Exclusive: Lithium giant Albemarle slams Chile over 'unjust' withholding of Atacama study

SANTIAGO (Reuters) - Albemarle Corp, the world’s top lithium producer, has accused a Chilean regulator of “unjust” discrimination for refusing to make public a key report on the impact of mining on the Atacama salt flat, according to court filings.

FILE PHOTO: An aerial view shows the brine pools and processing areas of the Soquimich (SQM) lithium mine on the Atacama salt flat, the world's second largest salt flat and the largest lithium deposit currently in production, with over a quarter of the world's known reserves, in the Atacama desert of northern Chile, January 10, 2013. REUTERS/Ivan Alvarado

U.S.-based Albemarle in July last year asked to see the publicly funded report but regulator Corfo rejected the request after Chilean miner SQM, a top competitor, objected on grounds it contained confidential information. A government watchdog upheld the decision.

Both Albemarle and SQM - the only two lithium miners on the salt flat - contributed data to the report. But while SQM’s contract with the government allows it to review and comment on the study, Albemarle’s agreement does not.

Albemarle blasted that discrepancy in previously unreported arguments made before a Santiago appeals court in February, saying it resulted in “arbitrary, unjust, illegal, and above all, unconstitutional discrimination.” The company is appealing the watchdog’s decision and demanding the report be made public immediately.

The spat underscores rising tensions between Albemarle and regulators in the Andean nation over operations in the high-altitude Atacama flat, home to one-quarter of the world’s current supply of lithium.

Albemarle has for months also feuded with Corfo over royalty payments, and with another Chilean regulator over data used to determine its production quota.

The Atacama report and the true state of the flat’s environmental health has long been an obsession of lithium industry watchers because of the area’s huge importance in satisfying soaring global demand for the white metal, a vital component in the batteries that power electric vehicles.

Corfo told Reuters in a written statement that it had sent a final draft of the environmental study - meant to guide government regulation and oversight of the flat - to SQM for review on Feb. 16.

Corfo’s contract with SQM requires it offer the company the opportunity to comment, but the agency is not required to implement the company’s suggested changes.

The regulator said it would make the final draft public following SQM’s review “provided that any eventual affected third parties did not oppose its release.”

SQM did not immediately respond to a Reuters request for comment on the case. The Chilean miner has previously argued in filings that releasing the study would put it at a competitive disadvantage, and says it has adhered to the terms of its contract with Corfo.

Albemarle told Reuters in a statement that it wants the study made public immediately.

“This report... should be a contribution towards ensuring the sustainability of the Salar de Atacama,” the company said.

Lawmakers, academics, environmentalists, local communities, German carmaker Volkswagen and Chilean courts have all emphasized the importance of an environmental study to help dispel lingering questions on the impact of lithium mining in Chile.

Reporting by Dave Sherwood, editing by Adam Jourdan and Rosalba O’Brien