German automakers Daimler and Volkswagen have launched a new study that pushes their sustainability target more towards lithium mining in Chile ahead of an expected electric vehicle boom. This has been considered a sign of growing supply chain concerns.
Chile’s Atacama salt flat is considered the biggest source of supply of the ultralight battery metal in South America. The region is home to lagoons inhabited with rare flamingos, a booming tourism industry, and an ancient indigenous culture, the residents and environmental groups have been showing worries about the potential damage to a regional ecosystem due to concerns relating to sustainability. It has also long plagued the miners in the Atacama’s who extract metal from the world’s driest desert.
Early this year, German development agency GIZ and the public-private Fundacion Chile met chief of top Chilean environmental regulator SMA, Cristóbal De La Maza, to formally present plans for the study project driven by Daimler and Volkswagen that reads that the growing importance of lithium batteries is the key priority for these companies due to sustainability.
Pressure is mounting on German carmakers to meet rising stringent anti-pollution regulation by European Union. Volkswagen has staked $91 billion towards its future plan to mass-produce EV. That has prompted increased scrutiny of mining practices around key metals that are expected to see a spike in demand in coming years.
The work has already begun as commissioned by Daimler and Volkswagen that includes talks with regulators, miners, and local communities. This is aimed at developing a joint plan of action to address concerns about sustainability for Chile’s, lithium mining hot spot.
In December, a Chilean environmental court have called out the Atacama ecosystem fragile and warned of high level of scientific uncertainty. The water usage in the region is also an important issue and sticking point for both the plans, Albemarle and SQM to boost output from Chile and help meet demand.