Mining in South America has led to numerous environmental injustices and economic exploitations during the long span of extraction in these regions. These incidents resulted in the formation of governmental and private groups to limit recurrences and sustain these countries’ environments and economies. An example of one governmental organization is Corfo (Corporación de Fomento de la Producción de Chile). This group was started by the Chilean government following the Chillán earthquake of 1939 and has played a major role in the development of Chile. Corfo’s mission is to strengthen the Chillán economy and society by promoting investment and innovation in technological and human capital. They oversee the development and implementation of extraction plans and coordinate with foreign mining corporations to ensure Chile benefits from these endeavors.
Both domestic and foreign mining companies have been heavily involved in extractivism in South America due to the significant portion of high-value minerals and commodities found in these countries. These companies are known to take leading roles in injustices committed against local communities and land. SQM (Sociedad Quimica y Minera) is a Chilean chemical company involved globally in various extraction endeavors; however, its focus is lithium with the company currently being the world’s largest lithium producer. SQM currently has numerous operations throughout the northern Chilean desert.
Many local communities have brought issues to the Chilean government regarding recent lithium extraction in their surrounding region. Local leaders have attempted to intervene in mining endeavors by means of lawsuits or local intervention. These lawsuits are attempts to limit future environmental and societal impacts that have been detrimental in the past to these communities. This document is the statement from Corfo and SQM regarding the limitations for mining that have been put in place due to lawsuits from local constituents in the Atacama Desert in northern Chile. The document outlines the cooperation and agreement between SQM and the government for mining to continue which will stimulate the Chilean economy.
“After a successful conciliation process, both parties signed the modifications to the lease and project contracts.
With the conciliation agreement and signing of the modification of the two contracts between Corfo and SQM, an extensive chapter of dispute and negotiations between both entities was closed. These are new rules for the mining company that must change the structure of its corporate governance, which will grant permanent guarantees of full compliance with the agreement and development of practices aligned with the standards of global companies and the OECD; increase the level of rental rents to match what is established in the Albemarle contract; establish the rights and protections for Corfo as owner of the Salar de Atacama; establish the highest standards for monitoring compliance with contracts and environmental regulations; contribute resources to the Antofagasta Region and local communities; significant contributions to research and development; reserve option of 25% of lithium production to sell in Chile aimed at adding value to lithium and the date of the current contract is not modified until the year 2030.
As was publicly reported on December 19, Corfo and SQM reached an agreement in principle on the basis of an eventual conciliation between both parties under certain conditions proposed by the Corporation. This Wednesday the signing that sealed that agreement for the exploitation of part of the Atacama Salt Flat was made at the Arbitration and Mediation Center of the Santiago Chamber of Commerce. The document was ratified by the State Defense Council and the Corfo Council.
The executive vice president of Corfo, Eduardo Bitran, reported that ‘the agreements signed with Albemarle and SQM will allow Chile to significantly expand the supply of lithium, facilitating the global development of electromobility, with the consequent positive effect on the low-emission copper industry.’ of CO2. Corfo has been successful with its commitment to establish the conditions that protect the public interest, thus helping to restore the confidence of citizens in the institutions of the Republic’.
‘Environmental sustainability will benefit from this agreement, since it establishes an overseer on environmental issues, early termination conditions in case of serious breaches and a sustainable development plan for the salt flat basin with the participation of the communities and local government’, added the authority of Corfo.
In addition, during this period, an agreement was reached to expand the lithium supply with Albemarle and now with SQM, which will allow Chile to maintain world leadership in lithium supply, with a market share of more than 45%. Both agreements imply between 2017 and 2030 additional income for the State and the communities of around US$ 12 billion.
Eduardo Bitran added that ‘these agreements ensure ample resources for the State, the regions, the municipalities and the communities; they reinforce Corfo’s position in our Salar de Atacama and its environmental sustainability; they reinforce the corporate governance of the main Chilean company in non-metallic mining and, most importantly, they ensure Chile’s leadership position in the copper and lithium industry that comes with electromobility’.”
CORFO. CORFO-SQM sign conciliation agreement and contract modification. CORFO Online. 2020. https://www.corfo.cl/sites/Satellite?c=C_NoticiaNacional&cid=1476721192410&d=Touch&pagename=CorfoPortalPublico/C_NoticiaNacional/corfoDetalleNoticiaNacionalWeb.