Major European firms sign agreement for sustainable exploitation of Chilean lithium

Friday, June 18th 2021 - 09:23 UTC

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The agreement is not intended to facilitate the supply of lithium or the purchase or sale of any raw mineral

As the world transitions from fossil fuels to sustainable energy-powered vehicles, four European giants have signed an agreement for the sustainable exploitation of Chilean lithium, it was announced Thursday in Santiago.

German holdings Daimler AG, Volkswagen AG and BASF joined Dutch smartphone manufacturers Fairphone to create The Responsible Lithium Partnership so that the extraction of the mineral, which is essential in the production of batteries, does not affect the ecosystem or people who live in the surrounding areas.

The partnership targets the Salar de Atacama reserve in northern Chile as other leading players in the industry world, such as Tesla, which will rely on that source of energy for their future outputs, are laying out plans of their own to guarantee adequate supply.

“The region's ecosystem is fragile and there is a lack of consensus on the impacts and risks of lithium mining (...). Potential risks from water changes could damage ecosystems and affect local livelihoods. Addressing these water-related risks effectively requires the collaboration of stakeholders,” said Volkswagen through a statement.

The memorandum aims to facilitate a common understanding of the status quo and jointly develop a shared vision for the future of the Salar de Atacama basin. In addition, the joint development of an action plan is proposed to improve long-term integrated management of natural resources and to undertake the first implementation steps.

The new partnership is set to commence operations in the last quarter of 2021, with an expected duration of 2.5 years. “It is not intended to facilitate the supply of lithium or the purchase or sale of any raw mineral,” it adds.

The agreement also includes the Dutch Fairphone and the German BASF, the Daimler groups (Mercedes-Benz, Smart, Freightliner, Mitsubishi Fuso and Western Star) and Volkswagen (Audi, Bentley, Bugatti, Cupra, Ducati, Lamborghini, MAN, Porsche, Seat, Škoda, Scania and Volkswagen) declare that they are aware of their responsibility throughout the entire supply chain, including their human rights due diligence for the sourcing and production of raw materials.

“For this reason, we have started the Lithium Responsible Association to promote sustainable development, contribute to the reduction of possible negative impacts and strengthen the protection of human rights. Responsible business conduct is not only based on collaboration with business partners, but is also based on a constructive engagement with governments and civil society,” the statement added.