SANTIAGO (Reuters) – Chile is preparing major new restrictions on the extraction of water from the lithium-rich Salar de Atacama salt flats, home to top lithium miners Albemarle and SQM SQM_pb.SN, the head of the country’s water authority told Reuters on Thursday.
Water authority chief Oscar Cristi said in an exclusive interview that regulators had stopped issuing new permits to extract water from the southernmost sector of the Salar’s watershed, known as C2, which is a key water supply for BHP’s Escondida copper mine, the world’s largest, and Antofagasta’s Zaldivar mine.
Cristi said the government had granted BHP and Antofagasta permits to pump six times more water from an aquifer at Atacama than it could sustain, prompting the ban. BHP has since proposed to cut water extraction from wells in C2 by more than half, but Cristi said regulators still believed that rate to be “insufficient.”
“We’re evaluating this case and others where over-exploitation is taking place, to try to work with them to reach a voluntary agreement, and if not … to reduce their extraction,” Cristi said, adding that the government planned to issue new prohibitions in other areas in northern Chile shortly.
Cristi said the water authority was analyzing a recent amendment to the Chilean water code that would allow the regulator to unilaterally reduce extraction rates in areas where over-exploitation is taking place.