Lithium producer SQM advances discussions with Indigenous communities on environmental issues
SQM representatives told Fastmarkets about the steps the company is taking to improve the sustainability of its operations in Chile.
In the Atacama Salar Desert, SQM produces potassium chloride and lithium chloride; the latter is refined into battery-grade lithium compounds at SQM’s chemical plant near the port of Antofagasta in northern Chile.
Lithium is a key ingredient in the manufacture of electric vehicle (EV) batteries and energy storage systems (ESS), and the demand for lithium for both uses is expected to increase in the coming years as the shift to a greener economy.
In December 2019, the Chilean Environmental Court of Antofagasta overturned SQM’s Environmental Compliance Program (PoC) which had previously been approved in January 2019 by the Superintendencia de Medio Ambiente (SMA), the environmental regulatory authority. Chilean.
The decision confirmed complaints from a few indigenous communities in the Salar de Atacama region who opposed the SQM PoC approved earlier that year.
Complaints from indigenous communities and environmental groups have focused on the New York-listed company’s use of water for its operations.
In early August, the SMA withdrew its appeal against the decision of the Antofagasta court.
As it stands, SQM is working with environmental authorities to develop a new PoC.
Until a new plan is agreed, SQM is implementing all the measures taken in the first plan presented to the SMA, he said.
SQM’s use of freshwater and the environmental impact of its operations on the ecosystem of the western part of the Salar de Atacama region were the main concerns raised by a number of indigenous communities.
“There will be no impact on our current lithium expansion plans, as we will not be using more brine than we are currently. By 2025, we aim to reach 150,000 metric tons (MT) of lithium carbonate per year – from the same amount of brine and at the same time we have already committed to reducing the amount of fresh water we use in our operations, even if we are already not a water hungry operation. A representative from SQM told Fastmarkets.
“Over the past three years, we have reduced our freshwater footprint by 50% in the Atacama Salar, while our Antofagasta chemical plant uses city wastewater which is purified by SQM.
“During the same period, our production capacity increased from 48,000 MT per year to 70,000 MT per year. The same representative from SQM said.
In the earnings call held on August 20 following the release of the company’s second quarter financial results, SQM Chairman and CEO Ricardo Ramos Rodriguez reiterated the company’s commitment to increasing its market share global market for lithium by increasing the production of lithium carbonate while reducing its production costs.
Asked how the company has been able to keep operating costs down, Rodriguez said, “Well, there are several factors that, of course, affect our costs. The one that is quite relevant is the exchange rate with the Chilean peso. The Chilean peso has depreciated against last year, which of course helps us with our costs. ”
“To give you an idea, about $ 400 million or $ 500 million of our total spending per year is in Chilean pesos, so that’s a pretty big part of the savings. Rodriguez added.
During the call for results, Rodriguez reiterated that SQM is committed to protecting the environment in the Salar d’Atacama.
“Now we are working on changes to the compliance plan based on comments from the environmental tribunal. And we hope and are sure that we will get all the necessary approvals of the new plan in the coming months, ”he said.