SQM receives environmental approval for Chile lithium plant expansion

SANTIAGO – Chilean lithium miner SQM on Thursday received environmental approval to expand its lithium carbonate production plant, the local environmental regulator told Reuters, marking a milestone as the company seeks to boost output of the coveted ultralight battery metal.

The $400 million plant expansion, once complete, would allow the Chinese-backed SQM to eventually produce as much as 180,000 tonnes of lithium carbonate a year from its Atacama salt flat operations in Chile. 

SQM is the world’s number two producer of lithium, a key component in the batteries that power electric vehicles, cell phones and other consumer goods. China’s Tianqi Lithium Corp bought a stake in the firm last year.

SQM CEO Ricardo Ramos earlier this week said he expected the expansion, if approved, would come online “in the future,” but did not specify a date. SQM has previously said it hopes to be able to produce 120,000 tonnes annually by 2020, nearly double its current capacity of 70,000 tonnes.

Water has become a key sticking point for the expansion plans of both SQM and top competitor Albemarle, both of which operate in the Atacama desert, the world’s driest. Soaring lithium demand has raised questions about whether the Atacama salt flat can support current and future levels of production.

SQM vice president Alejandro Bucher said in a statement that he believed the plant expansion approved on Thursday would contribute to sustainable development of the region.

“One of the most relevant benefits of this project is the optimization of water use for production,” Bucher said.

(Reporting by Dave Sherwood and Fabian Cambero Editing by Alistair Bell and James Dalgleish)