How SQM is driving forward with green innovations to prepare for its lithium partnership with Codelco

Chilean lithium producer SQM is assessing technology and incorporating innovations to make its processes more efficient, and optimize water and energy use, ahead of the start of the joint venture it will form with state-owned miner Codelco between 2025 and 2060.

It is currently preparing to increase production at its Carmen plant in Antofagasta region, with output scheduled to reach 210,000t/y of lithium carbonate and 40,000t/y of lithium hydroxide.

This initiative is key to operational continuity in the Salar de Atacama, one of the largest lithium reservoirs in the world, where the public and private sector partnership will develop the Salar Futuro project to improve sustainability and include direct lithium extraction technology that will enable production to reach 280,000t/y of lithium carbonate in the next decade.

BNamericas talks to Gerson Salas, automation and energy manager at SQM, to find out more about the company's efforts ahead of its partnership with Codelco.

BNamericas: What are SQM's main strategies in its path towards automation and integration of technology?

Salas: We have an ambitious sustainability and carbon-neutrality plan, key to the value we want to deliver through our products. We're already a company with a low carbon footprint, but we will continue working on aspects such as reducing freshwater consumption in our processes.

We have projects to use seawater and are always seeking more efficient equipment. For instance, we're heavily involved in thermal processes, which have high fuel and electricity consumption. We're working to reduce these factors or transition towards green energies. In the near future, we aim to achieve a fully renewable energy matrix.

We're also renewing and converting several chemical processes in our plants to improve solution concentrations and use less water. In fact, we've already reduced water consumption in our processes by 30% and will continue to focus on this. We're convinced that mining must become more sustainable and that our value lies in delivering a greener product.

BNamericas: Regarding seawater use, will that be done through a supplier or will you develop your own plant?

Salas: We have a seawater pumping project in the planning stage, with the aim of having our own water source and so reduce consumption of freshwater.

BNamericas: SQM has incorporated electric trucks and buses. How will you continue advancing with fleet decarbonization?

Salas: Electromobility is a significant focus for us, and we aim to replace our entire fleet with electric vehicles, starting with the personnel transport fleets in the short term.

Additionally, we're piloting electric machinery to reduce emissions from forklifts, excavators, and bulldozers. We also believe we can capture 100% of the emissions generated by thermal systems by reprocessing and converting the processes.

BNamericas: In the context of the national lithium strategy, Codelco chairman Máximo Pacheco mentioned that direct extraction technologies will be incorporated after 2030. Are you piloting alternatives?

Salas: Yes, we're piloting technologies to validate certain operational conditions, such as equipment behavior with brine and performance verification. Efficiency is required.

As Pacheco mentioned, it’s very likely that industrial-scale use of these technologies will begin after 2030, particularly because these systems consume a lot of electricity and, as we know, Chile’s infrastructure and energy matrix are limited. Therefore, we're evaluating this as part of our environmental commitment and planning, but remain focused on our core business, which is lithium production.

BNamericas: Under the partnership with Codelco, it was proposed to increase lithium production from 170,000t/y in 2023 to 280,000t/y after 2030. How will you achieve this goal?

Salas: The partnership with Codelco will allow us to extend our existing contract with [development agency] Corfo from 2030 to 2060 and develop lithium for an additional 30 years in the salt flat. This involves process conversion, and we're evaluating solutions such as the Salar Futuro project. 

This year, we will increase production to 200,000t to meet the demand from electromobility and other markets.

BNamericas: Has SQM considered investing in the manufacturing of cathode materials or batteries?

Salas: SQM’s core focus is the extraction and production of raw materials, with lithium carbonate and lithium hydroxide as final products for development of batteries and other materials needed for the pharmaceutical market.

China has a significant lead in battery manufacturing, with automated companies that produce at high volumes and with much cheaper labor. 

Currently, competing with the Chinese market and achieving competitiveness is difficult, but not impossible. I believe Chile could have its own cathode or battery manufacturing industry in the medium to long term. However, our core business is different, similar to Australian companies that also focus on raw materials rather than battery production, which they do well and profitably.

BNamericas: What are your views on substitutes for lithium batteries, considering the development of sodium batteries and ongoing efforts to enhance their energy density?

Salas: As with any critical input, there will always be attempts to find substitutes, with researchers and companies seeking solutions or alternatives to open new markets. This is an emerging business, but nothing concrete exists yet, and for at least the next five to 10 years, I don't believe a substitute will match the energy density or storage capacity and discharge speed of lithium.

BNamericas: How do you manage safety in SQM’s chemical plants to avoid incidents like the lithium battery manufacturing plant fire in South Korea?

Salas: We have a risk mitigation plan for various potential hazards at both operational and product levels, as it is indeed a product that can become dangerous when in contact with other materials.

We always prioritize the protection of people and our workers. Our plants are designed with safety in mind, featuring high standards, risk control maps and preventive measures applicable to all areas.

BNamericas: How will you handle the increase in electricity rates in Chile starting in July?

Salas: We're not directly affected, as the increase applies to regulated clients. However, we have been working since last year to better manage resources and already have energy management certifications and an energy efficiency plan for both electrical and thermal consumption.

The impact will be seen later with adjustments in areas like infrastructure, tolls and others. The challenge is to work with technologies that allow for reduced electricity consumption without sacrificing efficiency and improving asset productivity.

BNamericas: SQM Lithium Ventures has invested in start-ups to identify new technological solutions, right? 

Salas: SQM is investing venture capital to seek innovations in lithium production and solutions aligned with sustainability, water and energy savings, and adding value to processes. This may involve conversion, modification or incorporation into some area of the industrial process. 

There is significant confidence in this new experience, providing capital for start-ups to develop their ideas and scale them to a larger level.

BNamericas: What trends emerged from the Gecamin Digital Mining Conference that took place July 3-5?

Salas: The event exceeded our expectations, with around 560 participants from academia and mining companies. It was a great opportunity to share experiences, best practices and knowledge from projects and successful cases.

The trend is focused on digitization, robotics and automation to achieve more sustainable mining, based on innovation. This is part of a digital transformation involving people, as training the workforce is crucial for implementing technologies in a unified manner.