SANTIAGO, July 31 (Reuters) - Moody's Ratings affirmed

the credit rating of Chilean lithium miner SQM but lowered its

outlook to negative from stable due to uncertainty around

lithium revenue, the agency said on Thursday.

Moody's also noted that SQM's significant capital

expenditure and dividend payments have heightened the company's

reliance on debt.

Global prices for lithium, a critical component of electric

vehicle batteries, have plunged nearly 90% since their peak in

late 2022, causing producers worldwide to slash workforces and

pull back on plans.

SQM began

laying off

5% of its Chilean workforce last month.

Moody's said SQM, the world's second-largest lithium

miner, maintains a strong market position in lithium and iodine

but still faces risks from depending on debt financing for

capital projects, as well as global trade tensions.

SQM's debt surged from $2.9 billion at the end of 2023

to $4.7 billion by March 2025, accompanied by a more than 50%

drop in EBITDA, according to Moody's.

The ratings agency warned that SQM's ratings could be

downgraded if the company fails to reduce its debt-to-EBITDA

ratio to below 2.5x within 12-18 months, or improve its

diversification and stable cash flow generation.

Moody's also noted the importance of lithium prices.

"These market conditions are critical, as they affect

SQM's ability to deleverage and return debt to EBITDA levels,"

it said.