One of the world’s largest lithium producers got a crash course on why a company should strive to maintain good relations with the local population, as local indigenous communities shut down operations in protest over an agreement between Sociedad Química y Minera (SQM) (NYSE: SQM) and state-run Codelco.
SQM, the world’s second largest lithium producer behind Albemarle Corporation (NYSE: ALB) resumed operations at its Atacama salt flat lithium property on Monday after local indigenous communities blocked access.
The protest highlights a challenge to Chile’s plan to increase state control over the battery metal.
Yermin Basques, the head of the Toconao community, said that groups were obstructing public roads leading to mining operations in the southern part of the salt flat. The blockade prevented workers, supplies, and lithium from moving in or out.
This came nearly a month after Codelco and SQM agreed to roundtable discussions with indigenous communities regarding establishing a sustainability guarantee for the ecosystem that would work within the framework of the country’s National Lithium Strategy.
Codelco and SQM assert that the roundtable will acknowledge international treaties signed and ratified by the Chilean Government. This includes the International Labour Organization’s Convention 169.
Basques accused the government of excluding the council from the agreement.
The protesters were successful in extracting a promise from the government that involved increasing the involvement of the Atacama Indigenous Council in any mining agreements in the salt flat. A mining ministry official ended the protest over the weekend by pledging that President Gabriel Boric would visit the region.
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Indigenous protests on the rise in lithium triangle
This isn’t the first time lithium production has been curtailed due to protests.
Indigenous protests in the lithium triangle, encompassing regions in Chile, Argentina, and Bolivia, have been on the rise. These protests stem from concerns about the environmental impact of lithium extraction on their ancestral lands, as well as the lack of consultation in decision-making processes.
Many Indigenous communities in Jujuy lack property titles for their lands, but they possess the right to their ancestral territories as granted by Argentina’s 1994 constitution. It’s a mix of the land-grab aspect coupled with the environmental issues that have caused the unrest.
Northern Argentina hosts a total of 38 lithium mining projects, with three already in operation. The region predominantly houses lithium beneath salt flats in the form of brine.
Companies need to drill to access the subterranean deposits. Subsequently, they pump the brine to the surface, directing it into artificial ponds. The lithium then evaporates and then is extracted through a sequence of chemical processes.
In 2022, the country’s lithium exports grew by 235 per cent. Since then the newly elected President, Javier Milei, has committed to advancing the sector.
Some companies operating in the triangle are working towards minimizing their environmental impact.
Argentina Lithium and Energy (TSXV: LIT) (FSE: OAY3) (OTCQX: LILIF) presents another example of a positive environmental approach. The company acknowledges that the mining business bears responsibility for the well-being of the communities surrounding its operations.
For example, Lithium South Development Corporation (TSXV: LIS) (OTCQB: LISMF) (Frankfurt: OGPQ) finalized an Environmental Baseline Study for the Hombre Muerto North Lithium Project (HMN Li Project) in Salta, Argentina in 2022.
The company conducted an in-field survey, gathering data on flora, fauna, hydrology, and climate in project-affected areas during the rainy season.
Lithium South Development Corporation is a sponsor of Mugglehead news coverage
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