Tuesday, December 31, 2019

Water Use in Atacama Salt Flat Trips Up Chilean Lithium Miner - Bloomberg Environment

Lithium producer SQM could face millions in fines after a Chilean court rejected its plan to reduce the amount of water the company extracts from the Salar de Atacama, an environmentally sensitive salt flat in the north of the country.

In a Dec. 26 ruling, Chile’s First Environmental Court based in Antofagasta upheld an appeal by indigenous communities living near the salt flat that a compliance plan presented by the mining company was insufficient to remedy the issues identified by environmental authorities.

Santiago-based SQM and U.S.-based Albemarle Corp. are investing to expand lithium production from northern Chile’s Salar de Atacama, the world’s richest lithium resource, to meet growing demand from the electric vehicle industry, which uses lithium-ion batteries.

However, SQM’s production technique, which involves pumping huge volumes of brine from beneath the salt flat’s crust into massive evaporation pools in order to extract the mineral, has been questioned for squeezing limited water supplies and reducing the environment of vulnerable species, such as the Chilean flamingo.

Company Considering Options

Under the $25 million plan, the largest ever approved by environmental enforcement agency Superintendencia del Medio Ambiente (SMA), SQM had agreed to reduce the volume of mineral-rich brine it extracts to below authorized levels to compensate for damage caused.

But court chairman Mauricio Oviedo, in the Dec. 26 ruling, said the company “failed to show that the actions and targets adopted were sufficient to contain or reduce the negative impacts generated through the company’s infractions in three of the six charges presented by SMA.”

SMA will now have to restart the sanction process—which could result in SQM having to present a stricter compliance plan—or the company could face multiple fines worth up to Chilean Peso 2.9 billion ($3.9 million) each. It also ultimately could risk the loss of its environmental license.

In a statement, SQM said it still believes the compliance plan “safeguards the protection of the environment,” and that it is studying possible legal action.

“In addition, the company is looking forward to its collaboration with the environmental authorities and incorporating the improvements pertinent to continuous strengthening of its environmental management system,” the company said.

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Water Use in Atacama Salt Flat Trips Up Chilean Lithium Miner - Bloomberg Environment
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