Navigating the trade-offs between global benefits of decarbonization and localized impacts of lithium mining operations
By Emily Haworth
Boasting experimental floating solar panels, South America’s only solar-thermal project, and a recent commitment to complete, industry-wide carbon neutrality by 2050, Chile has made commendable progress in renewable energy investments and energy security in the last decade. A rapid and calculated transition from fossil fuels to renewable energy is critical in the face of the climate crisis, but the process has exposed some of the nuanced issues of mining the key materials needed to build lithium-ion batteries used for energy storage and powering electric vehicles (EVs). With Chile positioned on one of the largest known lithium deposits, it is critical to address whether the expansion of renewable energy battery storage necessitates the exploitation of lithium and how mining operations affect local communities and ecosystems.
Chile’s renewable energy transformation
Initiating the growth spurt of the country’s renewable energy market, Chile’s Non-Conventional Renewable Energy Law mandated a non-conventional renewable energy target (which includes hydropower under 20MW), in order to reach 20% renewable energy by 2025, an ambitious goal for a country that had a meager 5% renewable energy input in 2013. Several years before the initial target deadline, Chile’s renewable energy mix is up to 20% in 2019. In light of their successes and the upcoming COP25, President Sebastián Piñera pledged in early June of 2019 to close eight of the country’s 28 coal-fired plants by 2024 to kickstart a plan to completely decarbonize the country by 2050.
This plan, while ambitious, is far from impossible. Years of policy work, historic electricity auctions, geographic advantages leading to exceptional solar and wind potential, and a recently issued sovereign green bond for US$1.4 billion are paving the way for Chile’s success. Additionally, ACCIONA and Google’s solar PPA highlights that corporate customers and the voluntary market see Chile’s immense potential for renewable energy procurement.
In 2017, a US$700 million investment enabled the interconnection of its Northern and Central electric grid system. This connection of the country’s two largest grids has created ample space for the nation’s growing renewable energy market, and now constitutes the country’s National Electric System which serves more than 97% of Chileans at an installed capacity of 24,000 MW. Increasing Chile’s grid continuity is allowing the country’s northern solar energy production to flow to the center of the country where most of the residential energy demand is located.
Projections and concerns of the lithium rush
Chile’s extensive lithium deposits may prove crucial to global renewable energy storage development. Situated on the “Lithium Triangle,” a massive lithium deposit that passes through Argentina, Chile, and Bolivia and is estimated to have 54% of all known lithium resources on the planet, the Salar de Atacama basin within the Atacama Desert itself has been identified as the largest single source of lithium. As one of the hottest and driest landscapes on Earth, it is ideal for the evaporation ponds necessary to extract lithium from the salt flat. However, indigenous communities are concerned that the rapid expansion of lithium-ion battery development will increase the demand for mining in Chile to the degree of irreversible water contamination and infringement on indigenous group’s rights.
Current projections estimate that by 2025, lithium demand will increase fivefold. Chile is charging ahead with electric vehicles, having the most electric buses of any other Latin American country. With lithium demand skyrocketing, navigating the balance between the global benefits of transitioning to renewable energy and the adverse local consequences of lithium mining is a complex venture.
The process of lithium extraction includes pumping water up from the aquifers below, exposing lithium pools on the surface that evaporate and leave the solid form available for extraction. This requires 200 million liters of water for each tonne of lithium extracted, which is an issue since very little is known about the watersheds of the isolated area and just how much water is left.
Lithium mining in indigenous communities
Protests are erupting in Argentina’s salt flats where lithium exploration has been advancing for several years. The main concerns of aboriginal communities are the environmental consequences of mining, water contamination, the exploitation of land, and the absence of consultation prior to excavation.
The same concerns reverberate in Chile. Just two companies have been legally permitted to mine lithium in the Atacama: SQM and Albemarle. Communities are gravely concerned for the safety of the aquifers that support their daily life, the local flora, and the longevity of their communities, especially since SQM has been reported for overdrawing from the aquifer. Not only is their land being exploited, but the indigenous communities are seeing very little benefit from the lithium exploration.
The Washington Post reviewed mining contracts and reported that one operation in Argentina generated around US$250 million in sales a year, while the local community would receive somewhere between US$9,000 to US$60,000 for extensive surface and water rights. The lack of proper payment for environmental damage is causing major rifts between industry and the Atacameños community, occurrences that will increase as mining ventures expand to meet solar storage demand.
No panacea quite yet
The tradeoffs between global decarbonization and the environmental, physical, and cultural impacts on marginalized communities from mining operations needs to be at the forefront of the conversation of the energy transformation. As countries wean themselves off fossil fuels, it is critical to recognize that mining for the sake of progressing renewable energy technology development is not inherently “green,” and needs to be monitored and assessed the same as any other environmentally intensive industry.
Rapid decarbonization is the ultimate goal in the face of the climate crisis. However, work needs to be done to ensure that mining industries have strict oversight and preventative measures in place. Corporate entities seeking renewable energy procurement need to be keenly aware of these nuanced issues while navigating the voluntary renewable energy market that is just beginning in Chile.
Emily Haworth is a Green-e Verification Associate at Center for Resource Solutions.
