Latest news with #SergioCubillos
The Guardian
5 days ago
- General
- The Guardian
Mining companies are pumping seawater into the driest place on Earth. But has the damage been done?
Vast pipelines cross the endless dunes of northern Chile, pumping seawater up to an altitude of more than 3,000 metres in the Andes mountains to the Escondida mine, the world's largest copper producer. The mine's owners say sourcing water directly from the sea, instead of relying on local reservoirs, could help preserve regional water resources. Yet, this is not the perception of Sergio Cubillos, leader of the Indigenous community Lickanantay de Peine. Cubillos and his fellow activists believe that the mining industry is helping to degrade the region's meagre water resources, as Chile continues to be ravaged by a mega-drought that has plagued the country for 15 years. They also fear that the use of desalinated seawater cannot make up for the devastation of the northern Atacama region's sensitive water ecosystem and local livelihoods. Water extraction has caused water table levels to drop, endangering springs, wetlands and surface water sources that support biodiversity and are vital for local crops and livestock. 'Several wetlands have dried up completely, and the vegetation has diminished considerably,' says Cubillos. The community of Peine lies within a salt flat, where a delicate ecological balance makes the region highly vulnerable to any changes in climate. Cubillos says mining has exacerbated the effects of the climate crisis, severely depleting the community's groundwater reserves. 'The mining activity has made the area unsuitable for cattle grazing.' The mega-drought is considered the most prolonged and widespread in a century, and the local population and mining companies are fighting for the right to water in the Atacama desert, the driest place on Earth, where the world's largest copper and lithium deposits are located. The lack of rainfall has had profound effects on Chile's water resources, agriculture and ecosystems and is severely depleting its freshwater reserves in the Atacama region. Even mining operations have occasionally been forced to stop due to water shortages. In December, Escondida's majority owner, the Australian mining firm BHP, the US-based Albemarle and Chilean firm Zaldívar were ordered to pay an unprecedented $47m fine (£34.5m) for depleting the Monturaqui-Negrillar-Tilopozo aquifer and damaging surrounding vegetation. The environmental court of Antofagasta ruled that the damage caused by the three companies 'negatively affects the Indigenous community of Peine, altering their systems of life and traditions'. It ruled that the companies had exceeded the legally permitted limits on groundwater extraction, resulting in a decline of the water table by more than 25cm – an unsustainable amount for the salt flat ecosystem, according to the court. Chile's water authority had already raised concerns in 2018 over Escondida's water extraction. In 2022 Escondida appealed an $8.4m fine for non-compliance over this issue, but it was rejected. The environmental court's decision came after a negotiated agreement between the Indigenous community, the Chilean government and the companies involved. The fines are earmarked for environmental remediation, which in some cases includes investment in desalination. The mining sector is increasingly turning to the sea. About 30% of the water used by Chile's mines now comes from seawater – desalinated or untreated – according to the national mining association. BHP says it has invested $4bn (£2.94bn) in desalination infrastructure in recent years. As a result, the company says, it ceased extracting water from the Peine wetland in 2019. Its desalination plant in the coastal city of Coloso, about 170km (105 miles) from the mine, is the largest in Chile by capacity. 'The company's first desalination plant opened in 2006, underscoring our pioneering role in the mining sector,' BHP says. Albemarle has also told the Guardian that it no longer uses groundwater from the reserve in its operations. 'While our company has never been a major water user in the area, this step is part of our long-term sustainability efforts on the Atacama salt flat,' the company's communications manager says. Albemarle has further clarified that the use of seawater to remediate environmental damage is not included in the formal agreement by the court, though its website highlights ongoing investments in desalination. Zaldívar has declined to comment. Sign up to Global Dispatch Get a different world view with a roundup of the best news, features and pictures, curated by our global development team after newsletter promotion Cubillos, who took part in the negotiations, acknowledges the shift. 'It's positive that companies have stopped exploiting groundwater reserves,' he says. 'However, the desalinated water does not reach our lands.' The three companies that the court found responsible for depleting Peine's groundwater produce roughly half of Chile's copper and a third of its lithium. Mining accounts for about a fifth of Chile's gross domestic product, and minerals – particularly copper and lithium, which are essential for the global green transition – are the country's main exports. Chile supplies about 13% of the copper and 80% of the lithium carbonate and refined lithium imported into the EU. Lithium is critical for electric vehicle batteries, while copper underpins most renewable energy technologies and infrastructure. The global green transition is projected to substantially increase demand for copper and lithium. For Chile, this implies escalating water requirements for mining operations. Despite advances in desalination, mining remains a major consumer of fresh water, accounting for about 50% of regional reserves in the north. Chile's ministry of mining projects that total consumption of water will go up by about 20% by 2034. Desalination and transporting seawater inland also come with environmental costs. These are energy-intensive processes, and studies forecast that CO2 emissions from Chile's desalination plants could reach up to about 700,000 tonnes of CO2 equivalent annually by 2030 – about the same as Antigua and Barbuda. Only a small share of these plants operate on renewable energy, according to Sebastián Herrera-León, an assistant professor at the University of O'Higgins. 'Currently, desalination plants in Chile are powered by the national grid, which draws from both fossil fuels and renewables,' he says. He identifies two ways forward: either desalination plants must integrate dedicated renewable energy sources, or the national energy grid must complete its transition to renewables. Desalination may also transfer environmental risks from the desert to the ocean. In Antofagasta, a coastal town in northern Chile near where Escondida's desalination plant and port are located, local fishers have already noticed changes. 'Fish populations are dying. Escondida's port has long polluted the sea, and the desalination plant makes things worse,' says fisher Nelson Fornerod Gutiérrez, 82. Marine biologist Elizabeth Soto of the NGO Terram says that brine discharge from desalination poses a threat to aquatic biodiversity. 'Improved spatial planning is essential for desalination plant siting. Constructing facilities along the entire coastline without accounting for environmental impacts is unsustainable,' she says. Mining companies own 17 of Chile's 24 operational desalination plants, with more planned along the Pacific coast. About 75% of the country's desalination capacity serves the mining sector. While desalinated seawater has eased pressure on dwindling inland sources, the Indigenous community of Peine remains wary. The damage may already be irreversible, they fear, damaging the salt flats and their waters, which are as vital as they are sacred to the Lickanantay people. 'We continue to resist mining companies,' says Cubillos, 'to assert that our Indigenous culture and worldview remain alive.'
The Guardian
5 days ago
- General
- The Guardian
Mining companies are pumping seawater into the driest place on Earth. But has the damage been done?
Vast pipelines cross the endless dunes of northern Chile, pumping seawater up to an altitude of more than 3,000 metres in the Andes mountains to the Escondida mine, the world's largest copper producer. The mine's owners say sourcing water directly from the sea, instead of relying on local reservoirs, could help preserve regional water resources. Yet, this is not the perception of Sergio Cubillos, leader of the Indigenous community Lickanantay de Peine. Cubillos and his fellow activists believe that the mining industry is helping to degrade the region's meagre water resources, as Chile continues to be ravaged by a mega-drought that has plagued the country for 15 years. They also fear that the use of desalinated seawater cannot make up for the devastation of the northern Atacama region's sensitive water ecosystem and local livelihoods. Water extraction has caused water table levels to drop, endangering springs, wetlands and surface water sources that support biodiversity and are vital for local crops and livestock. 'Several wetlands have dried up completely, and the vegetation has diminished considerably,' says Cubillos. The community of Peine lies within a salt flat, where a delicate ecological balance makes the region highly vulnerable to any changes in climate. Cubillos says mining has exacerbated the effects of the climate crisis, severely depleting the community's groundwater reserves. 'The mining activity has made the area unsuitable for cattle grazing.' The mega-drought is considered the most prolonged and widespread in a century, and the local population and mining companies are fighting for the right to water in the Atacama desert, the driest place on Earth, where the world's largest copper and lithium deposits are located. The lack of rainfall has had profound effects on Chile's water resources, agriculture and ecosystems and is severely depleting its freshwater reserves in the Atacama region. Even mining operations have occasionally been forced to stop due to water shortages. In December, Escondida's majority owner, the Australian mining firm BHP, the US-based Albemarle and Chilean firm Zaldívar were ordered to pay an unprecedented $47m fine (£34.5m) for depleting the Monturaqui-Negrillar-Tilopozo aquifer and damaging surrounding vegetation. The environmental court of Antofagasta ruled that the damage caused by the three companies 'negatively affects the Indigenous community of Peine, altering their systems of life and traditions'. It ruled that the companies had exceeded the legally permitted limits on groundwater extraction, resulting in a decline of the water table by more than 25cm – an unsustainable amount for the salt flat ecosystem, according to the court. Chile's water authority had already raised concerns in 2018 over Escondida's water extraction. In 2022 Escondida appealed an $8.4m fine for non-compliance over this issue, but it was rejected. The environmental court's decision came after a negotiated agreement between the Indigenous community, the Chilean government and the companies involved. The fines are earmarked for environmental remediation, which in some cases includes investment in desalination. The mining sector is increasingly turning to the sea. About 30% of the water used by Chile's mines now comes from seawater – desalinated or untreated – according to the national mining association. BHP says it has invested $4bn (£2.94bn) in desalination infrastructure in recent years. As a result, the company says, it ceased extracting water from the Peine wetland in 2019. Its desalination plant in the coastal city of Coloso, about 170km (105 miles) from the mine, is the largest in Chile by capacity. 'The company's first desalination plant opened in 2006, underscoring our pioneering role in the mining sector,' BHP says. Albemarle has also told the Guardian that it no longer uses groundwater from the reserve in its operations. 'While our company has never been a major water user in the area, this step is part of our long-term sustainability efforts on the Atacama salt flat,' the company's communications manager says. Albemarle has further clarified that the use of seawater to remediate environmental damage is not included in the formal agreement by the court, though its website highlights ongoing investments in desalination. Zaldívar has declined to comment. Sign up to Global Dispatch Get a different world view with a roundup of the best news, features and pictures, curated by our global development team after newsletter promotion Cubillos, who took part in the negotiations, acknowledges the shift. 'It's positive that companies have stopped exploiting groundwater reserves,' he says. 'However, the desalinated water does not reach our lands.' The three companies that the court found responsible for depleting Peine's groundwater produce roughly half of Chile's copper and a third of its lithium. Mining accounts for about a fifth of Chile's gross domestic product, and minerals – particularly copper and lithium, which are essential for the global green transition – are the country's main exports. Chile supplies about 13% of the copper and 80% of the lithium carbonate and refined lithium imported into the EU. Lithium is critical for electric vehicle batteries, while copper underpins most renewable energy technologies and infrastructure. The global green transition is projected to substantially increase demand for copper and lithium. For Chile, this implies escalating water requirements for mining operations. Despite advances in desalination, mining remains a major consumer of fresh water, accounting for about 50% of regional reserves in the north. Chile's ministry of mining projects that total consumption of water will go up by about 20% by 2034. Desalination and transporting seawater inland also come with environmental costs. These are energy-intensive processes, and studies forecast that CO2 emissions from Chile's desalination plants could reach up to about 700,000 tonnes of CO2 equivalent annually by 2030 – about the same as Antigua and Barbuda. Only a small share of these plants operate on renewable energy, according to Sebastián Herrera-León, an assistant professor at the University of O'Higgins. 'Currently, desalination plants in Chile are powered by the national grid, which draws from both fossil fuels and renewables,' he says. He identifies two ways forward: either desalination plants must integrate dedicated renewable energy sources, or the national energy grid must complete its transition to renewables. Desalination may also transfer environmental risks from the desert to the ocean. In Antofagasta, a coastal town in northern Chile near where Escondida's desalination plant and port are located, local fishers have already noticed changes. 'Fish populations are dying. Escondida's port has long polluted the sea, and the desalination plant makes things worse,' says fisher Nelson Fornedod Gutiérrez, 82. Marine biologist Elizabeth Soto of the NGO Terram says that brine discharge from desalination poses a threat to aquatic biodiversity. 'Improved spatial planning is essential for desalination plant siting. Constructing facilities along the entire coastline without accounting for environmental impacts is unsustainable,' she says. Mining companies own 17 of Chile's 24 operational desalination plants, with more planned along the Pacific coast. About 75% of the country's desalination capacity serves the mining sector. While desalinated seawater has eased pressure on dwindling inland sources, the Indigenous community of Peine remains wary. The damage may already be irreversible, they fear, damaging the salt flats and their waters, which are as vital as they are sacred to the Lickanantay people. 'We continue to resist mining companies,' says Cubillos, 'to assert that our Indigenous culture and worldview remain alive.'
Japan Times
08-04-2025
- Business
- Japan Times
As Chile revs up lithium plans, Indigenous people demand more control
Chile's Indigenous communities in the lithium-rich Atacama Desert are in talks with two of the nation's biggest miners to gain more influence over plans to increase extraction of the battery metal, according to the companies and community sources. The negotiations with Chile's state-run Codelco, the world's biggest copper producer, and Chilean lithium producer SQM, come as the companies are close to finalizing a partnership that will mark the state's entry into production of the metal that is crucial for electric vehicle batteries. The talks to craft a so-called "governance" plan began in March and are expected to conclude by year-end. They follow a dialogue begun last year in which the companies explained the joint venture, and community representatives laid out their concerns. Both sides say their goal is to create a model that will give Indigenous Atacama groups, also known as Lickanantay, an active role in the new venture in a salt flat that sweeps across one of the planet's driest places, where people have lived for thousands of years. "We have invited them to work together on a governance model that effectively recognizes and considers the perspectives and visions of the Lickanantay communities ... in the decision-making processes of the new company," Codelco and SQM said in a joint statement. The companies described the potential system as "unprecedented" in Chile, adding that it would comply with international treaties on Indigenous rights. A flamingo at the Chaxa Lagoon at the Atacama salt flat in San Pedro de Atacama, Chile, on March 18 | REUTERS In visits to five Indigenous towns in the Andean foothills above the salt flats, community leaders emphasized the need to hold SQM and Codelco accountable to their environmental pledges, particularly to limit water use. "The idea ... is that it's not just the company deciding what to do in our territory," said Sergio Cubillos, community leader of Peine, which overlooks the vast Atacama basin that provides a quarter of the world's lithium supply. Giving Indigenous groups a seat at the table could potentially crimp profits if it were to lead to costlier environmental standards. At the same time, an agreement could appeal to global buyers that are increasingly focused on ethical mining to meet shareholder demands, and help avert protests. The mining sector views protests in Panama in 2023, which led the government to shut down the First Quantum Minerals copper mine, as a cautionary tale. "The companies have realized that interrupting production obviously has a damaging effect," said Yermin Basques, leader of the Toconao community. One option for a new framework would be regular dialogue with company decision-makers, such as board members, Basques said. Francisco Mondaca stands by a water collection pool used to provide drinking water for animals in Tambillo at the Atacama salt flat in San Pedro de Atacama, Chile, on March 19. | REUTERS "This would let us participate in the discussion on how the technological extraction process will work, how we will safeguard the water supply, how we will develop extraction with less environmental impact," he said. Getting a board seat is not the goal, he noted, as the communities do not seek a voice in business decisions. Dialogue with Codelco and SQM had at times been tense, Basques added, but the two sides were now working together, in part because the firms recognized the need for community support after protests snarled SQM logistics last year. "We have specific knowledge of our territory, of our water. And we have the power to close the salt flat if needed." Clock ticking Codelco and SQM said that talks would continue this year, building on dozens of meetings last year with Atacama groups. Their joint venture, in which Codelco will have 50% plus one share of control over SQM's Atacama operations, is slated to go into effect in the second half of the year, pending regulatory approvals. An advisor for the Atacama Indigenous Council (CPA), which comprises 18 communities, said that the council was reviewing early-stage proposals for the governance model, including one put forth by Codelco and SQM, but declined to provide details. A wetland in San Pedro de Atacama, Chile, on March 19 | Reuters The companies declined to provide their proposal, citing the ongoing process. The advisor said council representatives will meet with Codelco and SQM every couple of weeks for the next two or three months as they hammer out a final proposal. Each community will then discuss the plan internally, before representatives agree on a definitive version with Codelco and SQM, expected in the second half of the year, the advisor said. Codelco and SQM plan to raise lithium output by as much as 33% through 2060. The goal is part of a tectonic change in Chile's lithium sector after leftist President Gabriel Boric announced plans in 2023 to shift to a state-led model, spearheaded by Codelco, and committed to prioritizing Indigenous rights. Some community leaders say they feel a sense of urgency to reach an agreement with Codelco and SQM while Boric is still in office through March of next year, concerned that a successor could shake up the country's lithium strategy and veer away from Boric's pro-Indigenous stance. A drone view shows the Atacama salt flat in San Pedro de Atacama, Chile, on March 18. | REUTERS Some lawmakers, from a range of parties, have criticized the Codelco-SQM deal, concerned over whether the agreement was in Chile's best interest. Most presidential hopefuls from opposition parties have yet to outline their stance on lithium mining. By law, Boric cannot run for a second consecutive term. "We have to hurry up, because we don't know what could happen next year," said Basques, the Toconao leader. Veteran conservative politician Evelyn Matthei, who currently leads early presidential polls, said in a statement from her office that she supports mining development, wants to boost Chile's lithium production, and aims to benefit all people including Indigenous communities. Chile's Mining Ministry declined to comment on the Codelco-SQM venture. New model Chile has the world's largest proven reserves of lithium, U.S. Geological Survey data shows, and is the second-largest producer behind Australia. While some Indigenous groups in Canada and Australia have taken a bigger role in environmental management, such practices are rare in Latin America, experts say. SQM shareholders, as well as customers focused on environmental, social and governance (ESG) risks, such as European automakers, are likely to view an Indigenous agreement as positive for SQM, said Seth Goldstein, an analyst at Morningstar Research Services. The San Roque of Peine church in the village of Peine located on the perimeter of the Atacama salt flat in San Pedro de Atacama, Chile, on March 18 | REUTERS "Dialogue allows SQM an easier path to keep its operations going," he said. SQM already runs Indigenous outreach programs, including working groups, complaint channels, joint environmental monitoring and cooperation agreements. In some communities, the company has installed solar panels, provided dental care and offered agricultural training. SQM's efforts follow best practices for community relations, according to a 2023 audit by the Initiative for Responsible Mining Assurance (IRMA), an evaluation process favored by EV manufacturers to ensure supply chain transparency. Still, the audit found that SQM still had work ahead to overcome years of distrust. Winder Flores, who grew up in the town of Talabre and now helps his aging mother make cheese and wool crafts in Tambillo near the edge of the Atacama salt flat, is conscious of what's at stake. "We want the miners to guarantee that there will be no pollution, that our water supply will not run out," he said, as his herd of goats and llamas roamed in one of the rare grassy areas of the desert, nourished by a freshwater spring. "We're not against the country's development, but we do want to be part of it, and not be left with nothing."
Yahoo
07-04-2025
- Business
- Yahoo
Exclusive-As Chile revs up lithium plans, Indigenous people demand more control
By Daina Beth Solomon SALAR DE ATACAMA, Chile (Reuters) - Chile's Indigenous communities in the lithium-rich Atacama Desert are in talks with two of the nation's biggest miners to gain more influence over plans to increase extraction of the battery metal, according to the companies and community sources. The negotiations with Chile's state-run Codelco, the world's biggest copper producer, and Chilean lithium producer SQM, come as the companies are close to finalizing a partnership that will mark the state's entry into production of the metal that is crucial for electric vehicle batteries. The talks to craft a so-called "governance" plan began in March and are expected to conclude by year-end, Reuters learned exclusively. They follow a dialogue begun last year in which the companies explained the joint venture, and community representatives laid out their concerns. Both sides say their goal is to create a model that will give Indigenous Atacama groups, also known as Lickanantay, an active role in the new venture in a salt flat that sweeps across one of the planet's driest places, where people have lived for thousands of years. "We have invited them to work together on a governance model that effectively recognizes and considers the perspectives and visions of the Lickanantay communities ... in the decision-making processes of the new company," Codelco and SQM said in a joint statement to Reuters. The companies described the potential system as "unprecedented" in Chile, adding that it would comply with international treaties on Indigenous rights. In visits by Reuters to five Indigenous towns in the Andean foothills above the salt flats, community leaders emphasized the need to hold SQM and Codelco accountable to their environmental pledges, particularly to limit water use. "The idea ... is that it's not just the company deciding what to do in our territory," said Sergio Cubillos, community leader of Peine, which overlooks the vast Atacama basin that provides a quarter of the world's lithium supply. Giving Indigenous groups a seat at the table could potentially crimp profits if it were to lead to costlier environmental standards. At the same time, an agreement could appeal to global buyers that are increasingly focused on ethical mining to meet shareholder demands, and help avert protests. The mining sector views as a cautionary tale protests in Panama in 2023 that led the government to shut down the First Quantum Minerals copper mine. "The companies have realized that interrupting production obviously has a damaging effect," said Yermin Basques, leader of the Toconao community. One option for a new framework would be regular dialogue with company decision-makers, such as board members, Basques said. "This would let us participate in the discussion on how the technological extraction process will work, how we will safeguard the water supply, how we will develop extraction with less environmental impact," he said. Getting a board seat is not the goal, he noted, as the communities do not seek a voice in business decisions. Dialogue with Codelco and SQM had at times been tense, Basques added, but the two sides were now working together, in part because the firms recognized the need for community support after protests snarled SQM logistics last year. "We have specific knowledge of our territory, of our water. And we have the power to close the salt flat if needed." CLOCK TICKING Codelco and SQM told Reuters that talks would continue this year, building on dozens of meetings last year with Atacama groups. Their joint venture, in which Codelco will have 50% plus one share of control over SQM's Atacama operations, is slated to go into effect in the second half of the year, pending regulatory approvals. An advisor for the Atacama Indigenous Council (CPA), which comprises 18 communities, told Reuters that the council was reviewing early-stage proposals for the governance model, including one put forth by Codelco and SQM, but declined to provide details. The companies declined to provide their proposal to Reuters, citing the ongoing process. The advisor said council representatives will meet with Codelco and SQM every couple of weeks for the next two or three months as they hammer out a final proposal. Each community will then discuss the plan internally, before representatives agree on a definitive version with Codelco and SQM, expected in the second half of the year, the advisor said. Codelco and SQM plan to raise lithium output by as much as 33% through 2060. The goal is part of a tectonic change in Chile's lithium sector after leftist President Gabriel Boric announced plans in 2023 to shift to a state-led model, spearheaded by Codelco, and committed to prioritizing Indigenous rights. Some community leaders say they feel a sense of urgency to reach an agreement with Codelco and SQM while Boric is still in office through March of next year, concerned that a successor could shake up the country's lithium strategy and veer away from Boric's pro-Indigenous stance. Some lawmakers, from a range of parties, have criticized the Codelco-SQM deal, concerned over whether the agreement was in Chile's best interest. Most presidential hopefuls from opposition parties have yet to outline their stance on lithium mining. By law, Boric cannot run for a second consecutive term. "We have to hurry up, because we don't know what could happen next year," said Basques, the Toconao leader. Veteran conservative politician Evelyn Matthei, who currently leads early presidential polls, said in a statement from her office to Reuters that she supports mining development, wants to boost Chile's lithium production, and aims to benefit all people including Indigenous communities. Chile's Mining Ministry declined to comment on the Codelco-SQM venture. NEW MODEL Chile has the world's largest proven reserves of lithium, U.S. Geological Survey data show, and is the second-largest producer behind Australia. While some Indigenous groups in Canada and Australia have taken a bigger role in environmental management, such practices are rare in Latin America, experts say. SQM shareholders, as well as customers focused on environmental, social and governance (ESG) risks, such as European automakers, are likely to view an Indigenous agreement as positive for SQM, said Seth Goldstein, an analyst at Morningstar Research Services. "Dialogue allows SQM an easier path to keep its operations going," he said. SQM already runs Indigenous outreach programs, including working groups, complaint channels, joint environmental monitoring and cooperation agreements. In some communities, the company has installed solar panels, provided dental care and offered agricultural training. SQM's efforts follow best practices for community relations, according to a 2023 audit by the Initiative for Responsible Mining Assurance (IRMA), an evaluation process favored by EV manufacturers to ensure supply chain transparency. Still, the audit found that SQM still had work ahead to overcome years of distrust. Winder Flores, who grew up in the town of Talabre and now helps his aging mother make cheese and wool crafts in Tambillo near the edge of the Atacama salt flat, is conscious of what's at stake. "We want the miners to guarantee that there will be no pollution, that our water supply will not run out," he said, as his herd of goats and llamas roamed in one of the rare grassy areas of the desert, nourished by a freshwater spring. "We're not against the country's development, but we do want to be part of it, and not be left with nothing."
Reuters
07-04-2025
- Business
- Reuters
Exclusive: As Chile revs up lithium plans, Indigenous people demand more control
SALAR DE ATACAMA, Chile, April 7 (Reuters) - Chile's Indigenous communities in the lithium-rich Atacama Desert are in talks with two of the nation's biggest miners to gain more influence over plans to increase extraction of the battery metal, according to the companies and community sources. The negotiations with Chile's state-run Codelco, the world's biggest copper producer, and Chilean lithium producer SQM, come as the companies are close to finalizing a partnership that will mark the state's entry into production of the metal that is crucial for electric vehicle batteries. The talks to craft a so-called "governance" plan began in March and are expected to conclude by year-end, Reuters learned exclusively. They follow a dialogue begun last year in which the companies explained the joint venture, and community representatives laid out their concerns. Both sides say their goal is to create a model that will give Indigenous Atacama groups, also known as Lickanantay, an active role in the new venture in a salt flat that sweeps across one of the planet's driest places, where people have lived for thousands of years. "We have invited them to work together on a governance model that effectively recognizes and considers the perspectives and visions of the Lickanantay communities ... in the decision-making processes of the new company," Codelco and SQM said in a joint statement to Reuters. The companies described the potential system as "unprecedented" in Chile, adding that it would comply with international treaties on Indigenous rights. In visits by Reuters to five Indigenous towns in the Andean foothills above the salt flats, community leaders emphasized the need to hold SQM and Codelco accountable to their environmental pledges, particularly to limit water use. "The idea ... is that it's not just the company deciding what to do in our territory," said Sergio Cubillos, community leader of Peine, which overlooks the vast Atacama basin that provides a quarter of the world's lithium supply. Giving Indigenous groups a seat at the table could potentially crimp profits if it were to lead to costlier environmental standards. At the same time, an agreement could appeal to global buyers that are increasingly focused on ethical mining to meet shareholder demands, and help avert protests. The mining sector views as a cautionary tale protests in Panama in 2023 that led the government to shut down the First Quantum Minerals copper mine. "The companies have realized that interrupting production obviously has a damaging effect," said Yermin Basques, leader of the Toconao community. One option for a new framework would be regular dialogue with company decision-makers, such as board members, Basques said. "This would let us participate in the discussion on how the technological extraction process will work, how we will safeguard the water supply, how we will develop extraction with less environmental impact," he said. Getting a board seat is not the goal, he noted, as the communities do not seek a voice in business decisions. Dialogue with Codelco and SQM had at times been tense, Basques added, but the two sides were now working together, in part because the firms recognized the need for community support after protests snarled SQM logistics last year. "We have specific knowledge of our territory, of our water. And we have the power to close the salt flat if needed." CLOCK TICKING Codelco and SQM told Reuters that talks would continue this year, building on dozens of meetings last year with Atacama groups. Their joint venture, in which Codelco will have 50% plus one share of control over SQM's Atacama operations, is slated to go into effect in the second half of the year, pending regulatory approvals. An advisor for the Atacama Indigenous Council (CPA), which comprises 18 communities, told Reuters that the council was reviewing early-stage proposals for the governance model, including one put forth by Codelco and SQM, but declined to provide details. The companies declined to provide their proposal to Reuters, citing the ongoing process. The advisor said council representatives will meet with Codelco and SQM every couple of weeks for the next two or three months as they hammer out a final proposal. Each community will then discuss the plan internally, before representatives agree on a definitive version with Codelco and SQM, expected in the second half of the year, the advisor said. Codelco and SQM plan to raise lithium output by as much as 33% through 2060. The goal is part of a tectonic change in Chile's lithium sector after leftist President Gabriel Boric announced plans in 2023 to shift to a state-led model, spearheaded by Codelco, and committed to prioritizing Indigenous rights. Some community leaders say they feel a sense of urgency to reach an agreement with Codelco and SQM while Boric is still in office through March of next year, concerned that a successor could shake up the country's lithium strategy and veer away from Boric's pro-Indigenous stance. Some lawmakers, from a range of parties, have criticized the Codelco-SQM deal, concerned over whether the agreement was in Chile's best interest. Most presidential hopefuls from opposition parties have yet to outline their stance on lithium mining. By law, Boric cannot run for a second consecutive term. "We have to hurry up, because we don't know what could happen next year," said Basques, the Toconao leader. Veteran conservative politician Evelyn Matthei, who currently leads early presidential polls, said in a statement from her office to Reuters that she supports mining development, wants to boost Chile's lithium production, and aims to benefit all people including Indigenous communities. Chile's Mining Ministry declined to comment on the Codelco-SQM venture. NEW MODEL Chile has the world's largest proven reserves of lithium, U.S. Geological Survey data show, and is the second-largest producer behind Australia. While some Indigenous groups in Canada and Australia have taken a bigger role in environmental management, such practices are rare in Latin America, experts say. SQM shareholders, as well as customers focused on environmental, social and governance (ESG) risks, such as European automakers, are likely to view an Indigenous agreement as positive for SQM, said Seth Goldstein, an analyst at Morningstar Research Services. "Dialogue allows SQM an easier path to keep its operations going," he said. SQM already runs Indigenous outreach programs, including working groups, complaint channels, joint environmental monitoring and cooperation agreements. In some communities, the company has installed solar panels, provided dental care and offered agricultural training. SQM's efforts follow best practices for community relations, according to a 2023 audit by the Initiative for Responsible Mining Assurance (IRMA), an evaluation process favored by EV manufacturers to ensure supply chain transparency. Still, the audit found that SQM still had work ahead to overcome years of distrust. Winder Flores, who grew up in the town of Talabre and now helps his aging mother make cheese and wool crafts in Tambillo near the edge of the Atacama salt flat, is conscious of what's at stake. "We want the miners to guarantee that there will be no pollution, that our water supply will not run out," he said, as his herd of goats and llamas roamed in one of the rare grassy areas of the desert, nourished by a freshwater spring. "We're not against the country's development, but we do want to be part of it, and not be left with nothing."
