The output of SQM, the second largest lithium company in the world, is threatened. The local community in Chile has asked the authorities to suspend their operating permits.

According to media reports, the local community living near the (Atacama) Salt Beach in Atacama, Chile, has asked the authorities to suspend the Chilean lithium miner SQM's license for lithium mining in the Atacama Salt Lake, or significantly reduce the scale of its operation until SQM can submit a regulatory acceptable environmental compliance plan.

In 2016, Chile's environmental regulator SMA accused SQM of excessively pumping lithium-rich brine from (Salar de Atacama), the Atacama Salt Lake, a charge that forced SQM to draw up a $25 million remediation plan to bring its business into compliance. Chilean authorities approved the plan in 2019, but reversed the decision in 2020, requiring the company to restart a stricter plan.

The Atacama Aboriginal Council (CPA) reportedly submitted a letter to regulators last week. As SQM continues to operate, this continued development has destabilized the fragile environment of the desert salt flats, the letter said.

In its letter, the Atacama Indigenous Council noted that the ecosystem was "at constant risk" and called for "suspension" of environmental permits for SQM or, where appropriate, "reduction of brine and fresh water extraction (scale) from Atacama Salt Lake."

"our request is very urgent. (this is) based on the fragility of the Atacama Salt Lake environment, "Manuel Salvador (Manuel Salvatierra), president of the council, said in a letter.

Driven by the wave of new energy, the price of lithium materials continues to rise. The latest data from the International Energy Agency show that by 2030, only relying on existing and under construction lithium production projects, there will be a global lithium demand gap of about 50%.

SQM is the world's second-largest lithium producer, while SQM's salt lake assets in Atacama are the world's highest lithium concentration, largest reserves and most mature lithium salt lake, which is mainly developed by SQM and its competitor Abel (Albermale), and the region supplies nearly 1/4 of lithium to the world.

SQM recently told the media that it is pushing ahead with a new compliance program. "this is a normal part of the process, so we are studying these observations and hope to submit them this month."

Lithium is a key raw material for mobile phone and electric car batteries. In recent years, automakers, Chilean indigenous communities and environmental activists have become increasingly concerned about the environmental damage caused by Chilean lithium production.

Currently, SQM is increasing production in Chile to meet the fast-growing demand for lithium. Last year, the company announced a sustainable development plan to slash the use of terrestrial fresh water at all production facilities in the future, by 40 per cent by 2030 and 60 per cent by 2040.

In addition, SQM also decided to reduce brine extraction from salt lakes by 50 per cent by 2030. In the long run, SQM has the technology and technology to expand lithium carbonate production to nearly 200000 tons per year while significantly reducing brine extraction, the company said.