Chile says to clamp down on water rights in lithium-rich Salar de Atacama

Wealth Minerals

23/08/2018 19:18

By Dave Sherwood  and Fabian Cambero
    SANTIAGO, Aug 23 (Reuters) - Chile is preparing major new
restrictions on the extraction of water from the lithium-rich
Salar de Atacama salt flats, home to top lithium miners
Albemarle  ALB.N  and SQM  SQM_pb.SN   SQMA.SN , the head of the
country's water authority told Reuters on Thursday.
    Water authority chief Oscar Cristi said in an exclusive
interview that regulators had placed a ban on the issuing of new
permits to extract water from the southernmost sector of the
Salar's watershed, known as C2, which is a key water supply for
BHP's  BHP.AX  Escondida copper mine, the world's largest, and
Antofagasta  ANTO.L 's Zaldivar mine.
    Cristi said the government had granted BHP and Antofagasta
permits to pump six times more water from the aquifer than the
resource could sustain, prompting the ban. BHP has since
proposed to cut water extraction from wells in C2 by more than
half, but Cristi said regulators still believed that rate to be
"insufficient."
    Chile's water chief said the agency was also preparing to
create a drinking water reserve nearer the core of the Salar,
adjacent to the operations of SQM and Albemarle, amid a spike in
demand for new water rights in the lithium-rich but water-poor
region.
    Lithium helps to fuel modern life. Lithium-ion batteries
power everything from electric cars and laptops to mobile
phones, and global demand for lithium is expected to quadruple
by 2025. Chile's Salar is home to one of the world's biggest
deposits of the metal, sometimes referred to as "white gold."
    It was not immediately clear what impact, if any, the new
restrictions will have on the two miners' operations.
    Both fresh- and saltwater are critical to the production of
lithium in the Atacama and have become a sticking point as local
indigenous groups, long-standing producers SQM and Albemarle,
regional copper miners and newcomers to the region all vie for
water in the world's most arid desert.
    "Once we've created the reserve, this water will no longer
be available and that could give us the legal right to establish
a restricted area," Cristi said.
    In a restricted area, only temporary, not permanent, rights
to extract water are granted, and water regulators closely
monitor use. Existing extraction permits would be unaffected,
Cristi said.
    Albemarle, the world's top lithium producer, and competitor
SQM together extract 37 percent of the world's lithium from
brine, or saltwater, that is pumped from beneath the parched
surface of the Salar de Atacama. 
    Increasing demand for water in the Salar and a lack of
understanding about how freshwater and lithium-rich saltwater
interact beneath the salt flat's surface had prompted the
restrictions, Cristi said.
    "In the end, saltwater is water," he said, adding that a
state study identifying the interactions between fresh and
saltwater was due by year's end.
    

 (Reporting by Dave Sherwood and Fabian Cambero
Editing by Ross Colvin)
 ((dave.sherwood@thomsonreuters.com; +56 9 9138 1047, +56 2 2370
4224; Reuters Messaging:
dave.sherwood.thomsonreuters.com@reuters.net))