SQM slapped by Chilean environmental court ruling
Dec. 27, 2019 10:41 AM ET|About: Sociedad Química y Minera d... (SQM)|By: Carl Surran, SA News Editor
Lithium producer Sociedad Quimica y Minera (SQM -1.1%) is lower after Chile's First Environmental Court upheld a complaint by indigenous communities in the Atacama Desert about the company's use of water.
The court ruled SQM's compliance plan, which had been presented in response to a multi-year investigation by Chile's SMA environmental regulator that found the miner had overdrawn lithium-rich brine, was "insufficient,"
The decision could jeopardize SQM's $400M plan to expand its lithium carbonate production plant to help meet demand for the battery metal.
Water has become a key sticking point for expansion plans of SQM and rival Albemarle, both of which operate in the salt flats of Atacama, the world's driest desert.
Chile lithium miner SQM dealt blow by environmental court ruling
Court points to 'particular fragility' of Atacama desert's ecosystem in reaching its decision.
26 Dec 2019
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A Chilean environmental court has upheld a complaint by indigenous communities in the country's northern Atacama Desert about the use of water by SQM, the world's second-largest producer of lithium.
The decision by the First Environmental Court in the nearby city of Antofagasta calls into jeopardy SQM's $400m plan to expand its lithium carbonate production plant to feed appetite for the ultralight battery metal.
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Water has become a key sticking point for the expansion plans of both SQM and top competitor Albemarle, both of which operate in the salt flats of the Atacama, the world's driest desert, which supplies more than one-third of the global supply of lithium, a key ingredient in the batteries that power electric vehicles.
Soaring lithium demand has raised questions about whether Chile's arid northern desert can support current and future levels of lithium production along with the needs of sprawling nearby copper mines, a booming tourism industry and indigenous communities.
The court ruled that a compliance plan presented by SQM in response to a multi-year investigation by Chile's SMA environmental regulator that found the miner had overdrawn lithium-rich brine was "insufficient".
The plan included a new online system to monitor extraction rates of brine, which holds lithium in suspension, and the shutting down of one of its freshwater wells.
The court said its decision was based on a "precautionary principle", taking into account the "particular fragility" of the Atacama's ecosystem and the "high level of scientific uncertainty" about the behaviour of its water table. It said SQM had no way of proving that the measures it had proposed were capable of "containing and reducing or eliminating the negative effects generated by the breaches of the company".
"We must protect sensitive ecosystems even more when they constitute the ancestral habitat of our native peoples whom the State of Chile is obliged to protect," the court president, Mauricio Oviedo, said in a statement.
The complaint was brought by indigenous people living in surrounding communities of Peine and Camar, and the Indigenous Advisory Council of Atacameno People.
The SMA must now resume its sanctioning of SQM for the original infractions, the court said, which could involve fines of more than $3m, the closure of its operations or revocation of its environmental permits.
Neither SQM nor the SMA could immediately be reached for comment.
SOURCE: REUTERS NEWS AGENCY
DECEMBER 31, 2019 / 6:02 AM / UPDATED 12 HOURS AGO
Chile mining activity, copper production fall in November amid protests
SANTIAGO (Reuters) - Chilean mining activity fell 7.1% in November, government data showed on Tuesday, plagued in part by operational issues at major mines during a tumultuous month of protests, road and port blockades and worker strikes in the South American nation.
The world’s top copper producer reported that production of the metal fell 6.7% in November from the same month a year earlier to 504,366 tonnes. Government statistics agency INE noted the fall in mining activity was in part due to an unfavorable basis of comparison, a reflection of strong production the previous November.
Chile’s vast copper mines largely maintained production and kept operations running normally through early November, amid the brunt of unrest, though there have been isolated incidents at some operations and uncertainty lingers.
Chile´s Codelco COBRE.UL, the world’s top copper miner, and BHP (BHP.AX), which owns the sprawling Escondida copper mine, both reported increases in output in October despite riots that threw much of the country into chaos. November production figures for the mines are expected in early January.
But Chile´s Antofagasta (ANTO.L), another of the world´s top copper miners, warned in November of larger than anticipated impacts on output from the Chile protests.
Chilean manufacturing production CLMFG=ECI in November surprised analysts, jumping 3.2 percent compared with the same month the previous year, according to government data, bucking predictions of a sharper drop in output.
The unexpected increase was driven primarily by a year-on-year rise in the production of chemical products, INE said.
Protests in Chile have led to at least 26 deaths and billions in losses to private businesses and public infrastructure. The prolonged demonstrations and sometimes violent riots and looting prompted the central bank last week to slash forecasts for growth, investment and demand through 2020.