SANTIAGO, May 20 (Reuters) - Chilean miner SQM, the world's No. 2 producer of lithium, said profits plunged by nearly half in the first quarter of 2020 as prices for the battery metal continued to freefall amid the spread of the coronavirus.
Lithium producers who saw supply swamp demand earlier this year continue to see earnings hammered by sliding automobile sales and the economic malaise caused by the pandemic.
SQM posted a 44% drop in first-quarter net income to $45 million, its earnings statement showed.
"Average lithium prices were almost 50% lower than average prices seen during the same period last year," CEO Ricardo Ramos said in the statement.
The tumble in prices dragged lithium revenue down 58%, the company said.
Gross profits from its high-profile lithium business now account for just 12% of SQM´s total, versus nearly half during the same period of 2019, the company said.
SQM, which operates in Chile´s far-flung Atacama salt flat, said safety measures implemented early in the country´s coronavirus outbreak had spared it the worst.
"We have been able to continue to operate at normal levels over the past months," the company said.
Chile, a South American mining powerhouse and the top global producer of copper, has seen cases of COVID-19 spike in the past week as its health care system teeters on collapse.
SQM acknowledged difficulties selling in Asian markets early in 2020, but said it nonetheless expected to increase its market share and boost sales volume this year.
"Our strong balance sheet and firm commitment to the lithium market allows us to continue moving forward with our capacity expansion plans in lithium carbonate and lithium hydroxide," the company said.
"To date, we expect to finalize both projects by the end of 2021."
Reporting by Dave Sherwood; editing by Jason Neely