SANTIAGO - As automakers race to a clean-energy future, Chile looked to be in the catbird seat.
Chile’s government, meanwhile, has been slow to allow new players to enter the market. And indigenous groups and activists are opposing new projects, worried about environmental impacts.Australia in 2017 surpassed Chile to become the world’s top lithium supplier. Neighboring Argentina is positioned to gain fast, with at least a dozen projects in the pipeline.
Santiago-based SQM saw its stock dive more than 6% on May 23 when it announced it would delay a planned expansion in Chile’s Atacama salt flat until the end of 2021. That project would allow the company to produce as much as 120,000 tonnes of lithium carbonate, more than double its current production.
These advantages have given Chile a roughly 20% share of global mine production for lithium, according to U.S. Geological Survey figures. That is down from a 36% share just 4 years ago. A government study last year found that more water and brine were leaving the system than coming back, prompting the government to announce new restrictions. That has led to increased scrutiny of water use by SQM and Albemarle on the flat.