MARIA ELENA, Chile, Oct 27 (Reuters) - Lithium giant SQM is moving into new countries and products and offering more transparency as it tries to ease investor concerns about alleged corruption, ties to Chile's former right-wing dictatorship and a bitter royalty dispute with the government.
SQM is one of the world's biggest producers of lithium, iodine and nitrates, and its executives say they talk regularly to potential customers like carmaker Tesla Motors Inc.
But at home it is often on the front pages of newspapers for the wrong reasons.
An ongoing investigation into the issue of fake invoices to SQM and others, allegedly used as recently as 2014 to illicitly finance political campaigns, has dominated headlines for months.
"We're a low-profile company, trying to do the best with the assets that we have. And all of a sudden we're on the front page of the newspapers. We don't like that," Gerardo Illanes, vice president for finance, told Reuters this month in a rare interview.
"(That) will change with us continuing to do our work in the right way, keep on improving efficiencies, keep on improving market share, keep on delivering to our shareholders. That's what will help us move on."
A recently finalized strategic plan emphasizes geographical diversification, new products and a more collaborative management style as it looks to modernize.
The illicit donations scandal came on the heels of a market manipulation fine involving the firm's controlling shareholder, Julio Ponce, who resigned as chairman last year and has put most of his stake up for sale.
Ponce has had close ties with the company since the 1980s, when it was privatized under dictator Augusto Pinochet, then his father-in-law.
Now Chile's current center-left government is in arbitration with SQM over royalty payments, a dispute the company says it is confident it will win. At stake are cash flows from assets that made up 40 percent of 2014 revenues, analysts say.
Outside of that dispute, SQM's relationship with the government is "normal", Illanes said, although some staffers privately say they feel SQM has been singled out by the media and the government because of the Pinochet links in a country where his 1973-1990 military rule remains divisive.
Senior staff said Ponce, though previously active as chairman, is no longer involved in day-to-day operations.
If SQM could convince investors to look beyond the overhang of Ponce, the illicit donations and the government dispute, SQM could see more of its value unlocked, analysts say. Shares are already up nearly 60 percent this year as hopes of an electric vehicle boom have sent lithium prices rocketing.
SQM's reserves are "a tier one asset, the Saudi Arabia of lithium," said Morningstar analyst David Wang. But, he added, as long as the arbitration remains unresolved, SQM's shares are still too risky to recommend. Analysts average a "hold" recommendation on the company, at least in part because of the legal worries.
Partly in response to such concerns, Patricio de Solminihac, a company veteran installed as chief executive in March 2015, has been keen to improve corporate governance and implement a strategy of diversification, company documents show.
SQM is "betting strongly" on higher value, next generation products - for instance, specialty fertilizers, solar salts that allow solar projects to stay operational after dark, or battery grade lithium compounds, product executive Carlos Diaz said in an interview.
Expansion via partnerships or takeovers will focus on early stage projects rather than larger, established concerns, Illanes said.
"We will engage in projects where we can be at the very beginning of the cost curve," he said, citing SQM's recently announced plan to develop a lithium project in Argentina with a Canadian miner.
The company also says it has raised its productivity an average 20 percent by bringing in McKinsey consultants who have championed a more collaborative management style.
Workers say they are encouraged to speak up in daily meetings more reminiscent of Japanese firms than the more typically top-down Latin American approach.
"When we first had the dialogues, no one would talk. But now we have all taken on responsibility," said Nelson Valdivia, an operator at SQM's key nitrates plant at Coya Sur, which towers over the company-owned town of Maria Elena.
The guest books at the whitewashed house where VIPs stay when they visit Coya Sur in the remote Atacama desert say a lot about the history of SQM, and Chile.
In the early 1970s, the then state-run company was visited by Cuban leader Fidel Castro and international filmmakers keen to document the socialist government of Salvador Allende. Entries end abruptly on Sept. 10, 1973, the day before Pinochet took control of Chile in a bloody coup.
More recent entries reveal the visits of a swathe of other mining companies, including representatives from state-run copper firm Codelco.
They have been to visit to SQM as they look to learn lessons on improving productivity, SQM executives said. (Reporting by Rosalba O'Brien; Editing by Christian Plumb and Kieran Murray)