World's Second Largest Lithium Produce SQM Contemplates Alternatives After Court Ruling

SQM, the world´s #2 lithium producer, said Friday it “regrets” a decision by a Chilean environmental court that it must be prosecuted over excessive water use in the nation´s northern Atacama Desert.

SQM mentioned in a statement that it was contemplating whether to take a further legal step over the finding by the First Environmental Court within the close by metropolis of Antofagasta, which supported a complaint by indigenous populations bordering SQM´s operations.

The court ruling calls into jeopardy SQM´s $400 million program to increase its lithium carbonate production facility to meet an appetite for the ultralight battery metal.

Water has turned into a critical sticking point for the growth plans of both SQM and top competitor Albemarle, each function in the salt flats of the Atacama, which offer a third of the worldwide supply of lithium required for the batteries that power EVs.

Hovering demand for lithium has raised questions on whether Chile´s deserts can assist current and future levels of production together with the needs of relaxing nearby copper mines, a booming tourism industry, and indigenous communities.

The courtroom ruled that a compliance plan offered by SQM in response to a multi-year inquiry by Chile´s SMA environmental regulator that discovered the miner had overdrawn lithium-rich brine.

The program included a new online system to observe extraction rates of brine, which holds lithium in suspension and the closure of one of its freshwater wells.

The court docket read its verdict took account of the “particular fragility” of the Atacama´s ecosystem and the “high level of scientific skepticism” about the behavior of its water table.