Edgar Filing: CHEMICAL & MINING CO OF CHILE INC

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

Includes the free translation of a material event sent by Sociedad Química y Minera de Chile S.A. to the Superintendencia de Valores y Seguros de Chile on April 24, 2007.

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, 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 o

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 o

No x

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

On April 24, 2007, 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, 2007. 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, 2007 REPORT FILED WITH THE SUPERINTENDENCIA DE VALORES Y SEGUROS (SVS) IN CHILE, AND UNLESS OTHERWISE INDICATED, FIGURES ARE IN US DOLLARS.

Consolidated Financial Statements

SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.

Santiago, Chile

March 31, 2007 and 2006

Consolidated Financial Statements

SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.

As of March 31, 2007 and 2006

and for the years ended March 31, 2007 and 2006

(A translation of the original in Spanish- see note 2 (a))

Contents

Consolidated Financial Statements

Consolidated Balance Sheets	3
Consolidated Statements of Income	5
Consolidated Statements of Cash Flows	6
Notes to the Consolidated Financial Statements	7

Ch$	-	Chilean pesos
ThCh $	-	Thousands of Chilean pesos
US$	-	United States dollars
ThUS$	-	Thousands of United States dollars
ThEuro	-	Thousands of Euros
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.

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		2007			2006
			ThUS$			ThUS$
ASSETS

Current assets
Cash				18,078			19,457
Time deposits				31,934			45,966
Marketable securities		4		118,229			63,360
Accounts receivable, net		5		167,180			172,345
Other accounts receivable, net		5		10,341			12,442
Accounts receivable from related companies		6		75,029			47,619
Inventories, net		7		384,042			376,208
Recoverable taxes				34,042			27,551
Prepaid expenses				7,831			7,313
Deferred income taxes		15		-			6,519
Other current assets				11,538			8,686
Total current assets				858,244			787,466

Property, plant and equipment, net		8		932,544			867,160

Other Assets
Investments in related companies		9		18,962			21,045
Goodwill, net		10		35,762			46,387
Negative goodwill, net		10		(1,928	)		(17	)
Intangible assets, net				4,353			5,152
Long-term accounts receivable, net		5		390			288
Long-term accounts receivable from related companies		6		2,118			2,000
Other long-term assets		11		45,745			50,043
Total Other Assets				105,402			124,898
Total assets				1,896,190			1,779,524

The accompanying notes form an integral part of these consolidated financial statements.

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		2007		2006
			ThUS$		ThUS$
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
Short-term bank debt		12		32,133		67,710
Current portion of long-term debt		12		1,966		201,088
Current portion of bonds payable		13		9,574		1,348
Dividends payable				262		227
Accounts payable				85,220		83,032
Other accounts payable				816		1,085
Notes and accounts payable to related companies		6		704		2,852
Accrued liabilities		14		21,453		19,203
Withholdings				9,156		14,078
Income taxes				11,879		29,348
Deferred income				1,748		6,580
Deferred income taxes		15		3,478		-
Other current liabilities				2,171		392
Total current liabilities				180,560		426,943

Long-term liabilities
Long-term bank debt		12		180,000		100,000
Long-term Obligations with the Public (Bonds)		13		299,689		102,119
Other accounts payable				790		986
Deferred income taxes		15		48,530		43,550
Staff severance indemnities		16		19,264		17,753
Total long-term liabilities				548,273		264,408

Minority interest		17		39,034		34,950

Shareholders' equity
Paid-in capital		18		477,386		477,386
Other reserves		18		154,601		155,807
Retained earnings		18		496,336		420,030
Total shareholders' equity				1,128,323		1,053,223
Total liabilities and shareholders' equity				1,896,190		1,779,524

The accompanying notes form an integral part of these consolidated financial statements.

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		2007			2006
			ThUS$			ThUS$
Operating results

Sales				237,149			219,136
Cost of sales				(164,120	)		(154,951	)
Gross margin				73,029			64,185
Selling and administrative expenses				(14,232	)		(15,633	)
Operating income				58,797			48,552


Non-operating results
Non-operating income		20		8,249			4,519
Non-operating expenses		20		(12,973	)		(10,057	)
Non-operating loss				(4,724	)		(5,538	)
Income before income taxes				54,073			43,014
Income tax expense		15		(10,557	)		(8,391	)
Income before minority interest				43,516			34,623
Minority interest		17		(553	)		(387	)
Net income before negative goodwill				42,963			34,236
Amortization of negative goodwill		10		-			51
Net income for the year				42,963			34,287

The accompanying notes form an integral part of these consolidated financial statements.

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,
		2007			2006
		ThUS$			ThUS$
Cash flows from operating activities
Net income for the year			42,963			34,287
Charges (credits) to income not representing cash flows
Depreciation expense	8		22,750			21,025
Amortization of intangible assets			169			403
Write-offs and accruals			6,944			3,086
Gain on equity investments in related companies			(456	)		(722	)
Loss on equity investments in related companies			-			105
Amortization of goodwill	10		558			705
Amortization of negative goodwill	10		-			(51	)
(Profit) loss on sales of assets			(2	)		-
Loss from sale of investments			-			-
Other credits to income not representing cash flows			(966	)		(6,650	)
Other charges to income not representing cash flows			26,599			21,334
Foreign exchange difference, net			870			(848	)
Net changes in operating assets and liabilities (Increase) decrease:
Trade accounts receivable			(3,766	)		21,028
Inventories			(20,834	)		(40,549	)
Other assets			(11,804	)		(11,708	)
Accounts payable			(6,265	)		637
Interest payable			2,954			(2,019	)
Net income taxes payable			(6,432	)		-
Other accounts payable			(1,793	)		(144	)
VAT and taxes payable			(1,837	)		(485	)
Minority interest	17		553			387
Net cash provided from operating activities			50,205			39,821

Cash flows from financing activities
Proceeds from short term bank financing			-			10,000
Bonds payable			-			100,991
Payment of dividends			(56	)		(62	)
Repayment of bank financing			(25,000	)		(30,000	)
Net cash used in financing activities			(25,056	)		80,929

Cash flows from investing activities
Other investing income	24		97			24,255
Additions to property, plant and equipment			(37,794	)		(50,389	)
Capitalized interest			(3,038	)		-
Purchase of permanent investments			-			(114,035	)
Other disbursements			(136	)		-
Net cash used in investing activities			(40,871	)		(140,169	)

Effect of inflation on cash and cash equivalents			20			464
Net change in cash and cash equivalents			(15,702	)		(18,955	)
Beginning balance of cash and cash equivalents			183,943			147,956
Ending balance of cash and cash equivalents			168,241			129,001

The accompanying notes form an integral part of these consolidated financial statements.

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. 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”). For the convenience of the reader, the consolidated financial statements and their accompanying notes have been translated from Spanish into English.

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 SVS Circular No. 1,697 and Technical Bulletins Nos. 64 and 72 of the Chilean Association of Accountants, the consolidated financial statements include the following subsidiaries:

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)

Basis for the preparation of the consolidated financial statements (continued)

	Direct or indirect ownership
	2007		2006
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 Investment Corporation NV (Dutch Antilles)		100.00		100.00
SQM Brasil Ltda.		100.00		100.00
Royal Seed Trading Corporation AVV (Aruba)		100.00		100.00
SQM Japon Co. Ltda.		100.00		100.00
SQM Oceanía PTY Limited (Australia)		100.00		100.00
SQM France S.A.		100.00		100.00
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)		100.00		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 C.V. (Mexico)		0.00		100.00
Administración y Servicios Santiago S.A. de C.V. (Mexico)		100.00		100.00
SQM Lithium Specialties LLC (USA)		100.00		100.00
SQM Nitratos México S.A. de C.V. (México)		51.00		51.00
Fertilizantes Naturales S.A.		66.67		66.67
Iodine Minera B.V.		100.00		100.00
SQM Dubai - SZCO.		100.00		100.00

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)

Basis for the preparation of the consolidated financial statements (continued)

	Direct or indirect ownership
	2007		2006
	%		%
Domestic subsidiaries:
Servicios Integrales de Tránsitos y Transferencias S.A.		100.00		100.00
Soquimich Comercial S.A.		60.64		60.64
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
SQM Industrial S.A.		100.00		100.00
Minera Nueva Victoria S.A.		100.00		100.00
Exploraciones Mineras S.A.		100.00		0.00
Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A.		100.00		0.00
Comercial Hydro S.A.		60.64		60,64

All significant inter-company balances, transactions and unrealized gains and losses arising from transactions between these companies have been eliminated in consolidation.

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, 2007 and 2006 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 ( 0.2% and -0.3% in 2007 and 2006, 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.

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

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$ 539.21 per US$1 at March 31, 2007 and Ch$ 526.18 per US$1 at March 31, 2006.

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 and No. 72 of the Chilean Association of Accountants (“BT 64-BT 72”) as follows:

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. 1,697 of the SVS.

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)

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, 2007 and 2006 generated net earnings (loss) of ThUS$ (870) and ThUS$ 848 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:

	2007		2006
	US$		US$
Brazilian Real		2.06		2.19
New Peruvian Sol		3.18		3.35
Argentine Peso		3.10		3.08
Japanese Yen		118.05		110.00
Euro		0.75		0.83
Mexican Peso		11.05		10.92
Indonesian Rupee		9,830.04		9,290.00
Australian Dollar		1.24		1.39
Pound Sterling		0.51		0.57
Ecuadorian Sucre		1.00		1.00
South African Rand		7.22		6.28

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.

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 products in process are stated at average production cost, which is presented net of provisions. Provisions have been made based on a technical study which covers the different variances which affect our products (density, moist, among others).

Materials and supplies received are stated at average acquisition and inventories in transit are stated at cost incurred at the end of the period.

The cost of inventories does not exceed its net realizable value.

j)	Income taxes and deferred income taxes

In conformity with current Chilean tax regulations, the Company recognizes the provision for corporate income tax expense and the income tax for the mining activity on an accrual basis.

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.

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 acquisition cost, considering in general an average residual value of 5%, except for certain assets that were restated in accordance with a technical appraisal in 1989. Depreciation for the period is calculated according to the straight-line method based on the remaining technical useful lives of assets, estimated by management.

Property, plant and equipment acquired through financial 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 and 33 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 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.

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, in accordance with SVS Circulars Nos. 368 and 1,697 and Technical Bulletins Nos. 64 and 72 issued by the Chilean Association of Accountants. 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 that maintain their accounting records and are controlled in Chilean pesos is recognized in other reserves within shareholders’ equity. Direct and indirect investments in foreign subsidiaries or affiliates are controlled in U.S. dollars.

Investments in which the Company has less than 20% participation and the capacity to exert significant influence or control over the investment, because SQM forms part of its Board of Directors, have been valued using the equity method.

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.

Beginning on January 1, 2004, goodwill and negative goodwill represents the difference between the acquisition cost of the investment in a related company and the fair value of this investment at the acquisition date, which is amortized with a charge or credit to income in the expected period of return of the investment, which does not exceed 20 years.

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.

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 average employee tenure of 24 years and a real annual discount rate of 8%.

q)	Vacations

The cost of employee vacations is recognized in the financial statements on an accrual basis.

r)	Saleback operations

These operations are registered in Other Current Assets at the amount of the purchase. Starting at the purchase date, the respective interest is recorded in accordance with SVS Circular 768.

s)	Dividends

Dividends are generally declared in U.S. dollars but are paid in Chilean pesos.

t)	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.

u)	Reclassifications

For comparison purposes, certain reclassifications have been made to the 2006 financial statements.

v)	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.

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))

w)	Computer software

Computational systems developed internally using the Company’s personnel and materials are charged to income during the year in which the expenses are incurred. In accordance with Circular No. 981 dated December 28, 1990 of the SVS, computer systems acquired by the Company are recorded at cost.

x)	Research and development expenses

Research and development cost are charged to the income statement in the period in which they are incurred. Property, plant and equipment that are acquired for use in research and development activities and determined to provide additional benefits to the Company are recorded in property, plant and equipment.

y)	Obligations with the public (Bonds payable)

Bonds are stated at the principal amount plus interest accrued. The difference between the carrying value and the placement value is capitalized and amortized in the period of expiration of these.

z)	Provisions for mine closure costs

The Company has made a provision to cover those costs associated with mine closure and mining facilities and mitigation of environmental damage, which has been recorded at its present value. The amount determined is presented under accrued expenses in long-term liabilities.

aa)

Deferred income

Deferred income relate to the recognition of documented sales the delivery of which occurs subsequent to the closing date of the financial statements.

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

During the period ended March 31, 2007, there were no other changes in the application of generally accepted accounting principles in Chile compared to the prior year.

Note 4 - Marketable Securities

As of March 31 marketable securities are detailed as follows:

	2007		2006
	ThUS$		ThUS$

Mutual funds		118,229		63,360
Total		118,229		63,360

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

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				Short-term (net)
	2007		2006		2007		2006		2007			2006
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			ThUS$
Short-term
Trade accounts receivable		120,934		128,459		17,065		16,896		137,999			145,355
Allowance for doubtful accounts										(7,208	)		(7,969	)
Notes receivable		32,393		32,914		7,281		5,988		39,674			38,902
Allowance for doubtful accounts										(3,285	)		(3,943	)
Accounts receivable, net										167,180			172,345

Other accounts receivable		10,818		11,485		1,029		1,655		11,847			13,140
Allowance for doubtful accounts										(1,506	)		(698	)
Other accounts receivable, net										10,341			12,442

Long-term receivables										390			288

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
	2007			2006			2007			2006			2007			2006			2007			2006			2007			2006			2007			2006
	ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$

Net short-term trade accounts receivable
Balance		34,246			25,356			52,591			42,065			2,715			8,997			29,636			33,999			11,603			26,969			130,791			137,386
% of total		26.18	%		18.46	%		40.21	%		30.61	%		2.08	%		6.55	%		22.66	%		24.75	%		8.87	%		19.63	%		100.00	%		100.00	%

Net short-term notes receivable
Balance		29,086			26,114			2,898			3,413			264			654			475			344			3,666			4,434			36,389			34,959
% of total		79.93	%		74.70	%		7.96	%		9.76	%		0.73	%		1.87	%		1.31	%		0.99	%		10.07	%		12.68	%		100,00	%		100.00	%

Net short-term other accounts receivable
Balance		5,562			4,148			1,917			2,948			9			98			2,647			4,107			206			1,141			10,341			12,442
% of total		53.79	%		33.34	%		18.53	%		23.69	%		0.09	%		0.79	%		25.60	%		33.01	%		1.99	%		9.17	%		100.00	%		100.00	%

Subtotal short-term accounts receivable, net
Balance		68,894			55,618			57,406			48,426			2,988			9,749			32,758			38,450			15,475			32,544			177,521			184,787
% of total		38.81	%		30.10	%		32.34	%		26.20	%		1,68	%		5.28	%		18.45	%		20.81	%		8.72	%		17.61	%		100.00	%		100.00	%

Long-term accounts receivable, net
Balance		376			273			-			-			-			-			-			-			14			15			390			288
% of total		96.41	%		94.79	%		-			-			-			-			-			-			3.59	%		5.21	%		100.00	%		100.00	%

Total short and long-term accounts receivable, net
Balance		69,270			55,891			57,406			48,426			2,988			9,749			32,758			38,450			15,489			32,559			177,911			185,075
% of total		38.94	%		30.20	%		32.27	%		26.17	%		1.68	%		5.27	%		18.40	%		20.77	%		8.71	%		17.59	%		100.00	%		100.00	%

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

Balances with related companies are generated by commercial transactions which accrue no interest under normal conditions in force for this type of operations in respect to term and market price.

Expiration conditions for each case vary depending on the transaction which generated it.

In addition, all those significant transactions with related parties with an amount exceeding 1% of net income for the year are disclosed.

a) Amounts included in balances with related parties as of March 31, 2007 and 2006 are as follows:

	Short-term				Long-term
	2007		2006		2007		2006
Accounts receivable	ThUS$		ThUS$		ThUS$		ThUS$
Doktor Tarsa -SQM Turkey		11,597		10,810		-		-
Nutrisi Holding N.V.		1,626		1,468		-		-
Generale de Nutrition Vegetale S.A.		-		132		-		-
Ajay Europe S.A.R.L.		9,244		2,856		-		-
Ajay North America LLC		3,135		2,747		-		-
Abu Dhabi Fertilizer Ind. WLL		3,719		2,730		2,000		2,000
Impronta SRL		-		4,520		-		-
NU3 B.V.		447		1,018		-		-
Sales de Magnesio S.A.		133		52		-		-
SQM Agro India		221		-		-		-
Misr Specialty Fertilizers		319		-		118		-
Soc.Inv.Pampa Calichera Ltda.		8		8		-		-
Invesiones PCS Chile Ltda.		17		-		-		-
Kowa (Japan)		11,433		-		-		-
NU3 N.V.		454		-		-		-
PCS Sales Inc		-		44		-		-
SQM East Med Turkey		93		-		-		-
Yara AB		99		59		-		-
Yara Benelux B.V		1,061		1,460		-		-
Yara Hellas S.A.		405		647		-		-
Yara International Australia PTY.		265		408		-		-
Yara Poland SP		804		168		-		-
Yara UK Ltd.		361		480		-		-
Yara CZECH Republic		13		17		-		-
Yara GMBH & CO KG		192		187		-		-
Yara Iberian S.A.		1,598		1,706		-		-
Yara Argentina S.A.		40		611		-		-
Yara Colombia Ltda..		2,973		412		-		-
Adubo Trevo S.A. (Yara)		252		-		-		-
Yara North America LLC		8,430		7,387		-		-
Yara Fertilizantes Ltda (Brasil)		786		20		-		-
Yara France BU Africa		1,088		1,115		-		-
Yara Internacional ASA		4,207		3,898		-		-
Yara International Asia Trade Pte Ltd		928		1,762		-		-
Yara East Africa Limited		514		724		-		-
Yara Fertilizers (Philippines)		-		24		-		-
Yara Fertilizers (New Zealand)		110		74		-		-
FOS (Yara)		2,832		-		-		-
Yara Italia SPA		626		-		-		-
Yara International Asia Trade Pte (Singapore)		2,693		-		-		-
Yara Norge AS		8		-		-		-
Yara France S.A.		2,298		75		-		-
Total		75,029		47,619		2,118		2,000

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, 2007 and 2006, continued:

	Short-term
	2007		2006
Accounts payable	ThUS$		ThUS$

NU3 N.V.		-		653
Charlee SQM Thailand Co		223		196
Adubo Trevo S.A.		-		877
Inversiones PCS Chile Ltda.		-		1,000
Yara France BU Latin America		81		126
Yara Nederland B.V.		400		-
Total		704		2,852

There were no outstanding long-term accounts payable with related parties as of March 31, 2007 and 2006

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 2007 and 2006, principal transactions with related parties were as follows:

Company	Relationship	Type of transaction	Amount of Transaction		Impact on income (charge) credit
			2007	2006	2007	2006
			ThUS$	ThUS$	ThUS$	ThUS$

NU3 N.V. (Belgium)	Indirect	Sales of products	1,614	1,640	622	547
Doktor Tarsa	Indirect	Sales of products	3,065	3,259	1,115	1,123
Abu Dhabi Fertilizer WLL	Indirect	Sales of products	835	563	150	125
Impronta SRL	Indirect	Sales of products	0	913	0	254
Ajay Europe S.A.R.L.	Indirect	Sales of products	4,630	2,642	2,995	1,097
NU3 B.V.	Indirect	Sales of products	1,879	2,084	734	463
Ajay North America LLC	Indirect	Sales of products	3,555	3,464	1,843	1,508
Yara AB Sueden	Shareholder	Sales of products	0	178	0	36
Yara Benelux B.V.	Shareholder	Sales of products	2,223	2,875	409	482
Yara UK Ltd.	Shareholder	Sales of products	0	480	0	102
Yara International Asia Trade Pte Ltd.	Shareholder	Sales of products	3,264	1,893	1,040	621
Yara France BU Africa	Shareholder	Sales of products	560	736	104	151
Yara Business Support	Shareholder	Services	1,091	1,100	-1,091	-1,100
Yara International Australia Pty Ltd.	Shareholder	Sales of products	539	282	175	52
Yara Iberian S.A.	Shareholder	Sales of products	1,704	1,947	650	712
Yara Colombia Ltda.	Shareholder	Sales of products	1,651	662	664	192
Yara Poland SP	Shareholder	Sales of products	708	273	271	63
Yara GMBH & Co Kg	Shareholder	Sales of products	0	293	0	74
Yara France	Shareholder	Sales of products	2,194	1,651	634	480
Yara China Ltd.	Shareholder	Sales of products	1,358	0	200	0
Yara Hellas S.A.	Shareholder	Sales of products	0	641	0	175
Yara France BU Latin America	Shareholder	Sales of products	2,014	0	595	0
Yara Argentina S.A.	Shareholder	Sales of products	0	615	0	216
Adubo Trevo S.A.	Shareholder	Sales of products	0	1,573	0	670
Yara East Africa Ltd	Shareholder	Sales of products	516	313	138	20
Yara Internacional ASA	Shareholder	Sales of products	6,461	5,108	1,146	1,905
Yara North America	Shareholder	Sales of products	12,752	10,317	3,069	3,356
Yara Italia	Shareholder	Sales of products	608	0	204	0
Kowa (Japan)	Shareholder	Sales of products	15,438	0	10,092	0

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 7 - Inventories

Net inventories are summarized as follows:

	2007		2006
	ThUS$		ThUS$

Finished products		228,842		242,853
Work in process		135,565		115,332
Supplies		19,635		18,023
Total		384,042		376,208

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:

	2007		2006
	ThUS$		ThUS$
Land
Land		82,383		59,947
Mining Concessions		30,086		45,096
Total		112,469		105,043

Buildings and infrastructure
Buildings		163,470		167,596
Installations		273,830		206,998
Construction-in-progress		187,775		169,664
Other		190,682		172,694
Total		815,757		716,952

Machinery and Equipment
Machinery		484,114		452,484
Equipment		126,247		123,794
Project-in-progress		11,525		11,570
Other		19,244		18,104
Total		641,130		605,952

Other fixed assets
Tools		8,950		8,804