Top Lithium Miner Seeks to Monitor Water Scarcity in Chile

The world's top lithium miner Albemarle (ALB) quietly submitted an application of December last year to monitor and assess the state of Atacama groundwater flows as the salt flat water scarcity of Chile, and ALB has been warned by local residents and the court.

The previously unreported move shows an indication of how important it is for mining companies to prove that the supply for automotive battery materials known as "white gold" is sustainable. They are fighting for automakers who are preparing for the upcoming electric car revolution. Auto companies have stepped up their scrutiny of Atacama Salt Lake, which is by far the largest supply source in South America.

Albemarle's Chile manager Lenny-Pessagno said a team from Germany's biggest car maker Volkswagen - which expects to produce 1.5 million electric autos by 2025 - visited the Atacama last month to scope out the social and environmental impact of mining operations there.

An anonymous source confirmed that Volkswagen recently went to Chile to check on local conditions. The "water battle" in Chile's salt flats is intensifying. Residents and environmental groups are concerned that mining of lithium and copper is destroying the region's ecosystems.

Chilean judges sided with local indigenous people. In December last year, a judge rejected a Chilean Mining and Chemicals (SQM) environmental restoration plan and warned that Atacama's ecosystem is very fragile and may cause the water scarcity.

For Albemarle, the world's largest lithium producer, resolving the water issue was a "business decision," Lenny-Pessagno said, adding that the company was willing to work with other miners on the issue, including rival SQM.

"Whatever happens to the salar will ultimately impact our business," she said, confirming a two-year monitoring plan to gain a more complete understanding of the issue. Car manufacturers need lithium to be extracted from high-salt brines. Where may surfer the water scarcity in the driest deserts.

Last week, BHP Billiton cancelled its plan to continue pumping water from the Atacama basin to feed its massive Escondida copper mine, the world’s largest. It said it would use desalinated water instead. Lenny-Pessagno said Albemarle's near-term focus will be on developing technology to extract more from the brine.

She confirmed plans to open La Negra III and IV processing plants in Chile by next year, thereby increasing the company's capacity in the country to 85,000 tons. Last May, Albemarle announced a project to increase its lithium capacity by 30% without extracting more brine.

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