Chilean regulators reject Albemarle's plans to boost lithium output
(Adds response from Albemarle Corp)
By Dave Sherwood
SANTIAGO, Nov 13 (Reuters) - Chilean environmental
regulators have rejected plans by Albemarle Corp, the
world's top lithium producer, to expand output from the Salar de
Atacama salt flat, according to filings with Chile's
Environmental Assessment Service (SEA).
SEA said in a resolution on Monday that Albemarle's
environmental impact statement, which included plans to build a
new plant to produce 42,500 tonnes of lithium carbonate in
northern Chile, lacked key information to gauge the project's
impact, prompting an "early termination" of its review.
"The applicant does not present the details
necessary to rule out significant adverse impacts on the
quantity and quality of renewable natural resources, including
the soil, water and air," the regulator concluded in the Nov. 12
resolution, which was first reported by Reuters.
The regulator said Albemarle also failed to adequately
consider threats to the Peruvian tern, an endangered species of
bird that inhabits the region.
Albemarle's expansion has been closely scrutinized by
regulators in Chile, who have increasingly cracked down on water
use by both copper and lithium miners in the Salar de Atacama,
which lies at the heart of the world's driest desert.
The company filed the environmental impact statement in
September, detailing plans to build the new plant near the
northern Chilean coastal port of Mejillones, as well as six new
solar evaporation pools in the salar, which lies close to the
border with Bolivia and Argentina.
Albemarle has told both regulators and investors the
upgrades would boost output without using more lithium-rich
brine, or saltwater, from the environmentally sensitive salt
The September plan modified Albemarle's original Phase 3
plant expansion project, whose environmental impact assessment
was approved in 2017, according to the Monday filing.
Albemarle Chief Executive Luke Kissam said in an earnings
call last week that the Phase 3 and 4 projects were proceeding
according to plan, but said the company had frozen engineering
work on subsequent Phase 5 and 6 projects.
In an emailed response to Reuters, Albemarle said this
week's decision pertained to its Phase 5 and 6 projects, "which
we already announced is on hold during last week's earnings
Monday's filing rejecting Albemarle's environmental impact
statement did not appear to reference the Phase 5 or 6 projects.
It was not immediately clear why there was a discrepancy between
the regulatory filing and Albemarle's response.
The company has five days to appeal the decision, SEA said
in its resolution.
Plans by Albemarle and top competitor SQM
to expand production at the Salar de Atacama are
deemed critical to maintaining global supply amid spiking demand
for lithium, a key ingredient in batteries that power everything
from cell phones to electric vehicles.
Howard Klein, a lithium analyst and partner with New
York-based RK Equity, said the regulatory decision suggested
brine-based lithium suppliers would continue to face hurdles in
"From a market point of view, this should be positive for
lithium prices," Klein said. "But ultimately, this is a reminder
that brines are environmentally, technically and geopolitically
In September, Chile's nuclear commission, which oversees the
sales and export of lithium in Chile, denied Albemarle's request
for an additional increase to its production quota for the
ultralight battery metal. The commission said Albemarle had
failed to adequately explain how it would increase production
without extracting more brine.
(Reporting by Dave Sherwood; Editing by Marguerita Choy and
First Published: 2018-11-13 14:34:39
Updated 2018-11-13 23:56:27
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