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 three month period ended on March 31, 2004.
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      x     	Form 40-F ______	
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ______	No      x     .	
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82___________

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On May 10, 2004, 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 three-month period ended on March 31, 2004. 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 THREE MONTH PERIOD ENDED MARCH 31, 2004 REPORT FILED WITH THE SUPERINTENDENCIA DE VALORES Y SEGUROS (SVS) IN CHILE, AND UNLESS OTHERWISE INDICATED, FIGURES ARE IN US DOLLARS.	 	 	

 

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Consolidated Financial Statements
SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
As of March 31, 2004 and 2003
and for the years ended March 31, 2004 and 2003
(A translation of the original in Spanish- see note 2 (a))
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 			6	 	

Ch$	 	 	—	 	 	Chilean pesos	 	
ThCh $	 	 	—	 	 	Thousands of Chilean pesos	 	
US$	 	 	—	 	 	United States dollars	 	
ThUS$	 	 	—	 	 	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.	 	

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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Consolidated Balance Sheets
(A translation of the original in Spanish- see note 2 (a))
 	 	 	 	 	 	As of March 31,	 	
 	 	 	Note	 	 	2004	 	 	2003	 	
 	 	 	 	 	 		 	 		 	
 	 	 	 	 	 	ThUS$	 	 	ThUS$	 	
ASSETS	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	
Current assets	 	 	 	 	 	 	 	 	 	 	
     Cash	 	 	 	 	 	13,693	 	 	19,035	 	
     Time deposits	 	 	 	 	 	36,184	 	 	11.832 	 	
     Marketable securities	 	 	4	 	 	35,229	 	 	56,502 	 	
     Accounts receivable, net 	 	 	5	 	 	136,633	 	 	116,216 	 	
     Other accounts receivable, net	 	 	5	 	 	12,016	 	 	10,349	 	
     Accounts receivable from related companies	 	 	6	 	 	31,110	 	 	31,868 	 	
     Inventories, net	 	 	7	 	 	253,474	 	 	227,435 	 	
     Recoverable taxes	 	 	 	 	 	15,307	 	 	12,018 	 	
     Prepaid expenses	 	 	 	 	 	5,617	 	 	4,300 	 	
     Other current assets	 	 	 	 	 	35,386	 	 	17,314 	 	
 	 	 	 	 	 		 	 		 	
          Total current assets	 	 	 	 	 	574,649	 	 	506,869 	 	

Property, plant and equipment, net	 	 	8	 	 	659,924	 	 	679,034	 	
 	 	 	 	 	 		 	 		 	
Other Assets 	 	 	 	 	 	 	 	 	 	 	
     Investments in related companies	 	 	9	 	 	83,055	 	 	72,297 	 	
     Goodwill, net	 	 	10	 	 	12,882	 	 	12,192 	 	
     Negative goodwill, net	 	 	10	 	 	(423	)	 	(750	)	
     Intangible assets, net	 	 	 	 	 	4,641	 	 	4,920 	 	
     Long-term accounts receivable, net	 	 	5	 	 	7,135	 	 	8,894 	 	
     Long-term accounts receivable from related companies	 	 	6	 	 	340	 	 	424 	 	
     Other long-term assets	 	 	11	 	 	48,765	 	 	49,313 	 	
 	 	 	 	 	 		 	 		 	
          Total Other Assets	 	 	 	 	 	156,395	 	 	147,290	 	
 	 	 	 	 	 		 	 		 	
          Total assets	 	 	 	 	 	1,390,968	 	 	1,333,193 	 	
 	 	 	 	 	 		 	 		 	
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
(A translation of the original in Spanish- see note 2 (a))
 	 	 	 	 	 	As of March 31,	 	
 	 	 	Note	 	 	2004	 	 	2003	 	
 	 	 	 	 	 		 	 		 	
 	 	 	 	 	 	ThUS$	 	 	ThUS$	 	
LIABILITIES AND SHAREHOLDERS’ EQUITY	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	
Current liabilities	 	 	 	 	 	 	 	 	 	 	
     Short-term bank debt	 	 	12	 	 	66,850	 	 	2,280	 	
     Current portion of long-term debt	 	 	12	 	 	1,041	 	 	17,751	 	
     Dividends payable	 	 	 	 	 	170	 	 	147	 	
     Accounts payable	 	 	 	 	 	54,211	 	 	47,274	 	
     Other accounts payable	 	 	 	 	 	1,412	 	 	2,482	 	
     Notes and accounts payable to related companies	 	 	6	 	 	14,735	 	 	12,369	 	
     Accrued liabilities	 	 	13	 	 	14,043	 	 	10,043	 	
     Withholdings	 	 	 	 	 	2,552	 	 	2,559	 	
     Income taxes	 	 	 	 	 	1,220	 	 	1,865	 	
     Deferred income taxes	 	 	14	 	 	6,423	 	 	2,291	 	
     Deferred income 	 	 	 	 	 	1,576	 	 	1,600	 	
     Other current liabilities	 	 	 	 	 	283	 	 	265	 	
 	 	 	 	 	 		 	 		 	
          Total current liabilities	 	 	 	 	 	164,516	 	 	100,926	 	

Long-term liabilities	 	 	 	 	 	 	 	 	 	 	
     Long-term bank debt	 	 	12	 	 	260,000	 	 	324,000	 	
     Other accounts payable	 	 	 	 	 	2,007	 	 	2,820	 	
     Deferred income taxes	 	 	14	 	 	26,367	 	 	15,370	 	
     Staff severance indemnities	 	 	15	 	 	9,914	 	 	8,943	 	
 	 	 	 	 	 		 	 		 	
          Total long-term liabilities	 	 	 	 	 	298,288	 	 	351,133	 	

     Minority interest	 	 	16	 	 	28,815	 	 	22,924	 	

Shareholders’ equity	 	 	 	 	 	 	 	 	 	 	
     Paid-in capital	 	 	17	 	 	477,386	 	 	477,386	 	
     Other reserves	 	 	17	 	 	137,663	 	 	123,954	 	
     Retained earnings	 	 	17	 	 	284,300	 	 	256,870	 	
 	 	 	 	 	 		 	 		 	
          Total shareholders’ equity	 	 	 	 	 	899,349	 	 	858,210	 	

               Total liabilities and shareholders’ equity	 	 	 	 	 	1,390,968	 	 	1,333,193	 	
 	 	 	 	 	 		 	 		 	
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
(A translation of the original in Spanish- see note 2 (a))
 	 	 	 	 	 	For the years ended	 	
 	 	 	 	 	 	March 31,	 	
 	 	 	Note	 	 	2004	 	 	2003	 	
 	 	 	 	 	 		 	 		 	
 	 	 	 	 	 	ThUS$	 	 	ThUS$	 	
Operating results	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	
     Sales	 	 	 	 	 	171,586	 	 	151,521 	 	
     Cost of sales	 	 	 	 	 	(134,344	)	 	(121,792	)	
 	 	 	 	 	 		 	 		 	
          Gross margin	 	 	 	 	 	37,242	 	 	29,729	 	
     Selling and administrative expenses	 	 	 	 	 	(13,256	)	 	(10,940	)	
 	 	 	 	 	 		 	 		 	
          Operating income	 	 	 	 	 	23,986	 	 	18,789	 	

 	 	 	 	 	 	 	 	 	 	 	
Non-operating results	 	 	 	 	 	 	 	 	 	 	
     Non-operating income	 	 	19	 	 	4,115	 	 	6,442	 	
     Non-operating expenses	 	 	19	 	 	(8,959	)	 	(10,161	)	
 	 	 	 	 	 		 	 		 	
          Non-operating loss	 	 	 	 	 	(4,844	)	 	(3,719	)	
 	 	 	 	 	 		 	 		 	
     Income before income taxes	 	 	 	 	 	19,142	 	 	15,070	 	
     Income tax expense	 	 	14	 	 	(4,401	)	 	(3,863	)	
 	 	 	 	 	 		 	 		 	
          Income before minority interest	 	 	 	 	 	14,741	 	 	11,207	 	
     Minority interest	 	 	16	 	 	(795	)	 	(506	)	
 	 	 	 	 	 		 	 		 	
          Net income before negative goodwill	 	 	 	 	 	13,946	 	 	10,701	 	
     Amortization of negative goodwill	 	 	10	 	 	51	 	 	103	 	
 	 	 	 	 	 		 	 		 	
          Net income for the year	 	 	 	 	 	13,997	 	 	10,804	 	
 	 	 	 	 	 		 	 		 	
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 Cash Flows
(A translation of the original in Spanish- see note 2 (a))
 	 	 	For the years ended March 31	 	
 	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	
 	 	 	ThUS$	 	 	ThUS$	 	
Cash flows from operating activities	 	 	 	 	 	 	 	
Net income for the year	 	 	13,997	 	 	10,804	 	
 	 	 	 	 	 	 	 	
Charges (credits) to income not representing cash flows	 	 	 	 	 	 	 	
Depreciation expense	 	 	14,802	 	 	14,752	 	
Amortization of intangible assets	 	 	66	 	 	71	 	
Write-offs and accruals	 	 	10,902	 	 	6,864	 	
Gain on equity investments in related companies	 	 	(2,739	)	 	(2,353	)	
Loss on equity investments in related companies	 	 	73	 	 	—	 	
Amortization of goodwill	 	 	337	 	 	245	 	
Amortization of negative goodwill	 	 	(51	)	 	(103	)	
(Profit) loss on sales of assets	 	 	(26	)	 	8	 	
Other credits to income not representing cash flows	 	 	(318	)	 	(487	)	
Other charges to income not representing cash flows	 	 	12,909	 	 	8,860	 	
Foreign exchange difference, net	 	 	566	 	 	(2,377	)	
Net changes in operating assets and liabilities:	 	 	 	 	 	 	 	
(Increase) decrease in trade accounts receivable	 	 	5,692	 	 	(12,420	)	
Increase in inventories	 	 	(11,606	)	 	10,903	 	
Decrease in other assets	 	 	(11,538	)	 	(195	)	
(Decrease) increase in accounts payable	 	 	4,143	 	 	(2,057	)	
Increase (decrease) in interest payable	 	 	(3,472	)	 	(4,892	)	
Decrease in net income taxes payable	 	 	795	 	 	(1,104	)	
(Decrease) increase in other accounts payable	 	 	(1,373	)	 	1,272	 	
Decrease in VAT and taxes payable	 	 	2,928	 	 	2,742	 	
Minority interest	 	 	795	 	 	506	 	
 	 	 		 	 		 	
Net cash provided from operating activities	 	 	36,882	 	 	31,039	 	

Cash flows from financing activities	 	 	 	 	 	 	 	
Proceeds from short term bank financing	 	 	22,056	 	 	—	 	
Loans to related companies	 	 	—	 	 	—	 	
Payment of dividends	 	 	(29	)	 	(311	)	
Repayment of bank financing	 	 	(12,626	)	 	(2,126	)	
 	 	 		 	 		 	
Net cash used in financing activities	 	 	9,401	 	 	(2,437	)	

Cash flows from investing activities	 	 	 	 	 	 	 	
Sales of property, plant and equipment	 	 	597	 	 	49	 	
Sales of investments	 	 	203	 	 	417	 	
Other investing income 	22	 	104	 	 	5,759	 	
Additions to property, plant and equipment	 	 	(7,973	)	 	(8,552	)	
Capitalized interest	 	 	(411	)	 	(790	)	
Purchase of permanent investments	 	 	(475	)	 	(1,970	)	
Purchase of investments	 	 	—	 	 	—	 	
Other disbursements	 	 	—	 	 	(1,331	)	
 	 	 		 	 		 	
Net cash used in investing activities	 	 	(7,955	)	 	(6,418	)	

Effect of inflation on cash and cash equivalents	 	 	(1,911	)	 	(144	)	
Net change in cash and cash equivalents	 	 	36,417	 	 	22,040	 	
Beginning balance of cash and cash equivalents	 	 	69,273	 	 	65,204	 	
 	 	 		 	 		 	
Ending balance of cash and cash equivalents	 	 	105,690	 	 	87,244	 	
 	 	 		 	 		 	
The accompanying notes form 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
(A translation of the original in Spanish- see note 2 (a))
Note 1 – Company Background
Sociedad Química y Minera de Chile S.A. (the “Company”) was registered with the Chilean Superintendency of Securities and Insurance (“SVS”) on March 18, 1983. 
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 SVS. For the convenience of the reader, the consolidated financial statements and their accompanying notes have been translated from Spanish into English. Certain accounting practices applied by the Company that conform with Chilean GAAP may not conform with generally accepted accounting principles in the United States (“US GAAP”).	
 	 	
 	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 controlling participation, generally equal to direct or indirect ownership of more than 50%). The Parent Company and its subsidiaries are referred to as the “Company”.	
 	 	
 	The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. 	
 	 	
 	In accordance with regulations set forth by the SVS in its Circular No. 368 and Technical Bulletins Nos. 42 and 64 of the Chilean Association of Accountants, the consolidated financial statements include the following subsidiaries:	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 2 – Summary of Significant Accounting Policies (continued)
a)	Basis for the preparation of the consolidated financial statements (continued)	
 	 	 	Direct or indirect ownership	 	
 	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	
Foreign subsidiaries:	 	 	%	 	 	%	 	
Nitrate Corp. of Chile Limited (United Kingdom)	 	 	100.00	 	 	100.00 	 	
Soquimich SRL – Argentina	 	 	100.00	 	 	100.00 	 	
Nitratos Naturais do Chile Ltda. (Brazil)	 	 	100.00	 	 	100.00 	 	
SQM Europe NV (Belgium)	 	 	100.00	 	 	100.00 	 	
SQM North America Corp. (USA)	 	 	100.00	 	 	100.00 	 	
North American Trading Company (USA)	 	 	100.00	 	 	100.00 	 	
SQM Peru S.A.	 	 	100.00	 	 	100.00 	 	
SQM Corporation NV (Dutch Antilles)	 	 	100.00	 	 	100.00 	 	
S.Q.I. Corporation NV (Dutch Antilles)	 	 	100.00	 	 	100.00 	 	
Soquimich European Holding BV (Holland)	 	 	100.00	 	 	100.00 	 	
PTM – SQM Ibérica S.A. (Spain)	 	 	100.00	 	 	100.00 	 	
SQMC Holding Corporation LLP (USA)	 	 	100.00	 	 	100.00 	 	
SQM Ecuador S.A.	 	 	100.00	 	 	100.00 	 	
Cape Fear Bulk LLC (USA)	 	 	  51.00	 	 	  51.00 	 	
SQM Colombia Ltda.	 	 	     —	 	 	100.00 	 	
SQM Investment Corporation NV (Holland)	 	 	100.00	 	 	100.00 	 	
SQM Brasil Ltda.	 	 	100.00	 	 	100.00 	 	
Royal Seed Trading Corporation AVV (Aruba)	 	 	100.00	 	 	100.00 	 	
SQM Japan K.K.	 	 	100.00	 	 	100.00 	 	
SQM Oceanía PTY Limited (Australia)	 	 	100.00	 	 	100.00 	 	
SQM France S.A.	 	 	100.00	 	 	100.00 	 	
Fertilizantes Naturales S.A. (Spain)	 	 	  50.00	 	 	  50.00 	 	
Rs Agro-Chemical Trading AVV (Aruba)	 	 	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 (USA)	 	 	100.00	 	 	100.00 	 	
Agricolima S.A. De C.V. (Mexico)	 	 	100.00	 	 	100.00 	 	
SQM Venezuela S.A.	 	 	100.00	 	 	100.00 	 	
SQM Italia SRL (Italy)	 	 	  95.00	 	 	95.00 	 	
Comercial Caiman Internacional S.A. (Cayman Islands)	 	 	100.00	 	 	100.00 	 	
Mineag SQM Africa Limited (South Africa)	 	 	100.00	 	 	100.00 	 	
Fertilizantes Olmeca y SQM S.A.de CV (Mexico)	 	 	100.00	 	 	100.00 	 	
Administración y Servicios Santiago	 	 	100.00	 	 	     —	 	
SQM Nitratos Mexico	 	 	  51.00	 	 	     —	 	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 2 – Summary of Significant Accounting Policies (continued)
a)	Basis for the preparation of the consolidated financial statements (continued)	
 	 	 	Direct or indirect ownership	 	
 	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	
 	 	 	%	 	 	%	 	
Domestic subsidiaries:	 	 	 	 	 	 	 	
Servicios Integrales de Tránsitos y Transferencias S.A.	 	 	100.00	 	 	100.00 	 	
Soquimich Comercial S.A.	 	 	60.64	 	 	60.64 	 	
Energía y Servicios S.A.	 	 	—	 	 	100.00 	 	
Isapre Norte Grande Ltda.	 	 	100.00	 	 	100.00 	 	
Almacenes y Depósitos Ltda. 	 	 	100.00	 	 	100.00 	 	
Ajay SQM Chile S.A.	 	 	51.00	 	 	51.00 	 	
SQM Nitratos S.A.	 	 	99.99	 	 	99.99 	 	
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 	 	
Comercial Hydro S.A.	 	 	60.84	 	 	—	 	
All significant inter-company balances, transactions and unrealized gains and losses arising from transactions between these companies have been eliminated in consolidation.
As the Company exerts control over the subsidiary Fertilizantes Naturales S.A. it has been included in the consolidation for the period ended March 31, 2004 and 2003.
At March 31, 2004 and 2003, the subsidiary Lithium Specialties LLP was in the development stage and therefore was not included in the consolidation.
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 2 – Summary of Significant Accounting Policies (continued)
b)	Period 	
 	 	
 	These consolidated financial statements have been prepared as of March 31, 2004 and 2003 and for the years then ended. 	
 	 	
c)	Reporting currency and monetary correction	
 	 	
 	The financial statements of the Company are prepared in U.S. dollars. As a significant portion of the Company’s operations are transacted in U.S. dollars, the U.S. dollar is considered 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 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 year. For this purpose, and in accordance with Chilean regulations, non-monetary assets and liabilities, equity and income statement accounts have been restated in terms of year-end constant pesos based on the change in the consumer price index during the year (-0.5% and 0.5% in 2004 and 2003, 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 non-U.S. dollar denominated monetary assets and liabilities exposed to the effects of inflation.	
 	 	
 	Prior period financial statements presented for comparative purposes have not been restated to reflect the change in the purchasing power of the Chilean pesos during 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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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 2 – Summary of Significant Accounting Policies (continued)
d)	Foreign currency	
 	 	 	
 	 i)	Foreign currency transactions	
 	 	 	
 	 	Monetary assets and liabilities denominated in Chilean pesos and other currencies have been translated to U.S. dollars at the observed exchange rates determined by the Central Bank of Chile in effect at each year-end of Ch$616.41 per US$1 at March 31, 2004 and Ch$731.56 per US$1 at March 31, 2003.	
 	 	 	
 	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 of the Chilean Association of Accountants (“BT 64”) as follows:	
 	 	 	 	
 	 	a)	For those subsidiaries and affiliates located in Chile which keep their accounting records in price-level adjusted Chilean pesos:	
 	 	 	 	 	
 	 	 	-	Balance sheet accounts are translated to U.S. dollars at the year-end exchange rate without eliminating the effects of price-level restatement.	
 	 	 	 	 	
 	 	 	-	Income statement accounts are translated to U.S. dollars at the average exchange rate each month. The monetary correction account on the income statement, which is generated by the inclusion of price-level restatement on the non-monetary assets and liabilities and shareholders’ equity, is translated to U.S. dollars at the average exchange rate for each month.	
 	 	 	 	 	
 	 	 	-	Translation gains and losses, as well as the price-level restatement to the balance sheet mentioned above, are included as an adjustment in shareholders’ equity, in conformity with Circular No. 368 of the SVS.	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 2 – Summary of Significant Accounting Policies (continued)
 	 	b)	The financial statements of those foreign subsidiaries that keep their accounting records in currencies other than the U.S. dollar have been translated at historical exchange rates as follows:	
 	 	 	-	Monetary assets and liabilities are translated at year-end exchange rates between the US dollar and the local currency.	
 	 	 	-	All non-monetary assets and liabilities and shareholders’ equity are translated at historical exchange rates between the US dollar and the local currency.	
 	 	 	-	Income and expense accounts are translated at average exchange rates between the US dollar and the local currency.	
 	 	 	-	Any exchange differences are included in the results of operations for the period.	
 	 	
d)	Foreign currency (continued)	
 	 	
 	Foreign exchange differences for the period ended March 31, 2004 and 2003 generated net earnings (loss) of ThUS$ (566) and ThUS$ 2,377, respectively, which have been charged to the consolidated statements of income in each respective period.	
 	The monetary assets and liabilities of foreign subsidiaries were translated into US dollars at the exchange rates per US dollar prevailing at March 31, as follows:	
 	 	 	 	 	 	 	 	
 	 	 	2004	 	 	2003	 	

Brazilian Real	 	 	2.92	 	 	3.38	 	
New Peruvian Sol	 	 	3.46	 	 	3.09	 	
Argentine Peso	 	 	2.88	 	 	2.98	 	
Japanese Yen	 	 	105.69	 	 	120.20	 	
Euro	 	 	0.82	 	 	0.92	 	
Mexican Peso	 	 	11.21	 	 	10.67	 	
Indonesian Rupee	 	 	8,450.59	 	 	8,940.00	 	
Australian Dollar	 	 	1.31	 	 	1.92	 	
Pound Sterling	 	 	0.58	 	 	0.63	 	
Sudafrican Rand	 	 	6.66	 	 	8.25	 	
 	 	
 	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.	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 2 – Summary of Significant Accounting Policies (continued)
e)	Cash and cash equivalents	
 	 	
 	The Company considers all highly liquid investments with a remaining maturity of less than 90 days as of the closing date of the financial statements to be cash equivalents. 	
 	 	
f)	Time Deposits	
 	 	
 	Time deposits are recorded at cost plus accrued interest.	
 	 	
g)	Marketable securities	
 	 	
 	Marketable securities are recorded at the lower of cost plus accrued interest or market value.	
 	 	
h)	Allowance for doubtful accounts	
 	 	
 	The Company records an allowance for doubtful accounts based on estimated probable losses.	
 	 	
i)	Inventories and materials	
 	 	
 	Inventories of finished products and work in process are valued at average production cost. Raw materials and products acquired from third parties are stated at average cost and materials-in-transit are valued at cost. All such values do not exceed net realizable values.	
 	 	
 	Inventories of non-critical 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 other long-term assets.	
 	 	
j)	Income taxes and deferred income taxes	
 	 	
 	Prior to 2000, income taxes were charged to results in the same period in which the income and expenses were recorded and were calculated in accordance with the enacted tax laws in Chile and the other jurisdictions in which the Company operated. 	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 2 – Summary of Significant Accounting Policies (continued)
j)	Income and deferred taxes (continued)	
 	 	
 	Under Chilean law, the Parent Company and its subsidiaries are required to file separate tax declarations.	
 	Beginning January 1, 2000, the Company records deferred income taxes in accordance with Technical Bulletin Nos. 60, 69, 71 and 73 of the Chilean Association of Accountants, and with Circular No. 1466 issued on January 27, 2000 by the SVS, recognizing the deferred tax effects of temporary differences between the financial and tax values of assets and liabilities, using the liability method. The effect of the temporary differences at March 31, 1999 were recorded in complementary asset and liability accounts, which are recognized in the statement of operations over the estimated period in which they reverse. 	
 	 	
k)	Property, plant and equipment	
 	 	
 	Property, plant, equipment and property rights are recorded at cost, except for certain assets that were restated according to a technical appraisal in 1988. Depreciation expense has been calculated using the straight-line method based upon the estimated useful lives of the assets and is charged directly to expense.	
 	 	
 	Fixed assets acquired through financing lease agreements are accounted for at the present value of the minimum lease payments 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.	
 	 	
 	In conformity with Technical 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.	
 	 	
 	Maintenance costs of plant and equipment are charged to expenses as incurred.	
 	 	
 	The Company obtains property rights and mining concessions from the Chilean state. 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 March, are recorded as prepaid assets to be amortized over the following twelve months. Values attributable to these original mining concessions are recorded in property, plant and equipment and are being amortized on a straight-line basis over 50 years. 	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 2 – Summary of Significant Accounting Policies (continued)
l)	Investments in related companies	
 	 	
 	Investments in related companies over which the Company has significant influence, are included in other assets and are recorded using the equity method of accounting. Accordingly, the Company’s proportional share in the net income or loss of each investee is recognized in the non-operating income and expense classification in the consolidated statements of income on an accrual basis, after eliminating any unrealized profits from transactions with the related companies.	
 	 	
 	The translation adjustment to U.S. dollars of investments in domestic subsidiaries, which maintain their accounting records and are controlled in Chilean pesos is recognized in the other reserves component of stockholders’ equity. Direct and indirect investments in foreign subsidiaries or affiliates are controlled in U.S. dollars. 	
 	 	
m)	Goodwill and negative goodwill	
 	 	
 	Goodwill is calculated as the excess of the purchase price of companies acquired over their net book value, whereas negative goodwill occurs when the net book value exceeds the purchase price of companies acquired. Goodwill and negative goodwill resulting from equity method investments are maintained in the same currency in which the investment was made and are amortized based on the estimated period of investment return, generally 20 and 10 years for goodwill and negative goodwill, respectively.	
 	 	
n)	Intangible assets	
 	 	
 	Intangible assets are stated at cost plus acquisition expenses and are amortized over a period of up to a maximum 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 utilizing the unit of production basis.	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 2 – Summary of Significant Accounting Policies (continued)
p)	Accrued employee severance	
 	 	
 	The Company calculates the liability for staff severance indemnities based on the present value of the accrued benefits for the actual years of service worked assuming an average employee tenure of 24 years and a real annual discount rate of 9%.	
 	 	
q)	Vacations	
 	 	
 	The cost of employee vacations is recognized in the financial statements on an accrual basis.	
 	 	
r) 	Dividends	
 	 	
 	Dividends are generally declared in U.S. dollars but are paid in Chilean pesos.	
 	 	
s)	Derivative Contracts	
 	 	
 	The Company maintains derivative contracts to hedge against movements in foreign currencies, which are recorded in conformity with Technical Bulletin No. 57 of the Chilean Association of Accountants. Such contracts are recorded at fair value with net losses recognized on the accrual basis and gains recognized when realized. 	
 	 	
t)	Reclassifications	
 	 	
 	Certain reclassifications have been made in the 2003 numbers to conform to the current period presentation.	
 	 	
u)	Revenue recognition	
 	 	
 	Revenue is recognized on the date goods are physically delivered or when they are considered delivered according to the terms of the contract. 	
 	 	
v)	Computer software	
 	 	
 	In accordance with Circular No. 981 dated December 28, 1990 of the SVS, computer systems acquired by the Company are recorded at cost.	
 	 	
w)	Research and development expenses	
 	 	
 	Research and development cost are charged to the income statement in the period in which they are incurred. Fixed assets which are acquired for their use in research and development activities and are determined to provide additional benefits to the Company are recorded in property, plant and equipment. 	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 3 – Changes in Accounting Principles
There were no changes in the accounting principles used by the Company during 2004 and 2003.
Note 4 – Marketable Securities
As of March 31 marketable securities are detailed as follows:
 	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	
 	 	 	ThUS$	 	 	ThUS$	 	
 	 	 	 	 	 	 	 	
Mutual funds	 	 	35,229	 	 	56,502	 	
 	 	 		 	 		 	
Total 	 	 	35,229	 	 	56,502	 	
 	 	 		 	 		 	
Mutual funds consist of investments with Citibank in highly liquid funds invested in fixed-rate debt in the United States.
Note 5 – Short-term and long-term Accounts Receivable
a)	Short term and long-term accounts receivable and other accounts receivable as of March 31 are detailed as follows:	
 	 	
 	 	 	 	 	 	Between 90 days	 	 	 	 	 	Total	 	
 	 	 	Up to 90 days	 	 	and 1 year	 	 	2004	 	 	Short-term (net)	 	
 	 	 	2004	 	 	2003	 	 	2004	 	 	2003	 	 	Subtotal	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	
 	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	
Short-term 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Trade accounts receivable	 	 	107,214	 	 	94,266	 	 	14,719	 	 	12,261	 	 	121,933	 	 	121,933	 	 	106,527	 	
Allowance for doubtful accounts	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(6,933	)	 	(5,329	)	
Notes receivable	 	 	23,349	 	 	15,621	 	 	1,138	 	 	1,584	 	 	24,487	 	 	24,487	 	 	17,205	 	
Allowance for doubtful accounts	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(2,854	)	 	(2,187	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 					 	
Accounts receivable, net	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	136,633	 	 	116,216	 	

Other accounts receivable	 	 	10,538	 	 	9,477	 	 	2.148	 	 	1.660	 	 	12,686	 	 	12,686	 	 	11,137	 	
Allowance for doubtful accounts	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(670	)	 	(788	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 					 	
Other accounts receivable, net	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	12,016	 	 	10,349	 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 					 	
Long-term receivables	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	7,135	 	 	8,894	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 					 	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 5 – Short-term and Long-term Accounts Receivable (continued)
Consolidated Short-term and Long-term Receivables – by Geographic Location
 	 	 	 	 	 	Europe, Africa and	 	 	Asia and	 	 	USA, Mexico	 	 	Latin America	 	 	 	 	
 	 	 	Chile	 	 	the Middle East	 	 	Oceania	 	 	and Canada	 	 	and the Caribbean	 	 	Total	 	
 	 	 	2004	 	 	2003	 	 	2004	 	 	2003	 	 	2004	 	 	2003	 	 	2004	 	 	2003	 	 	2004	 	 	2003	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	
 	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	

Net short-term trade
   accounts receivable	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance	 	 	27,186	 	 	16,493	 	 	27,648	 	 	29,721	 	 	3,380	 	 	2,666	 	 	34,095	 	 	31,906	 	 	22,691	 	 	20,412	 	 	115,000	 	 	101,198	 	
% of total	 	 	23.64	%	 	16.30	%	 	24.04	%	 	29.37	%	 	2.94	%	 	2.63	%	 	29.65	%	 	31.53	%	 	19.73	%	 	20.17	%	 	100.00	%	 	100.00	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net short-term notes
   receivable	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance	 	 	17,729	 	 	11,989	 	 	1,170	 	 	676	 	 	46	 	 	4	 	 	526	 	 	741	 	 	2,162	 	 	1,608	 	 	21,633	 	 	15,018	 	
% of total	 	 	81.95	%	 	79.83	%	 	5.41	%	 	4.50	%	 	0.21	%	 	0.03	%	 	2.44	%	 	4.94	%	 	9.99	%	 	10.70	%	 	100.00	%	 	100.00	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net short-term other
   accounts receivable	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance	 	 	4,252	 	 	5,563	 	 	1,170	 	 	805	 	 	19	 	 	65	 	 	6,280	 	 	3,535	 	 	295	 	 	381	 	 	12,016	 	 	10,349	 	
% of total	 	 	35.39	%	 	53.75	%	 	9.73	%	 	7.78	%	 	0.16	%	 	0.63	%	 	52.26	%	 	34.15	%	 	2.46	%	 	3.69	%	 	100.00	%	 	100.00	%	

Subtotal short-term
   accounts receivable, net	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance	 	 	49,167	 	 	34,045	 	 	29,988	 	 	31,202	 	 	3,445	 	 	2,735	 	 	40,901	 	 	36,182	 	 	25,148	 	 	22,401	 	 	148,649	 	 	126,565	 	
% of total	 	 	33.08	%	 	26.90	%	 	20.17	%	 	24.65	%	 	2.32	%	 	2.16	%	 	27.51	%	 	28.59	%	 	16.92	%	 	17.70	%	 	100.00	%	 	100.00	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Long-term accounts receivable, net	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance	 	 	7,048	 	 	7,786	 	 	72	 	 	65	 	 	—	 	 	—	 	 	—	 	 	—	 	 	15	 	 	1,043	 	 	7,135	 	 	8,894	 	
% of total	 	 	98.78	%	 	87.54	%	 	1.01	%	 	0.73	%	 	—	 	 	—	 	 	—	 	 	—	 	 	0.21	%	 	11.73	%	 	100.00	%	 	100.00	%	

Total short and long-term accounts receivable, net	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance	 	 	56,215	 	 	41,831	 	 	30,060	 	 	31,267	 	 	3,445	 	 	2,735	 	 	40,901	 	 	36,182	 	 	25,163	 	 	23,444	 	 	155,784	 	 	135,459	 	
% of total	 	 	36.09	%	 	30.88	%	 	19.30	%	 	23.08	%	 	2.21	%	 	2.02	%	 	26.25	%	 	26.71	%	 	16.15	%	 	17.31	%	 	100.00	%	 	100.00	%	
 	 	 																																				
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 6 – Balances and Transactions with Related Parties
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.
a)	Amounts included in balances with related parties as of March 31, 2004 and 2003 are as follows:	

 	 	 	Short-term	 	 	Long-term	 	
 	 	 	2004	 	 	2003	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	 		 	 		 	
Accounts receivable	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	

Ajay Europe S.A.R.L.	 	 	     2,843	 	 	     6,408	 	 	     —	 	 	     —	 	
Nutrisi Holding N.V. 	 	 	     1,692	 	 	     2,443	 	 	     —	 	 	     —	 	
Generale de Nutrition Vegetale S.A.	 	 	     179	 	 	     169	 	 	     —	 	 	     —	 	
Abu Dhabi Fertilizer Ind. WLL	 	 	     4,060	 	 	     4,602	 	 	     —	 	 	     —	 	
NU3 N.V.	 	 	     36	 	 	     2,913	 	 	     —	 	 	     —	 	
Doktor Tarsa –SQM Turkey	 	 	     3,539	 	 	     360	 	 	     —	 	 	     —	 	
Yara North America	 	 	     358	 	 	     —	 	 	     —	 	 	     —	 	
Yara España	 	 	     1,196	 	 	     —	 	 	     —	 	 	     —	 	
SQM Lithium Specialties Limited	 	 	     1,566	 	 	     1,486	 	 	     —	 	 	     —	 	
Empresas Melón S.A. 	 	 	     —	 	 	     —	 	 	     340	 	 	     424	 	
Sales de Magnesio S.A. 	 	 	     74	 	 	     17	 	 	     —	 	 	     —	 	
Ajay North America LLC	 	 	     259	 	 	     243	 	 	     —	 	 	     —	 	
Norsk Hydro ASA	 	 	     —	 	 	     30	 	 	     —	 	 	     —	 	
Yara Int.-France	 	 	     —	 	 	     883	 	 	     —	 	 	     —	 	
Yara International Asia Trade Pte Ltd.	 	 	     1,087	 	 	     711	 	 	     —	 	 	     —	 	
Yara France S.A.	 	 	     2,218	 	 	     1,258	 	 	     —	 	 	     —	 	
Yara Poland SP	 	 	     295	 	 	     246	 	 	     —	 	 	     —	 	
Yara Benelux B.V	 	 	     1,731	 	 	     899	 	 	     —	 	 	     —	 	
Yara Hellas S.A.	 	 	     197	 	 	     112	 	 	     —	 	 	     —	 	
Yara Australia Ltd.	 	 	     773	 	 	     203	 	 	     —	 	 	     —	 	
Yara UK Ltd.	 	 	     327	 	 	     206	 	 	     —	 	 	     —	 	
Yara GMBH & CO KG	 	 	     282	 	 	     200	 	 	     —	 	 	     —	 	
Yara AB	 	 	     186	 	 	     63	 	 	     —	 	 	     —	 	
Yara Colombia	 	 	     2,060	 	 	     1,037	 	 	     —	 	 	     —	 	
Yara Venezuela	 	 	     —	 	 	     517	 	 	     —	 	 	     —	 	
Yara Europe	 	 	     —	 	 	     12	 	 	 	 	 	 	 	
Nutrichem Benelux	 	 	     —	 	 	     28	 	 	 	 	 	 	 	
Yara Agri CZECH Republic S.R.O.	 	 	     6	 	 	     —	 	 	 	 	 	 	 	
Hydro Agricola Internacional	 	 	     4	 	 	     —	 	 	 	 	 	 	 	
Rotem Amfert Negev LTD.	 	 	     —	 	 	     22	 	 	 	 	 	 	 	
NU3 B.V.	 	 	     984	 	 	     804	 	 	     —	 	 	     —	 	
Yara Argentina	 	 	     36	 	 	     91	 	 	     —	 	 	     —	 	
Adubo Trevo S.A.	 	 	     75	 	 	     1,401	 	 	     —	 	 	     —	 	
SQM China	 	 	     —	 	 	     75	 	 	     —	 	 	     —	 	
Yara Planta Nutr. Oslo	 	 	     —	 	 	     92	 	 	 	 	 	 	 	
Impronta SRL	 	 	     5,047	 	 	     4,337	 	 	     —	 	 	 	 	
 	 	 		 	 		 	 		 	 		 	
Total	 	 	     31,110	 	 	     31,868	 	 	     340	 	 	     424	 	
 	 	 		 	 		 	 		 	 		 	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 6 – Balances and Transactions with Related Parties (continued)
a)      Amounts included in balances with related parties as of March 31, 2004 and 2003, continued:
 	 	 	Short-term	 	
 	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	
Accounts payable	 	 	ThUS$	 	 	ThUS$	 	

Ajay Europe S.A.R.L.	 	 	—	 	 	966	 	
Abu Dhabi Fertilizer Ind. WLL	 	 	—	 	 	90	 	
NU3 N.V.	 	 	—	 	 	1,233	 	
Rotem Amfert Negev Limited	 	 	1,482	 	 	1,372	 	
Yara Porsgrunn	 	 	164	 	 	7	 	
Hydro Fertilizantes Ltda.	 	 	1,089	 	 	1,380	 	
Hydro Agrícola internacional	 	 	—	 	 	1	 	
Yara North America	 	 	—	 	 	122	 	
Yara México S.A de C.V.	 	 	5	 	 	10	 	
Yara Int – France	 	 	4,966	 	 	454	 	
Yara France	 	 	—	 	 	7	 	
NU3 B.V.	 	 	—	 	 	224	 	
Adm. y servicios Santiago S.A. de C.V.	 	 	—	 	 	104	 	
Norsk Hydro ASA	 	 	1	 	 	—	 	
PCS Yumbes SCM	 	 	7,028	 	 	6,399	 	
 	 	 		 	 		 	
Total	 	 	14,735	 	 	12,369	 	
 	 	 		 	 		 	
There were no outstanding long-term accounts payable with related parties as of March 31, 2004 and 2003
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 6 – Balances and Transactions with Related Parties (continued)
b)	During 2004 and 2003, principal transactions with related parties were as follows:	
 	 	
 	 	 	 	 	 	 	 	 	Amount of	 	 	Impact on income	 	
Company	 	 	Relationship	 	 	Type of transaction	 	 	Transaction	 	 	(charge) credit	 	
	 	 		 	 		 	 		 	 		 	
 	 	 	 	 	 	 	 	 	2004	 	 	2003	 	 	2004	 	 	2003	 	
 	 	 	 	 	 	 	 	 		 	 		 	 		 	 		 	
 	 	 	 	 	 	 	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
NU3 N.V. (Belgica)	 	 	     Indirect	 	 	Sales of products	 	 	     1,575	 	 	     980	 	 	     478	 	 	     297	 	
Doktor Tarsa	 	 	     Indirect	 	 	Sales of products	 	 	     1,299	 	 	     366	 	 	     301	 	 	     115	 	
Abu Dhabi Fertilizer WLL 	 	 	     Indirect	 	 	Sales of products	 	 	     244	 	 	     1,068	 	 	     14	 	 	     203	 	
Ajay Europe S.A.R.L.	 	 	     Indirect	 	 	Sales of products	 	 	     835	 	 	     2,232	 	 	     363	 	 	     637	 	
NU3 B.V.	 	 	     Indirect	 	 	Sales of products	 	 	     1,290	 	 	     1,084	 	 	     606	 	 	     291	 	
Adubo Trevo S.A.	 	 	     Indirect	 	 	Sales of products	 	 	     2,290	 	 	     863	 	 	     660	 	 	     301	 	
PCS Yumbes SCM	 	 	     Indirect	 	 	Sales of products	 	 	     3,427	 	 	     133	 	 	     2,057	 	 	     68	 	
 	 	 	 	 	 	Purchases of products	 	 	     9,383	 	 	     4,307	 	 	     —	 	 	     1,182	 	
Ajay North America LLC	 	 	     Indirect	 	 	Sales of products	 	 	     2,371	 	 	     —	 	 	     1,038	 	 	     —	 	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 6 – Balances and Transactions with Related Parties (continued)
Hydro Agri Internacional 	 	 	     Shareholder	 	 	     Sales of products	 	 	     1,015	 	 	     —	 	 	     45	 	 	     —	 	
Yara UK Ltd.	 	 	     Shareholder	 	 	     Sales of products	 	 	     323	 	 	     227	 	 	     104	 	 	     53	 	
Yara International Asia Trade PTE Ltd.	 	 	     Shareholder	 	 	     Sales of products	 	 	     1,804	 	 	     1,479	 	 	     422	 	 	     348	 	
Yara France S.A.	 	 	     Shareholder	 	 	     Sales of products	 	 	     2,412	 	 	     1,568	 	 	     552	 	 	     391	 	
Yara Benelux B.V.	 	 	     Shareholder	 	 	     Sales of products	 	 	     2,314	 	 	     1,905	 	 	     548	 	 	     365	 	
Yara AB Sweden	 	 	     Shareholder	 	 	     Sales of products	 	 	     270	 	 	     263	 	 	     87	 	 	     80	 	
Yara Australia Ltd.	 	 	     Shareholder	 	 	     Sales of products	 	 	     323	 	 	     247	 	 	     82	 	 	     62	 	
Yara España S.A.	 	 	     Shareholder	 	 	     Sales of products	 	 	     958	 	 	     735	 	 	     182	 	 	     177	 	
Yara Colombia Ltda.	 	 	     Shareholder	 	 	     Sales of products	 	 	     1,095	 	 	     833	 	 	     222	 	 	     197	 	
Yara Planta Nutri Poland	 	 	     Shareholder	 	 	     Sales of products	 	 	     307	 	 	     —	 	 	     80	 	 	     —	 	
Yara GMBH & Co Kg	 	 	     Shareholder	 	 	     Sales of products	 	 	     371	 	 	     252	 	 	     100	 	 	     72	 	
Note 7 – Inventories
Net inventories are summarized as follows:
 	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	
 	 	 	ThUS$	 	 	ThUS$	 	
 	 	 	 	 	 	 	 	
Finished products	 	 	141,706	 	 	120,224	 	
Work in process 	 	 	101,526	 	 	94,776	 	
Supplies	 	 	10,242	 	 	12,435	 	
 	 	 		 	 		 	
     Total	 	 	253,474	 	 	227,435	 	
 	 	 		 	 		 	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 8 – Property, Plant and Equipment 
Property, plant and equipment are summarized as follows:
 	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	
 	 	 	ThUS$	 	 	ThUS$	 	
Land	 	 	 	 	 	 	 	
Land	 	 	20,003	 	 	13,452	 	
Mining Concessions	 	 	42,237	 	 	36,373	 	
 	 	 		 	 		 	
 	 	 	62,240	 	 	49,825	 	

Buildings and infrastructure	 	 	 	 	 	 	 	
Buildings	 	 	150,229	 	 	156,890	 	
Installations	 	 	309,181	 	 	281,393	 	
Construction-in-progress	 	 	27,375	 	 	40,744	 	
Other	 	 	4,560	 	 	915	 	
 	 	 		 	 		 	
 	 	 	491,345	 	 	479,942	 	

Machinery and Equipment	 	 	 	 	 	 	 	
Machinery	 	 	394,750	 	 	385,509	 	
Equipment	 	 	106,692	 	 	100,895	 	
Project-in-progress	 	 	11,279	 	 	14,523	 	
Other	 	 	18,349	 	 	14,431	 	
 	 	 		 	 		 	
 	 	 	531,070	 	 	515,358	 	

Other fixed assets	 	 	 	 	 	 	 	
Tools	 	 	7,633	 	 	8,287	 	
Furniture and office equipment	 	 	13,953	 	 	18,444	 	
Project-in-progress	 	 	13,366	 	 	17,280	 	
Other	 	 	7,259	 	 	630	 	
 	 	 		 	 		 	
 	 	 	42,211	 	 	44,641	 	
 	 	 		 	 		 	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 8 – Property, Plant and Equipment (continued)
 	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	
 	 	 	ThUS$	 	 	ThUS$	 	
Amounts relating to technical revaluation of fixed assets	 	 	 	 	 	 	 	
Land	 	 	8,651	 	 	8,651 	 	
Buildings and infrastructure	 	 	40,627	 	 	40,610 	 	
Machinery and equipment	 	 	12,091	 	 	12,127 	 	
Other assets	 	 	53	 	 	53 	 	
 	 	 		 	 		 	
 	 	 	61,422	 	 	61,441 	 	
 	 	 		 	 		 	
     Total property, plant and equipment	 	 	1,188,288	 	 	1,151,207 	 	

Less: Accumulated depreciation	 	 	 	 	 	 	 	
Buildings and infrastructure	 	 	(192,067	)	 	(166,624	)	
Machinery and equipment	 	 	(275,710	)	 	(248,814	)	
Other fixed assets	 	 	(27,212	)	 	(24,970	)	
Technical appraisal	 	 	(33,375	)	 	(31,765	)	
 	 	 		 	 		 	
     Total accumulated depreciation	 	 	(528,364	)	 	(472,173	)	
 	 	 		 	 		 	
          Net property, plant and equipment 	 	 	659,924	 	 	679,034 	 	

 	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	
Depreciation for the year ended March 31:	 	 	ThUS$	 	 	ThUS$	 	
 	 	 	 	 	 	 	 	
Buildings and infrastructure	 	 	(6,512	)	 	(6,131	)	
Machinery and equipment	 	 	(7,575	)	 	(7,811	)	
Other fixed assets	 	 	(392	)	 	(374	)	
Technical revaluation	 	 	(323	)	 	(436	)	
 	 	 		 	 		 	
Total depreciation 	 	 	(14,802	)	 	(14,752	)	
 	 	 		 	 		 	
The Company has capitalized assets obtained through leasing, which are included in other fixed assets and are as follows:
 	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	
 	 	 	ThUS$	 	 	ThUS$	 	
 	 	 	 	 	 	 	 	
Administrative office buildings 	 	 	2,086	 	 	2,081	 	
Accumulated depreciation	 	 	(428	)	 	(387	)	
 	 	 		 	 		 	
Total assets in leasing	 	 	1,658	 	 	1,694	 	
 	 	 		 	 		 	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 9 – Investments in and Receivables from Related Parties
a)	Information on foreign investments	
There are no plans for the foreign investments to pay dividends, as it is the Company’s policy to reinvest those earnings. 
The Company has not designated their foreign investments as net investment hedges.
b)	Empresas Melón S.A.	
The financial statements of Empresas Melón S.A. were audited by Deloitte & Touche.
c) 	Transactions executed in 2004	
In January 2004, the subsidiary Soquimich European Holdings B.V. made a capital contribution of ThUS$ 475 on its affiliate Misr Specialty Fertilizers.
At the meeting of the shareholders of Empresas Melón S.A. held on February 25, 2004, the shareholders agreed its spin-off in 2 companies, Empresas Melón S.A. and Inmobiliaria San Patricio S.A. As a result, SQM S.A. maintained its ownership of 14.05% in Empresas Melón S.A. and a same ownership percentage was assigned to this entity in the new company..
d)	Transactions executed in 2003	
On January 27, 2003, SQM Comercial de México S.A. de C.V. and SQM Nitratos S.A. acquired 8,750 shares of the related company Fertilizantes Olmeca y SQM S.A. de C.V. which represented 50% of its share capital. Consequently, Fertilizantes Olmeca y SQM S.A. de C.V. became a subsidiary of SQM S.A. This transaction generated goodwill of ThUS$279.
Subsequently, SQM Nitratos S.A. acquired from SQM Comercial de México S.A. de C.V. 8,749 shares in Fertilizantes Olmeca y SQM S.A. de C.V. This transaction did not produce goodwill.
On January 31, 2003, SQM S.A. acquired shares owned by SQM Nitratos S.A. in Sociedad Contractual Minera Antucoya for an amount of ThUS$ 100. This united all the shares of SCM Antucoya in one shareholder and consequently SCM Antucoya was liquidated and SQM S.A. assumed of all this company’s assets and liabilities.
On March 30, 2003, Fertilizantes Olmeca y SQM S.A. de C.V. increased its capital by ThUS$2,000 through the issuance of 165,500 shares, which were subscribed in full by SQM Nitratos S.A. As a result, SQM Nitratos S.A. had an ownership interest of 78.29% and SQM Comercial de Mexico had an ownership interest of 21.71%.
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
On March 30, 2003, Soquimich European Holding acquired 50% of the ownership interest of Mineag SQM Africa Ltd. from Ravlin Investment Limited for an amount of ThUS$990.  Consequently, Mineag SQM Africa Ltd. became a subsidiary of SQM S.A. This transaction did not produce goodwill.
Note 9 – Investments in and Receivables from Related Parties (continued)
d)	Subsidiaries in the development stage	
At March 31, 2004 and 2003, the subsidiary SQM Lithium Specialties was in the development stage and therefore was not included in the consolidation.
The equity value of these investments is included in investments in related companies and the proportional share of the accumulated deficit during the development stage is included in a separate reserve within equity.
Balances in these subsidiaries are summarized as follows:
 	 	 	SQM Lithium Specialties Limited	 	
 	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	
 	 	 	ThUS$	 	 	ThUS$	 	
 	 	 	 	 	 	 	 	
Current assets	 	 	386	 	 	1,769	 	
Fixed assets	 	 	26,421	 	 	24,503	 	
Other assets	 	 	714	 	 	868	 	
 	 	 		 	 		 	
Total assets	 	 	27,521	 	 	27,140	 	

Current liabilities	 	 	1,681	 	 	2.328	 	
Shareholders’ equity	 	 	25,840	 	 	24,812	 	
 	 	 		 	 		 	
Total liabilities and shareholders’ equity	 	 	27,521	 	 	27,140	 	
 	 	 		 	 		 	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 9 – Investments in and Receivables from Related Companies (continued)
e)	Detail of investments in related companies 	

Tax 
Registration
Number	 	 Company	 	Country of
origin	 	 	Controlling
currency	 	Number of
shares	 	Ownership interest	 	Equity of companies	 	Book value of investment	 	Net income 
(loss) 	 	Equity 
participation 
in net income
(loss)	
												 		 		 		 		
											2004	 	 	2003	 	2004	 	 	2003	 	2004	 	 	2003	 	2004	 	 	2003	 	2004	 	 	2003	
 	 	 	 	 	 	 	 	 	 	 		 	 		 		 	 		 		 	 		 		 	 		 		 	 		
 	 	 	 	 	 	 	 	 	 	 	%	 	 	%	 	ThUS$	 	 	ThUS$	 	ThUS$	 	 	ThUS$	 	ThUS$	 	 	ThUS$	 	ThUS$	 	 	ThUS$	
	
93390000-2	 	Empresas Melón S.A.	 	     Chile	 	 	     —	 	     653,748,837	 	     14.05 	 	 	     14.05 	 	     288,805	 	 	     267,085	 	     40,577	 	 	     37,525	 	     13,582	 	 	     9,599	 	     1,908	 	 	     1,349	
0-E	 	SQM Lithium Specialties Limited*	 	     USA	 	 	     US$	 	     —	 	     100.00 	 	 	     100.00 	 	     25,840	 	 	     24,813	 	     25,840	 	 	     24,813	 	     (864	)	 	     (1,099	)	     —	 	 	     —	
0-E	 	Ajay North America LLC	 	     USA	 	 	     US$	 	     —	 	     49.00 	 	 	     49.00 	 	     11,042	 	 	     13,881	 	     5,411	 	 	     6,802	 	     (124	)	 	      549	 	     (61	)	 	     269	
0-E	 	Abu Dhabi Fertilizer 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Industries WLL	 	     UAE	 	 	     US$	 	     1,961	 	     37.00	 	 	     37.00 	 	     3,264	 	 	     3,136	 	     1,208	 	 	     1,160	 	     121	 	 	     —	 	     45	 	 	     —	
0-E	 	Nutrisi Holding N.V.	 	     Belgium	 	 	     US$	 	     —	 	     50.00	 	 	     50.00 	 	     4,068	 	 	     1,820	 	     2,034	 	 	     910	 	     946	 	 	     654	 	     473	 	 	     327	
0-E	 	Doktor Tarsa	 	     Turkey	 	 	     Euros	 	     —	 	     50.00	 	 	     50.00 	 	     2,373	 	 	     440	 	     1,186	 	 	     220	 	     577	 	 	     12	 	     289	 	 	     6	
0-E	 	Misr Speciality Fertilizers	 	     Egipto	 	 	     US$	 	     —	 	     25.00	 	 	     —	 	     4,604	 	 	     —	 	     1,151	 	 	     —	 	     —	 	 	     —	 	     —	 	 	     —	
0-E	 	Ajay Europe S.A.R.L.	 	     France	 	 	     US$	 	     36,700	 	     50.00	 	 	     50.00 	 	     4,120	 	 	     650	 	     2,060	 	 	     325	 	     —	 	 	     —	 	     —	 	 	     —	
77557430-5	 	Sales de Magnesio Ltda.	 	     Chile	 	 	     —	 	     —	 	     50.00	 	 	     50.00 	 	     394	 	 	     216	 	     197	 	 	     108	 	     44	 	 	     24	 	     22	 	 	     12	
81767200-0	 	Asoc. Garantizadora Pensiones	 	     Chile	 	 	     —	 	     —	 	     3.00	 	 	     3.00 	 	     755	 	 	     696	 	     25	 	 	     23	 	     —	 	 	     —	 	     —	 	 	     —	
O-E	 	Rui Xin Packaging 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Materials Sanhe Co.Ltd	 	     China	 	 	     US$	 	     —	 	     25.00	 	 	     25.00 	 	     482	 	 	     480	 	     121	 	 	     120	 	     —	 	 	     —	 	     —	 	 	     —	
O-E	 	Impronta SRL	 	     Italia 	 	 	     Euros	 	     —	 	     50.00	 	 	     50.00 	 	     882	 	 	     582	 	     441	 	 	     291	 	     278	 	 	     794	 	     139	 	 	     397	
99551480-K	 	Inmobiliaria San Patricio S.A.	 	     Chile	 	 	     —	 	     —	 	     14.05	 	 	     —	 	     19,960	 	 	     —	 	     2,804	 	 	     —	 	     (88	)	 	     —	 	     (12	)	 	     —	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 		 	 	 	 	 	 	 	 	 	 	
Total	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	     83,055	 	 	     72,297	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 		 	 	 	 	 	 	 	 	 	 	
•	In development stage	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 10 – Goodwill and Negative Goodwill
Goodwill and negative goodwill and the related amortization is summarized as follows:
 	 	a) 	Goodwill	
 	 	 	 	 	 	March 31, 2004	 	 	March 31, 2003	 	
Tax Registration
Number	 	 	 Company	 	Amount amortized
during the period	 	Goodwill
balance	 	Amount amortized
during the period	 	Goodwill
balance	 	
	 	 											
 	 	 	 	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	
0-E	 	 	Doktor Tarsa	 	 	     18	 	 	     77	 	 	     16	 	 	     134	 	
79768170-9	 	 	Soquimich Comercial S.A.	 	 	     37	 	 	     235	 	 	     38	 	 	     385	 	
93390000-2	 	 	Empresas Melón S.A.	 	 	     143	 	 	     8,038	 	 	     119	 	 	     7,250	 	
79626800-K	 	 	SQM Salar S.A.	 	 	     11	 	 	     72	 	 	     11	 	 	     115	 	
0-E	 	 	SQM México S.A. de C.V.	 	 	     14	 	 	     989	 	 	     14	 	 	     1,045	 	
96866750-4	 	 	SQM Potassium	 	 	     36	 	 	     1,843	 	 	     36	 	 	     1,987	 	
0-E	 	 	Comercial Caiman Internacional S.A.	 	 	     6	 	 	     194	 	 	     6	 	 	     217	 	
0-E	 	 	Fertilizantes Olmeca	 	 	     14	 	 	     209	 	 	     —	 	 	     —	 	
0-E	 	 	PTM SQM Iberica S.A.	 	 	     —	 	 	     —	 	 	     5	 	 	     75	 	
0-E	 	 	Mineag SQM Africa Limited	 	 	     —	 	 	     —	 	 	     —	 	 	     705	 	
96801610-5	 	 	Comercial Hydro S.A.	 	 	     58	 	 	     1,225	 	 	     —	 	 	     279	 	
 	 	 	 	 	 		 	 		 	 		 	 		 	
Total	 	 	 	 	 	     337	 	 	     12,882	 	 	     245	 	 	     12,192	 	
 	 	 	 	 	 		 	 		 	 		 	 		 	
b)     Negative Goodwill	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	     March 31, 2004	 	 	     March 31, 2003	 	
 Tax Registration
Number	 	 	       Company	 	 	Amount amortized
during the period	 	Negative
goodwill
balance	 	Amount amortized
during the period	 	Negative
goodwill
balance	 	

 	 	 	 	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	
79626800-K	 	 	     SQM Salar S.A.	 	 	     —	 	 	     —	 	 	     52	 	 	     123	 	
96575300-1	 	 	     Minera Mapocho S.A.	 	 	     51	 	 	     423	 	 	     51	 	 	     627	 	
 	 	 	 	 	 		 	 		 	 		 	 		 	
Total	 	 	 	 	 	     51	 	 	     423	 	 	     103	 	 	     750	 	
 	 	 	 	 	 		 	 		 	 		 	 		 	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 11 – Other Long-term Assets
Other long-term assets are summarized as follows:
 	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	
 	 	 	ThUS$	 	 	ThUS$	 	
 	 	 	 	 	 	 	 	
Engine and equipment spare-parts, net	 	 	23,544	 	 	23,472	 	
Mine development costs 	 	 	18,471	 	 	18,013	 	
Pension plan	 	 	1,137	 	 	1,223	 	
Construction of Salar-Baquedano road	 	 	1,740	 	 	1,860	 	
Deferred loan issuance costs	 	 	1,932	 	 	3,569	 	
Other	 	 	1,941	 	 	1,176	 	
 	 	 		 	 		 	
     Total	 	 	48,765	 	 	49,313	 	
 	 	 		 	 		 	
Note 12 – Bank Debt
a)	Short-term bank debt is detailed as follows:	
 	 	
 	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	
Bank or financial institution	 	 	ThUS$	 	 	ThUS$	 	
 	 	 	 	 	 	 	 	
SCH Overseas Bank	 	 	40,000	 	 	—	 	
Scotiabank	 	 	13,025	 	 	—	 	
Citibank	 	 	12,070	 	 	—	 	
Other banks	 	 	1,755	 	 	2,280	 	
 	 	 		 	 		 	
     Total	 	 	66,850	 	 	2,280	 	

Annual average interest rate	 	 	1.44	%	 	3.29	%	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 12 – Bank Debt (continued)
b) 	Long-term bank debt is detailed as follows:	
 	 	
 	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	
Bank or financial institution	 	 	ThUS$	 	 	ThUS$	 	
 	 	 	 	 	 	 	 	
Union Bank of Switzerland (1)	 	 	200,685	 	 	200,648 	 	
Royal Bank of Canada (2)	 	 	60,356	 	 	60,380 	 	
Bank of America (3)	 	 	—	 	 	80,723 	 	
 	 	 		 	 		 	
     Total	 	 	261,041	 	 	341,751	 	

Less: Current portion	 	 	(1,041	)	 	(17,751	)	

     Long-term portion	 	 	260,000	 	 	324,000 	 	

 	(1)	U.S. dollar-denominated loan without guarantee, interest rate of 7.7% per annum, paid semi-annually. The principal is due on September 15, 2006.	
 	(2)	U.S. dollar-denominated loan without guarantee, interest rate of 2.23% per annum, paid semi-annually. The principal is divided into two equal partial installments, beginning in November 2005 with the final installment in November 2006	
 	(3)	U.S. dollar-denominated loan without guarantee, repaid in full on November 28, 2003	
 	 	
c)	The maturity of long-term debt is as follows:	
 	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	
 	 	 	ThUS$	 	 	ThUS$	 	
Years to maturity	 	 	 	 	 	 	 	
Current portion	 	 	1,041	 	 	17,751	 	
1 to 2 years	 	 	—	 	 	32,000	 	
2 to 3 years	 	 	260,000	 	 	62,000	 	
4 to 5 years	 	 	—	 	 	230,000	 	
 	 	 		 	 		 	
     Total	 	 	261,041	 	 	341,751	 	
 	 	 		 	 		 	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 13 – Accrued Liabilities 
As of March 31, 2004 and 2003, accrued liabilities are summarized as follows:
 	 	 	 	 	 	 	 	
 	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	
 	 	 	ThUS$	 	 	ThUS$	 	
 	 	 	 	 	 	 	 	
Provision for royalties	 	 	958	 	 	895	 	
Quarterly bonus	 	 	452	 	 	815	 	
Provision for employee compensation and legal costs	 	 	1,701	 	 	800	 	
Taxes and monthly income tax installment payments	 	 	746	 	 	460	 	
Vacation accrual	 	 	5,515	 	 	3,960	 	
Accrued employee benefits	 	 	1,717	 	 	228	 	
Marketing Expenses	 	 	1,225	 	 	600	 	
Other accruals	 	 	1,729	 	 	2,285	 	
 	 	 		 	 		 	
     Total current liabilities	 	 	14,043	 	 	10,043	 	
 	 	 		 	 		 	
Note 14 – Income and Deferred Taxes
a)	At March 31, 2004 and 2003 the Company has the following consolidated balances for retained tax earnings, income not subject to taxes, tax loss carry-forwards and credit for shareholders:	
 	 	
 	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	
 	 	 	ThUS$	 	 	ThUS$	 	
 	 	 	 	 	 	 	 	
Accumulated tax basis retained earnings	 	 	 	 	 	 	 	
with tax credit	 	 	33,185	 	 	17,479	 	
Tax loss carry-forwards (1)	 	 	45,748	 	 	104,634	 	
Credit for shareholders	 	 	6,115	 	 	371	 	
 	 	
(1)	Income tax losses in Chile can be carried forward indefinitely.	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 14 – Income and Deferred Taxes (continued)
The deferred taxes as of March 31, 2004 and 2003 represented a net liability of ThUS$ 32,790 and ThUS$ 17,661, respectively, and consisted of:
2004	 	 	Deferred tax asset	 	 	Deferred tax liability	 	
 	 	 	Short-term	 	 	Long-term	 	 	Short-term	 	 	Long-term	 	
 	 	 		 	 		 	 		 	 		 	
 	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	
Temporary differences	 	 	 	 	 	 	 	 	 	 	 	 	 	
Allowance for doubtful accounts	 	 	1,236	 	 	559	 	 	—	 	 	—	 	
Vacation accrual	 	 	901	 	 	—	 	 	—	 	 	—	 	
Unrealized gain on sale of products	 	 	5,778	 	 	—	 	 	—	 	 	—	 	
Provision for obsolescence 	 	 	—	 	 	3,164	 	 	—	 	 	—	 	
Production expenses	 	 	—	 	 	—	 	 	18,650	 	 	—	 	
Accelerated depreciation	 	 	—	 	 	—	 	 	—	 	 	59,241	 	
Exploration expenses	 	 	—	 	 	—	 	 	—	 	 	4,361	 	
Capitalized interest	 	 	—	 	 	—	 	 	—	 	 	6,090	 	
Staff severance indemnities	 	 	—	 	 	—	 	 	—	 	 	1,940	 	
Accrued expenses	 	 	—	 	 	—	 	 	—	 	 	425	 	
Capitalized expenses	 	 	—	 	 	—	 	 	—	 	 	554	 	
Tax loss carry-forwards	 	 	119	 	 	12,595	 	 	—	 	 	—	 	
Losses from derivative transactions 	 	 	—	 	 	—	 	 	309	 	 	—	 	
Accrued interest	 	 	66	 	 	—	 	 	—	 	 	—	 	
Other	 	 	1,072	 	 	477	 	 	43	 	 	163	 	
	 	
Total gross deferred taxes	 	 	9,172	 	 	16,795	 	 	19,002	 	 	72,774	 	
Total complementary accounts 	 	 	—	 	 	(1,233	)	 	(3,407	)	 	(31,384	)	
Valuation allowance	 	 	—	 	 	(539	)	 	—	 	 	—	 	
	 	
Total deferred taxes	 	 	9,172	 	 	15,023	 	 	15,595	 	 	41,390	 	
	 	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 14 – Income and Deferred Taxes (continued)
2003	 	 	Deferred tax asset	 	 	Deferred tax liability	 	
 	 	 	Short-term	 	 	Long-term	 	 	Short-term	 	 	Long-term	 	
 	 	 		 	 		 	 		 	 		 	
 	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	
Temporary differences	 	 	 	 	 	 	 	 	 	 	 	 	 	
Allowance for doubtful accounts	 	 	967	 	 	201	 	 	—	 	 	—	 	
Vacation accrual	 	 	700	 	 	—	 	 	—	 	 	—	 	
Unrealized gain on sale of products	 	 	4,790	 	 	—	 	 	—	 	 	—	 	
Provision for obsolescence 	 	 	—	 	 	1,861	 	 	—	 	 	—	 	
Production expenses	 	 	—	 	 	—	 	 	14,163	 	 	—	 	
Accelerated depreciation	 	 	—	 	 	—	 	 	—	 	 	59,438	 	
Exploration expenses	 	 	—	 	 	—	 	 	—	 	 	4,024	 	
Capitalized interest	 	 	—	 	 	—	 	 	—	 	 	6,450	 	
Staff severance indemnities	 	 	—	 	 	—	 	 	—	 	 	1,701	 	
Accrued expenses	 	 	—	 	 	—	 	 	—	 	 	426	 	
Capitalized expenses	 	 	—	 	 	—	 	 	—	 	 	774	 	
Tax loss carry-forwards	 	 	—	 	 	19,876	 	 	—	 	 	—	 	
Losses from derivative transactions 	 	 	—	 	 	—	 	 	19	 	 	—	 	
Other	 	 	479	 	 	788	 	 	1	 	 	229	 	
	 	
Total gross deferred taxes	 	 	6,936	 	 	22,726	 	 	14,183	 	 	73,042	 	
Total complementary accounts 	 	 	(2	)	 	(719	)	 	(4,958	)	 	(35,727	)	
Valuation allowance	 	 	—	 	 	(62	)	 	—	 	 	—	 	
	 	
Total deferred taxes	 	 	6,934	 	 	21,945	 	 	9,225	 	 	37,315	 	
	 	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 14 – Income and Deferred Taxes (continued)
c)	Income tax expense is summarized as follows: 	
 	 	
 	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	
 	 	 	ThUS$	 	 	ThUS$	 	
 	 	 	 	 	 	 	 	
Provision for current income tax 	 	 	(869	)	 	(1,583	)	
Effect of deferred tax assets and liabilities	 	 	(2,030	)	 	(1,614	)	
Effect of amortization of complementary accounts	 	 	(1,532	)	 	( 728	)	
Other tax charges and credits	 	 	30	 	 	62 	 	
 	 	 		 	 		 	
     Total income tax expense	 	 	(4,401	)	 	(3,863	)	
 	 	 		 	 		 	
Note 15 – Staff Severance Indemnities
Staff severance indemnities are summarized as follows:
 	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	
 	 	 	ThUS$	 	 	ThUS$	 	
 	 	 	 	 	 	 	 	
Opening balance	 	 	10,127	 	 	9,143 	 	
Increases in obligation	 	 	882	 	 	1,193 	 	
Payments	 	 	(771	)	 	(1,267	)	
Exchange difference	 	 	(324	)	 	(126	)	
 	 	 		 	 		 	
Balance as of March 31	 	 	9,914	 	 	8,943 	 	
 	 	 		 	 		 	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 16 – Minority Interest
Minority interest is summarized as follows:
 	 	 	Equity	 	 	Net Income/(Loss)	 	
 	 	 	2004	 	 	2003	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	 		 	 		 	
 	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Soquimich Comercial S.A.	 	 	25,167	 	 	19,433 	 	 	(601	)	 	(169	)	
Ajay SQM Chile S.A.	 	 	3,248	 	 	3,103 	 	 	(96	)	 	(93	)	
Cape Fear Bulk LLC	 	 	148	 	 	133 	 	 	(48	)	 	(29	) 	
Fertilizantes Naturales S.A.	 	 	291	 	 	242 	 	 	(27	)	 	(14	)	
SQM Nitratos México S.A. de C.V.	 	 	(58	)	 	—	 	 	(25	)	 	—	 	
SQM Italia S.R.L	 	 	19	 	 	13 	 	 	2	 	 	5 	 	
Mineag SQM Africa Ltda.	 	 	—	 	 	—	 	 	—	 	 	(206	)	
 	 	 		 	 		 	 		 	 		 	
     Total	 	 	28,815	 	 	22,924 	 	 	(795	)	 	(506	)	
 	 	 		 	 		 	 		 	 		 	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 17 – Shareholders’ Equity
a)	Changes to shareholders’ equity consisted of:	
 	 	
 	 	 	 	 	 	 	 	 	 	 	 	Accumulated deficit	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	of subsidiaries in	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	Paid-in	 	 	Other	 	 	development	 	 	Retained 	 	 	Net	 	 	 	 	
 	 	 	Number	 	 	capital	 	 	reserves	 	 	stage 	 	 	earnings	 	 	income	 	 	Total	 	
 	 	 	of shares	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$ 	 	 	ThUS$	 	 	ThUS$	 	 	ThUS$	 	
	 	
Balance as of January 1, 2003	 	 	     263,196,524 	 	 	     477,386 	 	 	     125,111 	 	 	     (3,661	)	 	     210,624 	 	 	     40,202 	 	 	     849,662 	 	
Transfer 2002 net income to retained earnings	 	 	     —	 	 	     —	 	 	     —	 	 	     —	 	 	     40,202 	 	 	     (40,202	)	 	     —	 	
Declared dividends 2003	 	 	     —	 	 	     —	 	 	     —	 	 	     —	 	 	     —	 	 	     —	 	 	     —	 	
Accumulated deficit from subsidiaries in development stage (1)	 	 	     —	 	 	     —	 	 	     —	 	 	     (1,099	)	 	     —	 	 	     —	 	 	     (1,099	)	
Other comprehensive income (2)	 	 	     —	 	 	     —	 	 	     (1,157	)	 	     —	 	 	     —	 	 	     —	 	 	     (1,157	)	
Net income for the year	 	 	     —	 	 	     —	 	 	     —	 	 	     —	 	 	     —	 	 	     10,804 	 	 	     10,804	 	
	 	
Balance as of March 31, 2003	 	 	     263,196,524 	 	 	     477,386 	 	 	     123,954 	 	 	     (4,760	)	 	     250,826 	 	 	     10,804	 	 	     858,210	 	
	 	
Balance January 1,2004	 	 	     263,196,524	 	 	     477,386	 	 	     141,420	 	 	     (6,519	)	 	     230,932	 	 	     46,753	 	 	     889,972	 	
Transfer 2003 net income to retained earnings	 	 	     —	 	 	     —	 	 	     —	 	 	     —	 	 	     46,753 	 	 	     (46,753	)	 	     —	 	
Declared dividends 2004	 	 	     —	 	 	     —	 	 	     —	 	 	     —	 	 	     —	 	 	     —	 	 	     —	 	
Accumulated deficit from subsidiaries in development stage (1) 	 	 	     —	 	 	     —	 	 	     —	 	 	     (863	)	 	     —	 	 	     —	 	 	     (863	)	
Other comprehensive income (2)	 	 	     —	 	 	     —	 	 	     (3,757	)	 	     —	 	 	     —	 	 	     —	 	 	     (3,757	)	
Net income for the year	 	 	     —	 	 	     —	 	 	     —	 	 	     —	 	 	     —	 	 	     13,997 	 	 	     13,997	 	
	 	
Balance as of March 31, 2004	 	 	     263,196,524 	 	 	     477,386 	 	 	     137,663 	 	 	     (7,382	)	 	     277,685 	 	 	     13,997	 	 	     899,349	 	

 	(1) 	The only subsidiary currently in a development stage is SQM Lithium Specialties Limited.	
 	(2) 	Other comprehensive income includes translation adjustments and the effect of changes in the valuation of the Company’s under-funded pension as of March 31, 2003 and 2004.	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 17 – Shareholders’ Equity (continued)
b)	The composition of other comprehensive income as of March 31, 2004 is as follows:	
 	 	
 	 	 	 	 	 	For the year ended 
March 31,
2004 	 	 	As of
March 31,
2004	 	
 	 	 	 	 	 		 	 		 	
Detail 	 	 	 	 	 	ThUS$	 	 	ThUS$	 	

Technical appraisal 	 	 	 	 	 	—	 	 	151,345	 	
Changes to other comprehensive income from equity method investments:	 	 	 	 	 	 	 	 	 	 	
Soquimich Comercial S.A.	 	 	(1	)	 	(1,650	)	 	(4,146	)	
Isapre Norte Grande Ltda.	 	 	(1	)	 	—	 	 	(98	)	
Inversiones Augusta S.A.	 	 	(1	)	 	—	 	 	(761	)	
SQM Ecuador S.A.	 	 	(3	)	 	—	 	 	(270	)	
Almacenes y Depósitos Ltda.	 	 	(1	)	 	(14	)	 	(105	)	
Asociación Garantizadora de Pensiones	 	 	(1	)	 	(1	)	 	(15	)	
Empresas Melón S.A.	 	 	(1	)	 	(2,092	)	 	(8,281	)	
Sales de Magnesio Ltda.	 	 	(1	)	 	—	 	 	52	 	
SQM North America Corp.	 	 	(2	)	 	—	 	 	(777	)	
Other Companies	 	 	(1	)	 	—	 	 	719	 	
 	 	 	 	 	 		 	 		 	
Total other comprehensive income	 	 	(3,757	)	 	137,663	 	

 	(1)	Corresponds to translation adjustments and monetary correction	
 	(2)	Corresponds to a change in the valuation of the Company’s under-funded pension scheme	
 	(3)	Corresponds to the translation adjustment produced by the application of a new law implemented by the Ecuadorian Government	
 	 	
c)	Capital consists of 263,196,524 fully authorized, subscribed and paid shares with no par value, divided into 142,819,552 Series A shares and 120,376,972 Series B shares.

The preferential voting rights of each series are as follows:	
 	 	 	 	 	 	 	 	
Series A : 	 	 	 	 	 	If the election of the president of the Company results in a tied vote, the Company’s directors may vote once again, without the vote of the director elected by the 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.	 	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 18 – Derivatives Instruments
Derivative instruments are recorded at their fair value at year-end. Changes in fair value are recognized in income with the liability recorded in other current liabilities. Losses from options relate to fees paid by the Company to enter into such contracts. As of March 31, 2004 the Company’s derivative instruments are as follows:
2004
Type of 
derivative 	 	Notional or
covered
amount	 	 Expiration
 	 	 Description of the contract
type	 	 Position
purchase/sale	 	 (Liability)
Asset
amount	 	 Income
(loss) recorded	 	
 	 	 	ThUS$	 	 	 	 	 	 	 	 	 	 	 	ThUS$	 	 	ThUS$	 	
US dollar Forward	 	 	     12,467 	 	 	     2st quarter of 2004	 	 	Exchange rate	 	 	     P	 	 	     15	 	 	     —	 	
US dollar Forward	 	 	     3,637 	 	 	     2st quarter of 2004	 	 	Exchange rate	 	 	     P	 	 	     27	 	 	     27	 	
US dollar Forward	 	 	     360 	 	 	     2st quarter of 2004	 	 	Exchange rate	 	 	     P	 	 	     8	 	 	     8	 	
US dollar Forward	 	 	     11,640 	 	 	     2st quarter of 2004	 	 	Exchange rate	 	 	     P	 	 	     628	 	 	     611	 	
US dollar Forward	 	 	     6,051 	 	 	     2st quarter of 2004	 	 	Exchange rate	 	 	     P	 	 	     155	 	 	     —	 	
US dollar Forward	 	 	     3,448 	 	 	     3st quarter of 2004	 	 	Exchange rate	 	 	     P	 	 	     85	 	 	     —	 	
US dollar Forward	 	 	     1,840 	 	 	     4nd quarter of 2004	 	 	Exchange rate	 	 	     P	 	 	     43	 	 	     —	 	
US dollar Forward	 	 	     29,250 	 	 	     2nd quarter of 2004	 	 	Exchange rate	 	 	     S	 	 	     (832	)	 	     —	 	
US dollar Forward	 	 	     31,500 	 	 	     3st quarter of 2004	 	 	Exchange rate	 	 	     S	 	 	     (896	)	 	     —	 	
US dollar Forward	 	 	     13,500	 	 	     4nd quarter of 2004	 	 	Exchange rate	 	 	     S	 	 	     (384	)	 	     —	 	
US dollar Forward	 	 	     40,000 	 	 	     2nd quarter of 2004	 	 	Exchange rate	 	 	     P	 	 	     1,197	 	 	     1,197	 	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 19 – Non-Operating Income and Expenses 
Amounts included in non-operating income and expenses are summarized as follows:
 	a)	Non-operating income	
 	 	 	 	 	 	 	 	
 	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	
 	 	 	ThUS$	 	 	ThUS$	 	
 	 	 	 	 	 	 	 	
Interest income	 	 	587	 	 	630	 	
Reversal of allowance for doubtful accounts	 	 	—	 	 	256	 	
Net foreign exchange	 	 	—	 	 	2,377	 	
Insurance recoveries	 	 	15	 	 	85	 	
Sales of materials and services	 	 	21	 	 	81	 	
Equity participation in net income of unconsolidated subsidiaries	 	 	2,739	 	 	2,353	 	
Other income	 	 	753	 	 	660	 	
 	 	 		 	 		 	
     Total	 	 	4,115	 	 	6,442	 	

a)	Non-operating expenses	
 	 	
 	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	
 	 	 	ThUS$	 	 	ThUS$	 	
 	 	 	 	 	 	 	 	
Write-off of investments	 	 	1,821	 	 	1,765	 	
Interest expense	 	 	4,720	 	 	5,801	 	
Equity participation in net losses of unconsolidated subsidiaries	 	 	73	 	 	—	 	
Amortization of goodwill	 	 	337	 	 	245	 	
Net foreign exchange losses	 	 	566	 	 	—	 	
Work disruption expenses	 	 	105	 	 	1,003	 	
Increase in provision for employee compensation and legal costs	 	 	515	 	 	800	 	
Other expenses	 	 	822	 	 	547	 	
 	 	 		 	 		 	
Total	 	 	8,959	 	 	10,161	 	
 	 	 		 	 		 	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 20 – Price-level Restatement
Amounts charged or credited to income relating to price-level restatement are summarized as follows:
 	 	 	(Charge) credit to income from operations	 	
 	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	
 	 	 	ThUS$	 	 	ThUS$	 	
Property, plant and equipment	 	 	(68	)	 	22	 	
Other assets and liabilities	 	 	(5	)	 	2	 	
Shareholders’ equity	 	 	337	 	 	(237	)	
 	 	 		 	 		 	
Subtotal price-level restatement	 	 	264	 	 	(213	)	
 	 	 		 	 		 	
Net readjustment of assets and liabilities denominated in UF	 	 	33	 	 	37	 	
 	 	 		 	 		 	
Net price-level restatement	 	 	297	 	 	(176	)	
 	 	 		 	 		 	
Note 21 – Assets and Liabilities Denominated in Foreign Currency
 	 	 	2004	 	 	2003	 	
 	 	 		 	 		 	
Assets	 	 	ThUS$	 	 	ThUS$	 	
Total assets	 	 	 	 	 	 	 	
     Chilean pesos	 	 	153,715	 	 	100,373	 	
     US dollars	 	 	1,131,236	 	 	1,130,215	 	
     Euros	 	 	63,402	 	 	62,326	 	
     Japanese Yen	 	 	3,625	 	 	2,839	 	
     Brazilian Real	 	 	896	 	 	2,670	 	
     Mexican pesos	 	 	18,673	 	 	13,727	 	
     UF	 	 	12,399	 	 	7,253	 	
     South African Rand	 	 	5,900	 	 	—	 	
     Other currencies	 	 	1,122	 	 	13,790	 	
 	 	 	 	 	 	 	 	
Current liabilities	 	 	 	 	 	 	 	
     Chilean pesos	 	 	51,383	 	 	39,792	 	
     US dollars	 	 	86,562	 	 	37,276	 	
     Euros	 	 	13,143	 	 	14,954	 	
     Japanese Yen	 	 	34	 	 	224	 	
     Brazilian Real	 	 	639	 	 	496	 	
     Mexican pesos	 	 	8,098	 	 	2,362	 	
     UF	 	 	124	 	 	826	 	
     South African Rand	 	 	4,125	 	 	2,382	 	
     Other currencies	 	 	408	 	 	2,614	 	
 	 	 	 	 	 	 	 	
Long-term liabilities	 	 	 	 	 	 	 	
     Chilean pesos	 	 	59	 	 	4,741	 	
     US dollars	 	 	289,175	 	 	343,220	 	
     Japanese Yen	 	 	—	 	 	66	 	
     UF	 	 	9,054	 	 	3,104	 	
     Other currencies	 	 	—	 	 	2	 	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 22 – Cash Flow Statement
Amounts included in other investing income are summarized as follows:
 	 	 	 	 	 	2004	 	 	2003	 	
 	 	 	 	 	 		 	 		 	
 	 	 	 	 	 	ThUS$	 	 	ThUS$	 	
Repayment of employee loans	 	 	 	 	 	104	 	 	2,944	 	
Cash balance in new subsidiaries 	 	 	(1	)	 	—	 	 	2,815	 	
 	 	 	 	 	 		 	 		 	
Total	 	 	 	 	 	104	 	 	5,759	 	
 	 	 	 	 	 		 	 		 	
(1) Corresponds to the consolidation of the new subsidiaries Mineag SQM Africa Limited, Fertilizantes Olmeca, SQM S.A. de C.V. and Comercial Hydro S.A. during 2003.
Note 23 – Commitments and Contingencies
I.      Contingencies:
 	(a) 	Material lawsuits or other legal actions of which the Company is party to: 	
 	 	 	
 	1.	 	 	Plaintiff	 	:	 	SQM Salar S.A.	
 	 	 	 	Defendants	 	:	 	ACE Seguros S.A. (formerly – Cigna Compañía de 	
 	 	 	 	 	 	 	 	Seguros (Chile) S.A.) and Chubb de Chile 	
 	 	 	 	 	 	 	 	Compañía de Seguros Generales S.A.	
 	 	 	 	Date of lawsuit	 	:	 	April 2001	
 	 	 	 	Matter	 	:	 	Arbitration	
 	 	 	 	Status	 	:	 	Collection of compensation for insured claim	
 	 	 	 	Instance	 	:	 	Evidence verification	
 	 	 	 	Nominative value	 	:	 	ThUS$ 36,316	
 	 	 	 	 	 	 	 	 	
 	2.	 	 	Plaintiffs	 	:	 	Compagnie Du Guano de Poisson Angibaud S.A. and Generale de Nutrition Vegetale SAS	
 	 	 	 	Defendants	 	:	 	Soquimich European Holdings B.V., NU3 N.V. and SQM France S.A.	
 	 	 	 	Date of lawsuit	 	:	 	March 2002	
 	 	 	 	Court	 	:	 	Court of Arbitration in France	
 	 	 	 	Matter	 	:	 	Termination of the company relationship and 	
 	 	 	 	 	 	 	 	liquidation of the company Generale de Nutrition 	
 	 	 	 	 	 	 	 	Vegetale SAS	
 	 	 	 	Status	 	:	 	The lawsuit is being contested	
 	 	 	 	Nominative value	 	:	 	ThEuro$ 30,295	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 23 – Commitments and Contingencies (continued)
I.	Contingencies (continued):	
 	 	 	
 	(b)	Models for the Production of the María Elena site	
 	 	 	
 	 	The Company is currently reviewing the “Models for the Production of the María Elena site” which may be implemented as a result of the Decontamination Plan (see note 26). The different alternatives for production and technology development for the Maria Elena site, which are a part of the above-mentioned “Production Models” do not proactively generate significant changes in the present ore reserves or forecasted sales volumes. These options include possibilities to use new production methods and are related to the “leaching piles” and implementing a mixed system, which would be comprised of the use of the aforementioned technology and the current production methods. Advantages and disadvantages of the different options relate to the extension of the transition periods of new technology, the investments that will be required, production costs, changes in technologies and in productive processes and the effects on certain of the Company’s assets and their value. The possible effects on the valuation of assets are not yet determinable.	
 	 	 	
 	(b)	Natural gas supply	
 	 	 	
 	 	SQM will adopt the corresponding actions in the event of any decrease in the natural gas supply affecting the company and which allows the company to continue “generating the heat” necessary for the operation of its industrial plants in Region II of Chile.	
 	 	 	
 	 	The diverse industrial equipment of SQM, which uses natural gas can also use diesel and, some equipment, subsequent to making certain investments, may also use fuel oil. The value of diesel is higher than that of natural gas value and the fuel value of oil is lower than the value of diesel and higher than the value of natural gas.	
 	 	 	
 	 	The greater costs which SQM should incur as a result of a possible decrease in the natural gas supply, which to date, is provided by Distrinor, will mostly depend on the volume of such a decrease and on the extension of the period which this decrease will last. Consequently, SQM cannot currently estimate the economic effects that will cause a possible decrease on the natural gas supply.	
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SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
Notes to the Consolidated Financial Statements
(A translation of the original in Spanish- see note 2 (a))
Note 23 – Commitments and Contingencies (continued)
 	(c)	Other 

The Company and its subsidiaries are involved in litigation in the ordinary course of business. Based on the advice of counsel, management believes the litigation will not have a material effect on the consolidated financial statements. 	
II.      Commitments:
 	(a)	The subsidiary SQM Salar S.A. maintains an agreement with a government agency, whereby the Company must make annual payments until 2030 based on the Company’s annual sales. This amount, which has been paid since the beginning of the agreement in 1996, amounted to ThUS$958 in 2004 (ThUS$ 895 in 2003).	
 	 	 	
 	(b)	The Company has certain indirect guarantees, which relate to agreements with no remaining payments pending. These guarantees are still in effect and have been approved by the Company’s Board of Directors; however, they have not been used by the subsidiaries. 	
 	 	 	
 	(c)	Bank debt of SQM S.A. and its subsidiaries has no restrictions or terms other than those that might usually be found in identical debt in the financial markets, such as maximum indebtedness and minimum equity among others.	
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Note 24 – Third Party Guarantees 
As of March 31, 2004 and 2003 the Company has the following indirect guarantees outstanding:
 	 	 	Debtor	 	 	Balances outstanding	 	
 	 	 		 	 		 	
Beneficiary	 	 	Name	 	 	Relationship	 	 	2004	 	 	2003	 	
 	 	 	 	 	 	 	 	 	ThUS$	 	 	ThUS$	 	
Phelps Dodge Corporation	 	 	SQM Potasio S.A.	 	 	Subsidiary	 	 	1,863	 	 	2,694	 	
Bank of America N.A.	 	 	RS Agro-Chemical Trading A.V.V.	 	 	Subsidiary	 	 	—	 	 	80,723	 	
 
Note 25 – Sanctions
During 2004 and 2003, the SVS did not apply sanctions to the Company, its directors or managers.
Note 26 – Environmental Projects
Disbursements incurred by the Company as of March 31, 2004 relating to its investments in production processes and compliance with regulations related to industrial processes and facilities are as follows:
  	 	 
2004	 	Future
Disbursements	 	
 	 	 		 	 		 	
 	 	 	ThUS$	 	 	ThUS$	 	
Project	 	 	 	 	 	 	 	
Environmental department	 	 	93	 	 	490	 	
Boratos sewage treatment plant	 	 	107	 	 	187	 	
Tocopilla project	 	 	588	 	 	25	 	
Engineering and building of María Elena piles	 	 	2,367	 	 	972	 	
Treatment plant MOP	 	 	208	 	 	—	 	
Other	 	 	737	 	 	128	 	
 	 	 					 	
Total	 	 	4,100	 	 	1,802	 	
 	 	 					 	
Protecting the environment is a constant concern for SQM, regarding both the Company’s productive processes and the manufactured goods.
SQM is currently implementing an Environmental Management System, which is based on the ISO 14000 standard, with which, the Company’s environmental performance will be improved through the effective application of the Environmental Policy of SQM. The implementation program stipulates that late in 2004, all the operations maintained by the Company in Regions I and II of Chile, will have a fully implemented Environmental Management System.
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Note 26 – Environmental Projects (continued)
As part of the conversion project to natural gas, the supplier will in turn make an investment of ThUS$ 5,500 to be paid by the Company on a monthly basis for the duration of the contract (10 years).
Technological processes are intended to be environmentally friendly in order to reduce residual materials and improve technical conditions to ensure effective protection of the environment. An example of this is ongoing conversion of oil to natural gas used in the Company’s plants. 
Processes where sodium nitrate is used as a raw material are carried out in geographical areas such as the desert with favorable weather conditions for the drying of solid materials and the evaporation of liquids used in solar energy. The extraction of minerals in open pit mines, given their low waste-to-mineral ratio, gives rise to waste deposits that have little impact on the environment. The extraction process and ore crushing produce particles that are consistent with the industry of operation. 
On August 10, 1993, the Ministry of Health published a resolution under the Sanitary Code that established that the levels of breathable particles present at Maria Elena Plant exceeded the level allowed for the quality of air and, which affected the nearby city of Maria Elena. Particles mainly come from dust that results from processing the sodium nitrate, particularly at the crushing process prior to leaching. The decontamination plan presented by the Company to reduce the level of particles was approved with certain modifications by means of Decree No. 164. As a result of the investments and processes implemented according to the approved plan, the Company has substantially reduced the levels of particles in the air. Resolution No. 384, made public on May 16, 2000, authorized the review and a new draw up of the decontamination plan for the city of Maria Elena. The Supreme Decree containing the final Decontamination Plan should be made public within months. It is not possible to assure that within such period the Company will be free from warnings, fines or even eventual temporary closing of the crushing plant in Maria Elena. The Company is continuously researching techniques, processes and systems relating to the processing of sodium nitrate that could even further reduce the level of particles in the city of Maria Elena.
Ore treatment operations, as they are controlled processes, produce solid residual materials that are the non-soluble by product and a certain degree of moisture.
Productive operations based on brine, are carried out at the Atacama Salt Mine and almost 95% of the energy used is solar energy and the remaining 5% comes from natural gas, electricity and fossil fuels. Residual brine left after the production processes are again injected to the Atacama Salt Mine in order to minimize the possible environmental impact.
SQM entered into a contract with the National Forestry Corporation (CONAF) aimed at researching the activities of flamingo groups that live in the Atacama Salt Mine lagoons. Such research includes a population count of the birds and wildlife, breeding research, additional behavior research and the climate phenomena of the area.
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Note 26 – Environmental Projects (continued)
Consistent with the Company’s ongoing commitment with the environmental authorities, the Company actively participates in the Joint Monitoring Research project for the Atacama Salt Mine watershed along with other mining companies that make use of the water resources that supply the Atacama Salt Mine watershed.
Note 27 – Promesa Compraventa de Acciones Sociedad PCS Yumbes S.C.M. 
On October 24, 2003 the Company’s Board of Directors authorized SQM S.A.’s management to begin negotiations to acquire all the shares of the Chilean Company PCS Yumbes S.C.M., a subsidiary of Potash Corporation of Saskatchewan Inc.
On November 20, 2003, SQM S.A. and its subsidiary SQM Nitratos S.A., subscribed to a share purchase agreement under which they are committed to purchase all of the outstanding shares of the company PCS Yumbes from Inversiones PCS Chile Limitada and 628550 Saskatchewan Ltd., both subsidiaries of Potash Corporation of Saskatchewan Inc.. The final price of the share purchase will be ThUS$35,000, subject to certain adjustments at the date the final agreement is signed. The purchase will comprise all of the fixed assets, mining concessions, water rights and other assets of PCS Yumbes S.C.M. and will exclude all liabilities and contractual obligations.
Note 28 – Significant Events
On March 19, 2003, the company informed the Superintendency of Securities and Insurance that the Board of Directors of SQM, at its meeting dated March 16, 2003 unanimously agreed to propose the payment of a final dividend of US$ 0.08811 per share in favor of those SQM’s shareholders which were registered in the respective registry during the fifth working day prior to the payment of this dividend.
This proposal, upon approval by the next Company’s Shareholders’ Meeting which will be held on April 30, 2004, will allow the Company to pay and distribute, as stated in the respective Dividend Policy, an annual dividend equivalent to 50% of the net profits which can be distributed and are obtained during 2003.
 
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Note 29 – Subsequent Events
On April 30, 2004, the company held its Shareholders’ meeting. At this meeting, the majority of the Company’s shareholders, among others, agreed the following:
 	a)	The shareholders approved the distribution and payment of a final and total dividend of Ch$55.05465 per share . The payment of this dividend was agreed in one single installment, beginning on May 12, 2004 and with a charge to 2003 income.	
 	 	 	
 	b)	The shareholders approved the payment of UF 50 (fifty UF) in favor of each member of the Directors Committee, regardless of the number of meetings that this Committee holds during the respective month. In addition, they approved the implementation of an annual budget for the operating expenses of this Committee and of their advisors for an amount of UF 1,800 (one thousand and eight hundred UF).	
 	 	 	
 	c)	The shareholders approved remuneration to be paid to the Company’s directors during the next twelve months.	
Except for that indicated above, the Company’s management is not aware of any other significant event, which has occurred between March 31 and the date of issuance of these financial statements (May 5, 2004), which could have a significant impact on them.
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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: June 15, 2004.