By Dave Sherwood and Antonio De la Jara
SANTIAGO, Nov 22 (Reuters) - Chilean miner SQM said on Thursday that delays in a project to boost output of lithium from salt flat Salar de Atacama slashed sales volumes of the ultralight battery metal by 27 percent in the third quarter.
SQM SQMa.SN SQM_pb.SN , the world's No. 2 producer of lithium, said the previously announced delays were partly offset by high prices and 25 percent growth in demand in 2018 on sales to producers of electric vehicles.
"These two factors have contributed to market prices remaining high during the third quarter," Chief Executive Officer Patricio de Solminihac said after the company reported that third-quarter profit fell. "It is expected that prices will remain at these levels for the remainder of the year."
Prices so far this year have averaged $16,5000 per tonne, up from $13,500 in 2017, according to the company's earnings statement.
SQM said in October it was facing delays in upgrading its lithium carbonate plant, which processes lithium from Salar de Atacama. The project, first announced in 2017, was designed to upgrade lithium production capacity to 70,000 tonnes.
"We are working diligently to resolve these issues as soon as possible," Solminihac said. "The ramp-up delay will likely impact our fourth-quarter lithium and derivative sales volumes, delaying part of these volumes to the first quarter of 2019."
Revenues for lithium and derivatives during the third quarter dropped 8.9 percent from the third quarter of 2017 amid the production delays, the company said.
Total lithium sales volumes this year should be around 45,000 tonnes, Solminihac said. The company earlier this year targeted sales volumes in the lithium business line of 55,000 tonnes in 2018.
SQM reported earnings of $83.5 million in the quarter, down 26 percent from $112.9 million in 2017. Tianqi Lithium Corp 002466.SZ has cleared regulatory hurdles in Chile to purchase nearly one-quarter of SQM for $4.1 billion from Canada-based fertilizer company Nutrien Ltd NTR.TO . has said it will overtake competitor Albemarle Corp ALB.N as the world's top producer of lithium by 2022. SQM and Albemarle are preparing to ramp up production in Salar de Atacama, one of the world's richest source of lithium, amid the sharp spike in global demand.