(Bloomberg) -- SQM has been asked to resubmit a compliance plan for extracting brine from a salt flat in northern Chile, a process on which its lithium expansion plans depend.
The world's No. 2 producer of the battery metal has 15 business days to address technical observations related to the impact of removing the solution from the Atacama salt pan and its system for monitoring pumping levels, environmental agency SMA said in a document dated Aug. 19.
The process relates to charges that SQM had overdrawn brine, which led to a $25 million compliance plan that was approved by the SMA in 2019 but then blocked by a court in a win for indigenous and environmental activists. The SMA's resolution last week includes observations from the Toconao community and grants a request by the Socaire community to also be party to the sanctioning process, said Cristobal De La Maza, who heads the agency.
While probably just a minor setback in a years-long process, the SMA's requests underscore heightening scrutiny of the environmental and social impact of producing materials needed for the clean-energy transition.
SQM has laid out plans to reduce its use of fresh water and brine pumping rates even as it expands output to cater to an expected tripling of demand in a rechargeable battery boom.
“We received comments from the authority on the presentation we made last October, so now it's up to us to deliver the proposal with the requested improvements,” said the Santiago-based company formally known as Soc. Quimica & Minera de Chile SA.
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