In Chilean desert, global thirst for lithium is fueling a 'water war'

Wealth Minerals

29/08/2018 12:00

By Dave Sherwood 
    SANTIAGO, Aug 29 (Reuters) - On Chilean water regulator
Oscar Cristi's desk, a small white espresso cup teeters atop
piles of documents and loose folders that appear on the point of
collapse, perhaps an apt metaphor for the growing water crisis
in parts of the Andean country.
    Sitting in his eighth-floor office adjacent the presidential
palace, Cristi, a PhD economist, lays out a map of Chile showing
key watersheds for mining. Swaths of the mineral-rich north are
colored blue, denoting areas where aquifers are over-exploited.
    Soon, if Cristi gets his way, they will be red, meaning new
water rights will be banned.
    Reams of water rights were granted by Chilean governments
over decades with little consideration for their cumulative
impact as miners scrambled to stake claims on the small pockets
of water available in the salt flats of the Salar de Atacama.
    The Salar sits in the world's driest desert. The water
trapped beneath the salt pan feeds the world's biggest copper
mine and holds in suspension more than one-third of the world's
current supply of lithium, the ultra-light metal used in
electric car batteries, mobile phones and lap-tops.
    With demand for water growing in a region economically vital
to the country, Cristi is now taking steps to rein in usage. But
there is a problem. No one really knows how much water is there.
Cristi said Chilean development agency Corfo, which helps
oversee lithium extraction in the Salar, hopes to provide a
better picture in a study due in December.
    "The state has been very reluctant to draw up bans on water
extraction," said Cristi, who was only recently appointed head
of the water authority. "We want to take much more diligent
approach in decreeing prohibited areas."
    Cristi did not say why past governments had been hesitant to
declare bans.
    In Chile, threats of a government crackdown on over-usage of
water often ring hollow. Mines need water, and the country´s
copper-driven economy needs mines. A sweeping overhaul of
Chile's dictatorship-era water code proposed in 2014 has
languished in Congress, slowed by intense lobbying by industry.
    Now though, the mining industry is paying close attention to
 Cristi. Earlier this month his agency imposed a rare ban on new
permits to extract water from an aquifer that is a critical
water supply for BHP´s Escondida, the world´s largest copper
mine. 
    The agency is also preparing to create a drinking water
reserve nearer the operations of top lithium producers SQM and
Albemarle that would allow the government to further restrict
water use there.  urn:newsml:reuters.com:*:nL2N1VE10K
    SQM and Albemarle say they have all the water rights they
need and do not expect new restrictions to impact their current
or future production of lithium.  urn:newsml:reuters.com:*:nL2N1VF0VZ
    
    'WATER WAR' 
    A global boom in demand for lithium has set off a scramble
in Chile, which is home to nearly 50 percent of the world's
reserves of the metal. 
    Local indigenous groups, SQM and Albemarle, regional copper
miners and newcomers to the region are all competing for water.
    "What we have is a water war in the salt pan. There's a huge
crush on water and nowhere to get it from," said Alonso Barros,
an attorney with the Atacama Desert Foundation, an NGO that
works with indigenous groups in the region.
    SQM and Albemarle both recently signed deals with the
government to sharply increase their quotas for extracting
lithium from the Salar, although they say they will not use any
more water than they have already been granted. Newcomers like
Wealth Minerals, New Energy Metals, and Lithium Chile have also
announced projects in the salt flats.
    Wealth Minerals, New Energy Metals and Lithium Chile did not
immediately respond to requests for comment.
    
    DATA DROUGHT
    On a computer screen, Cristi scrolls through a spreadsheet
showing row upon row of water rights granted decades ago in the
southernmost sector of the Salar - totaling six times more than
the government now believes available - with little more than
each company's own data to support their sustainability.
    Past governments did not adequately map how much water is
available, says Cristi. Now monitoring wells are being installed
in some areas, but base line data is still lacking.
    "Our (understanding) continues to be limited now, but back
then, it was very limited," he said.
    The cumulative impact of water rights granted over the years
to copper and lithium miners in the world's most arid desert has
never been considered, according to Ingrid Garces, a professor
who studies salt flats at Chile's University of Antofagasta.
    "We're managing lithium as though it were a type of
hard-rock mining," said Garces. "But we're mining water, not
rock. This is a watershed." 
    Take too much water from one place, she says, and it may
impact another, comparing it to sucking water from a glass with
a syringe.
    "Even if you're drawing from just one area, the whole is
still reduced," she said.
    Sorting out the water crisis at Atacama is complicated by a
lack of data, but also a jurisdiction issue. 
    The brine from which miners extract lithium is water, but in
Chile, it is regulated as a mineral like copper or iron.
Environmental regulators handle permits for brine, while the
water authority permits freshwater pumping. 
    A lack of communication between the two, combined with a
lack of understanding about how freshwater and brine interact
beneath the Salar, has left authorities hamstrung, says Cristi.
    "There may be an imbalance that we're not accounting for,"
he said.   

 (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))