002	 	Exchange rate	 	P	 	187	 	187	 	
 	 	 	 		 		 	 	 	 	 	 	 	
Swap	 	2,681	 	1st quarter of 2003	 	Interest rate	 	P	 	551		(3.431	)	
 	 	 	 		 		 	 	 	 	 	 	 	
Put option	 	14,438	 	4th quarter of 2002	 	Exchange rate	 	P	 	—	 	(150	)	
 	 	 	 		 		 	 	 	 	 	 	 	
Put option	 	9,600	 	1st quarter of 2003	 	Exchange rate	 	P	 	—	 	(165	)	
 	 	 	 		 		 	 	 	 	 	 	 	
Forward	 	2,000	 	3rd quarter of 2002	 	Exchange rate	 	P	 	124	 	124	 	
 	 	 	 		 		 	 	 	 	 	 	 	
Forward	 	1,000	 	1st quarter of 2003	 	Exchange rate	 	P	 	63	 	63	 	
 	 	 	 		 		 	 	 	 	 	 	 	
Forward	 	1,000	 	1st quarter of 2003	 	Exchange rate	 	P	 	64	 	64	 	
 	 	 	 		 		 	 	 	 	 	 	 	
Forward	 	2,000	 	1st quarter of 2003	 	Exchange rate	 	P	 	79	 	79	 	
 	 	 	 		 		 	 	 	 	 	 	 	
Forward	 	2,000	 	1st quarter of 2003	 	Exchange rate	 	P	 	75	 	75	 	
 	 	 	 		 		 	 	 	 	 	 	 	
Forward	 	1,000	 	4th quarter of 2002	 	Exchange rate	 	P	 	68	 	68	 	

 	 	43,719	 	 	 	 	 	 	 	1,542	 	(2,755	)	
 	 		 	 	 	 	 	 	 		 		 	
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Note 18 — Non-Operating Income and Expenses 
Certain amounts included in non-operating income and expenses are as follows: 
a)   Non-operating income: 
	2002	 	2001	 	
 		 		 	
 	Th.US$ 		Th.US$	 	
 	 	 	 	 	
Services to third parties	429	 	572	 	
Sell of materials equipment and others	88	 	75	 	
Insurance recoveries	1,038	 	112	 	
Sale of mining properties and concessions	—	 	4,000	 	
North-east right of way	285	 	—	 	
Turnaround of third party obligations	347	 	2,178	 	
Obtained discounts	194	 	92	 	
Other income	677	 	869	 	
 		 		 	
Total	3,058	 	7,898	 	
 		 		 	
b)   Non-operating expenses:
	2002	 	2001	 	
 		 		 	
 	Th.US$ 		Th.US$	 	
 	 	 	 	 	
Amortization of intangible	137	 	143	 	
Investment adjustment	218	 	227	 	
Business effectiveness project	1,406	 	—	 	
Provision for bad debt	88	 	—	 	
Provision for obsolete inventories written-off	900	 	600	 	
Write-offs Investment in fixed assets plan	605	 	583	 	
Inventories adjustment	178	 	346	 	
Taxes	547	 	—	 	
Consultants expenses	112	 	416	 	
Training and donations	176	 	106	 	
Other expenses	1,029	 	665	 	
 		 		 	
 	5,396	 	3,094	 	
 		 		 	
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Note 19 — Extraordinary Items 
Extraordinary items were generated during 2001 only and relate to the restructuring expenses, as follows: 
 	2002	 	2001	 	
 		 		 	
 	Th.US$ 		Th.US$	 	
 	 	 	 	 	
Restructuring and advisory expenses	—	 	(5,628	)	
Tax effect on extraordinary items	—	 	844	 	
 		 		 	
Total	—	 	(4,784	)	
 		 		 	
Note 20 — Guarantees, Liens, Contingencies and Commitments 
a)   Contingencies: 
The Company has not recognized the effect of potential insurance recoveries relating to the compensation for damage resulting from a loss incident in the potassium sulfate ponds in the Atacama salt deposit. 
The Company and its subsidiaries are involved in litigation in the ordinary course of business. Based on advice of council, management believes the litigation will not have a material effect on the consolidated financial statements. 
The Company is currently reviewing the Production Model schemes for the María Elena works, which could be implemented as a result of the decontamination plan (note 24). 
The different production and technology development alternatives for the works in María Elena, which are a part of the aforementioned Production Models, do not initially result in relevant changes in the current mining reserves or projected volume sales. 
These alternatives are in place among other options for production through leaching piles and that of implementing a mixed system through this technology and the current production methods. 
Advantages and disadvantages for the different alternatives relate to the extension of transition periods, investments to be made, production costs, changes in technology and production processes, the effects on certain company’s assets and in the value of these assets. 
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In regard to the possible effects of the valuation of assets an objective quantification of this is still not possible. 
b)   Commitments: 
The subsidiary SQM Salar S.A. maintains an agreement with a government agency, which obligates the company to make annual payments to this institution based on the company’s annual sales until 2030. This sum, which has been paid since inception of the agreement in 1996, is reflected as expenses of Th.US$ 2,546 in 2002 (Th.US$ 1,636 in 2001). 
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Note 20 — Guarantees, Liens, Contingencies and Commitments (continued) 
d)   Indirect guarantees 
	
 	Debtor	 	 		Assets involved		Balances outstanding	
 		 	 	 		 		
Beneficiary	Name	 	Relationship	 	Guarantee	 	Type	 	Book value
Th.US$	 	09-30-2002
Th.US$ 	 	09-30-2001
Th.US$	

ING Bank – Phelps	 	 	 	 	 	 	 	 	 	 	 	 	 	
Dodge Corporation	SQM Potasio S.A.	 	Subsidiary 	 	Guarantee	 	—	 	—	 	3,600	 	4,969	
 	 	 	 	 	 	 		 	 	 	 	 		
Royal Bank of Canada	SQM Investment 	 	 	 	 	 		 	 	 	 	 		
 	Corporation N.V.	 	Subsidiary 	 	Guarantee	 	—	 	—	 	—	 	20,294	
 	 	 	 	 	 	 		 	 	 	 	 		
Bank of America N.A.	RS Agro-Chemical	 	 	 	 	 		 	 	 	 	 		
 	Trading A.V.V.	 	Subsidiary	 	Guarantee	 	—	 	—	 	80,893	 	81,429	
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Note 21 — Third Party Guarantees 
During 2002 and 2001, the Company did not have any significant guarantees granted to third parties. 
Note 22 — Sanctions 
During 2002 and 2001, the Chilean Superintendency of Securities and Insurance did not apply sanctions to the Company, its directors or managers. 
Note 23 — Subsequent Events 
Company management are not aware of any significant subsequent events occurred between September 30, 2002 and the date of issuance of these consolidated financial statements (November 08, 2002), which may affect the presentation of these financial statements. 
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Note 24 — Environmental Projects 
Disbursements incurred by the Company at September 30, 2002 related to its investments in production processes, the verification and control of compliance with official ordinances and laws relative to industrial processes and facilities amount to Th.US$ 6,597, as follows: 
Project	 	 	
 	Th.US$	 	
 	 	 	
Environmental department	206	 	
Coya Sur sewage treatment plant	506	 	
Pedro de Valdivia sewage treatment plant	39	 	
Descontaminación Planta Boratos	44	 	
Engineering and building of María Elena piles	4,680	 	
Replacement of oil with natural gas	857	 	
Tocopilla Money Exchange Office	99	 	
Tocopilla Dust Captation	108	 	
Environmental impact evaluation	58	 	
 		 	
Total	6,597	 	
 		 	
With respect to the project for the replacement of oil with natural gas, the supplier will make an investment of Th.US$ 5,500 which will be paid by the Company in monthly installments during the contract’s term (10 years). 
Technological processes are oriented to be environment-friendly and will strive to achieve the maximum reduction of waste as well as incorporating technological conditions, which ensure the efficient protection of the environment. As an example we may mention the increasing replacement of oil with natural gas in the Company’s plants. 
Operation which use caliche as raw material are developed in desert areas under favorable climatic conditions for solar drying and evaporation of solid and liquid substances. Open-pit extractive operations of minerals, due to their low material to mineral ratio generate deposits, which result in a slight alteration of the environment, and during the extractive process normal emissions are generated. 
On August 10, 1993, The Ministry of Health published a resolution in the Official Gazette, which, in line with the Sanitary Code, established that particle levels in the productive facilities in María Elena exceeded the level allowed for air quality, which affected the location nearby.
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Remaining parts come mainly from dust produced during the processing of caliche, specially during the grinding process of ore prior to the leaching process. With certain indications, the Company’s plan for the decontamination and reduction of particles was approved through the Decree No. 164. As a result of the investments and processes implemented in line with the approved plan, the Company has been able to significantly decrease particle levels in the environment. Resolution No. 384 published in the Official Gazette on May 16, 2000, authorized the review and drafting of a decontamination plan for the María Elena location. CONAMA should be able to publish its final resolution in the Official Gazette within the next few months. However, this cannot ensure that during the period, the Company will no be subject to any notices, fines or possible temporary closures on the mill grinding facilities located in María Elena. The Company continuously analyzing techniques, processes and systems for the processing of caliche, which could allow additional reductions in particles in the María Elena location. 
Mineral treatment operations, due to the fact that these processes are controlled, generate solid waste, which relate to the non-soluble remaining part of the mineral with moist. 
Productive operations from brines are performed in the Atacama salt deposit. Note that almost 95% of the energy used is obtained from the Sun. The remaining 5% is provided by electrical supply and fossil fuels. The remaining brines are re-injected to the salt deposit in order to minimize any possible impact on the environment. 
SQM entered a contract with CONAF (the National Forestry Corporation) in order to monitor the activities of colonies of flamingo in the lagoon systems in the Atacama salt deposit, which includes counting birds, their reproduction and in-depth studies aiming to correlate the behavior of these birds with the different climatological phenomena occurred in the aforementioned sector. 
In addition, the Company in its permanent commitment with environmental authorities, is active participant in the Joint Monitoring Study of the Atacama Salt deposit Basin, which includes the participation of other mining companies who use the water resources provided by the Atacama Salt deposit Basin. 
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