SQM’s representatives told Fastmarkets the
steps the company is taking to improve the sustainability of
its operations in Chile.
In the Salar de Atacama Desert, SQM produces potassium
chloride and lithium chloride; the latter is refined into
battery-grade lithium compounds at SQM´s chemical plant
near Antofagasta port, in northern Chile.
Lithium is a key ingredient in the manufacturing of
batteries for electric vehicles (EVs) and energy storage
systems (ESSs), and lithium demand for both uses is expected to
soar in the coming years alongside the shift to a greener
In December 2019, the
Chilean environmental court of Antofagasta voided
SQM’s environmental compliance program (PdC)
which was previously approved in January 2019 by the
Superintendencia de Medio Ambiente (SMA), the Chilean
The decision upheld complaints from a few indigenous
communities in the Salar de Atacama region which objected the
SQM’s PdC approved earlier that year.
Complaints from indigenous communities and environmental
groups focused on the New York-listed company's use of water
for its operations.
In early August, the SMA withdrew its appeal process against
the decision of the Antofagasta court.
As things stand, SQM is working with the environmental
authorities to develop a new PdC.
Until a new plan is agreed, SQM is implementing all the
measures committed in the first plan presented to the SMA, it
SQM’s use of fresh water and the environmental
impact of its operations on the ecosystem of the western part
of the Salar de Atacama area 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 use more brine than we currently do. 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 already committed to reduce the amount of fresh
water we use in our operations notwithstanding that we are
already not a water-intensive operation." An SQM representative
"In the last three years, we have reduced our freshwater
footprint by 50% in the Salar de Atacama, while our chemical
plant in Antofagasta uses sewage water from the city that is
purified by SQM.
"In the same period, our production capacity went up from
48,000 MT per year to 70,000 MT per year." The same SQM
During the earnings call held on August 20 following the
release of the company’s
second-quarter financial results, SQM chief executive
officer Ricardo Ramos Rodriguez reiterated the
company’s commitment to increase its global market
share in the lithium market by boosting output of lithium
carbonate while reducing its production costs.
When asked about how the company achieved lower operating
costs, Rodriguez said: "Well, there are several factors that,
of course, affect our cost. One that is quite relevant is the
exchange rate with the Chilean peso. The Chilean peso has
depreciated when compared to last year which is, of course,
helping us on our cost."
"To give you an idea, approximately $400 million or $500
million of our total expenses per year are in Chilean pesos, so
that is quite a relevant part of the savings." Rodriguez
During the earnings call, Rodriguez reiterated that SQM is
committed to the protection of the environment in the Salar de
"Now we are working on modifications to the compliance plan
according to the comments of the environmental court. And we
hope and we are sure we are going to obtain all the necessary
approvals of the new plan in the coming months."he said.