I'm REALLY getting excited about the recent Reuters story on SQM...

I'm REALLY getting excited about the recent Reuters story on SQM and ALB.

2 massive points:

-These 23 dead trees, maybe a lot more? (and UN-reported by SQM) are a MASSIVE sign that Atacama has a REAL water supply issue.
-SQM/ALB are/were both also OVER pumping BRINE.

I know we talk a lot about over supply not being a concern and post many articles about new EV numbers but, this is REAL data and could change things BIG time.

The Atacama Salar in Chile is the biggest Lithium producer of high quality BG LCE in the world.
Investors have been conned by the investment banks into telling you that SQM/ALB can flip a switch and increase production 50-100% over the next 5-8 years.

These 23 dead trees are proof that that's probably not going to happen.
There's just NOT enough water on Atacama.

Even if they somehow get past these water issues, which is highly unlikely. They'll get hit with penalties for OVER pumping and I now believe THIS is the reason the Chilean government recently denied permits to ALB. It's very doubtful they'll be allowed to INCREASE production.

The article is a MUST MUST read if your a Lithium investor or thinking about becoming one.
This is the turning point for Lithium stocks IMO.
I also believe this is a massive plus for ARG lithium producers and it's BEST Salars.

We've ALL did the math on future demand and EVs.
Joe Lowry recently announced some figures publicly too...
If you take 40 Kg as the avg. amount EVs will have and many including myself think that's a lowball figure for future EVs. Then look and 5-30% EV penetration rates worldwide (remember China/India will lead the world.)
You''ll need a lot of Lithium.
(This also isn't including Home battery's and GRID battery's, EV buses, EV bikes etc.)

This Atacama water and illegal over pumping situation by SQM and ALB could dramatically affect supply issues to a EXTREME...Doing what to the price of LCE...I do not know. However, with massive amounts of supply taken out of the sales channel...you aren't going to see the price of ANY Lithium go down.

ARG is the place to be and will be the main beneficiaries as ARG salars are right behind Atacama in production.

I'll re-post the highlights below.


IMO
DYOR!!


https://fingfx.thomsonreuters.com/gfx/rngs/CHILE-LITHIUM/010080VB1MH/index.html

Lithium miners’ dispute reveals water worries in Chile’s Atacama desert
By Dave Sherwood

But a Reuters review of filings with Chile’s environmental regulator shows Albemarle striking a different tone.
In the filings, which have not been previously reported, Albemarle voices concern about a 2016 investigation by Chilean authorities that found over a period of several years SQM sucked up more of the lithium-rich brine from beneath the Salar than its permits allowed.

In a March 2017 filing, for example, Albemarle said it was critical for the authorities to determine how much SQM had overdrawn because that could affect the availability of brine for other projects.
That filing came a month after Eduardo Bitran, who was then head of Chile’s state development agency, Corfo, raised similar concerns about the amount of brine SQM had been drawing and other infractions. In a letter to the environmental regulator, Bitran wrote that SQM’s actions pose a “severe risk” to the ecosystem of the Salar and its brine reserves.
Chile’s environmental regulator, however, has said SQM made changes to how it monitors wells without authorization, making it difficult to track the impact of SQM’s pumping on brine supplies.

SQM has not confirmed overdrawing brine. But over nearly two years it has filed four plans with regulators to bring its operations back into line with environmental approvals, which, among other things, specify how much brine SQM can pump. The first three plans were returned to SQM by regulators for further revisions; the latest, filed in September, has yet to receive a response.

Meanwhile, SQM has accused Albemarle of overdrawing brine at its mine and questioned in a filing whether its rival’s actions could have repercussions on the availability of brine reserves in the Salar. Albemarle declined comment when asked by Reuters whether that was correct.

Hydro-geologists and environmental chemists consulted by Reuters on the filings said the back-and-forth between the miners underscores widespread concerns over just how much brine is left and how long it will last. They said the filings show that neither the Chilean authorities nor the companies have a clear picture of the water situation at a time when the miners have been given the green light to boost production.

The true state of the Salar’s water supply, both fresh and saltwater, has become an obsession of lithium industry watchers because of the area’s huge importance in satisfying soaring global demand for the powdery white metal. The area is the most cost-efficient place in the world to mine the metal, and both SQM and Albemarle have staked much of their future production on the Salar.

Lithium analyst Joe Lowry said the filings had potential implications for the global production of lithium, which has become one of the world’s hottest commodities.
“The lithium world is on pins and needles,” he said. When it comes to the Salar, “What is SQM going to be able to do, what is Albemarle going to be able to do production-wise?”

For Mariana Cervetto, a hydro-geologist who has reviewed technical aspects of the case for both Corfo, the state development agency, and the local indigenous communities that surround the Atacama salt flat, questions still outweigh answers.
“When people ask me, ‘Is the water going to run out?’ I tell them, ‘The truth is, we don’t know,” Cervetto said.

The spat between Albemarle and SQM can be traced back to 2013, when government inspectors arrived at SQM’s installations and found something amiss.
Native Algarrobo trees — hardy desert hardwoods that survive by sending shoots deep into underground aquifers — were shedding their leaves and dying.

The 23 dead trees represented one-third of those SQM had committed to monitor. Like canaries in a coal mine, the health of the trees was meant to act as an early warning signal of water problems. Two years later, more trees were dying but SQM failed to notify authorities, according to government inspection reports reviewed by Reuters

“If SQM is extracting more brine than it is permitted from the Salar, that can have repercussions on the availability of reserves in the basin for other projects,” wrote lawyers for Albemarle subsidiary Rockwood Lithium Ltd in the March 2017 filing.




In the filing, Corfo said, however, the study couldn’t pinpoint which of the copper or lithium miners operating in the Salar was to blame for the imbalance. It said this uncertainty was reason enough for regulators to take steps to restrict extraction.

That process is now underway. Reuters reported exclusively in August that Chile’s water regulator was preparing restrictions on new water rights in the Salar in part because of uncertainty over how much extraction it can support.