Our Environmental Performance

At SQM we carry out our operations conscientiously, in harmony with the environment and in compliance with environmental legislation in effect. It is essential that we work to ensure that natural resources and production inputs are used sustainably and to minimize the possible impacts of our production processes on the environment and neighboring communities. We have incorporated early and preventative monitoring of various environmental variables into the design, construction and operation of our production sites in order to prevent and implement the necessary control and mitigation measures.

Our actions are guided by our values, the Sustainable Development Strategy and our Human Rights Policy, through which we commit to protecting the environment and responsibly managing the natural resources we use, complying with our commitments, focusing and planning all of our work to prevent and minimize impact on the surroundings, the ecosystem and future generations. We constantly strive to reduce the use of raw materials, control our air emissions, particularly greenhouse gases, and avoid enerating waste or ensure it is properly managed. We work continuously on environmental management in order to achieve optimal performance.

In regard to the environment, our team mainly focuses on the Tarapacá and Antofagasta regions of northern Chile, where our production sites and the minerals that give life to SQM products are located.

In 2020, we reinforced our commitment to the environment, setting medium- and long-term goals that we have set out in the Sustainability Plan that respond to the new requirements and expectations in the areas of the environment, society and corporate governance.

Biodiversity

Foto: Pampa Hermosa CamFauna1 128

SQM operations are located in desert areas with scarce biodiversity. However, there are some areas near our operations with significant ecological value. In these areas we have implemented on going protection, monitoring and control plans with on going early alerts to help protect the environment.

Our Nueva Victoria site is located in the district of Pozo Almonte in the Tarapacá Region, and is subject to a very extensive environmental monitoring plan given its proximity to the Pampa Tamaru al National Reserve, Bellavista sector, Pintados sector and Salar de Llamara.

In sectors near Nueva Victoria, we identified ecosystem services such as the Salar de Llamara, a site of interest for the Huatacondo and Quillagua communities that is linked to the “Puquios de Llamara” sector, an area where transhumance, or annual displacement of flocks from hi hlands for summer grazing in the lowlands, is practiced. The community of Tamentica also hopes to develop this site as a tourism spot.

The Quillagua community has indicated that there is a relationship between the mouth of the Loa River, the Quebrada Amarga area and the water in the Puquios de Llamar sector. This would be useful because they gather medicinal herbs at the mouth of the Loa River. We have a working group with the Quillagua community and are encouraging the development of joint monitoring .

We have also created a working group with the Quechua Indigenous Community of Huatacondo, where we have presented the monitoring that SQM has conducted. We hope to engage in joint monitoring with the community in the short-term and to establish a methodology that we can then replicate in the Tamentica and Quillagua communities.

Our Salar de Atacama operations are located in the Antofagasta Region’s district of San Pedro de Atacama, which is also home to the National Flamingo Reserve, Soncor Sector and Agua de Quelana Sector.

We found ecosystem services on the eastern border of Salar de Atacama in the Vega de Carvajal and Agua de Quelana sectors, where communities report that they use water, which is currently being sanitized. These Salar de Atacama communities are also interested in using the land.

In 2020, we signed a reements with the Atacameña Indigenous Community of Camar, with whom we created an Environmental Working Group. The Camar Environmental Unit is represented by three water monitors trained in hydrogeology and biota along with two external consultants, Enlace Agua and Más Ambiente, which conduct biotic monitoring.

We are working with the Atacameña Indigenous Community of Toconao on Participatory Monitoring . This allows the communities and the Company to conduct parallel measurements that can be compared.

 

Water

Since SQM’s operations are located in areas with scarce water resources, the use of this resource is very important to our Company and it must be well managed in our production processes.

We hold water rights for surface and underground water supply near our production operations and purchase water from third parties. The main sources of water for our nitrate and iodine facilities at Pedro de Valdivia, María Elena and Coya Sur are the Loa and Salvador Rivers, which run near our production facilities. The water for our Nueva Victoria and Salar de Atacama facilities is obtained from wells near the production facilities. We also purchase water for our production processes from third parties for the lithium carbonate plant and lithium hydroxide plant at Salar del Carmen. We purchase drinking water from local water companies. We have had no significant issues obtaining the water needed for our operations.

We should note that no fresh water is extracted, as classified under GRI.

We report water consumption in production processes to officials on an ongoing basis. Studies are also conducted to identify ways to use water efficiently. We also evaluate each facility’s water management indicators on a yearly basis.

Some of our measures for efficient water use are:

  • Reincorporating all water treated in SQM sewage treatment plants into its production processes. This water is reutilized in our processes in María Elena, Pedro de Valdivia, Coya Sur, Nueva Victoria and Salar de Atacama.

  • Reutilizing process solutions to reduce the consumption of fresh water.

  • The industrial water used at the Salar del Carmen facilities comes from waste water treated by the city of Antofagasta. The Company has used these sources to supply almost 86.4% of the industrial water needed for production processes. The rest of the consumption requirements are met with purchased, desalinated seawater.

The extraction of fresh water for production purposes is subject to strict environmental evaluations, which helps prevent damage to important environmental elements (vegetation, flora and fauna) in aquifers and surface water sources where the Company has water extraction rights.

In conjunction with these studies, extensive hydrogeological modeling is designed and validated under the supervision of national and international experts, based on which the Company conducts ongoing monitoring of expected behavior of the systems.

Of the total groundwater resources extracted for Nueva Victoria in 2020, 878,278 m3 were re-injected as part of the mitigation measures for the Pampa Hermosa project in Salar de Llamara.

Sustainabiity and Water Resource Plan

We have committed to reducing our continental water consumption by 40% by 2032 and 65% by 2040. We reduced our brine extraction by 20% in November 2020 and are moving towards decreasing bring extraction by 50% by 2030.

Know more about our Enviromental Goals here

We have the portal https://www.sqmsenlinea.com/ or Online Monitoring, which provides environmental information on our operations in Salar de Atacama to interested communities and parties. We have designed and implemented a system that allows us to provide information about extracted water and net extracted brine. It also serves as a verification system for authorities and stakeholders wishing to verify our compliance with extraction limits, in keeping with current operating regulations. It also provides historical environmental monitoring data to evaluate and avoid potential effects of our operation, other stakeholders and natural phenomena such as climate change in protected areas. We hope to launch a similar process that allows us to report on these variables as they relate to our Nueva Victoria operations soon.

Water Consumption 2020

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Treated reused sewage

In order to optimize consumption, we recirculate all waste water and water treated at SQM sewage treatment plants into our production processes, thus reutilizing all water. In 2020 we reused approximately 1,305,299m3 based on operational estimates.

Domestic liquid waste from our offices in Antofagasta and at the Port of Tocopilla is disposed of in the public sewer system and, therefore, no dumping occurs that could affect biodiversity and protected habitats. No effluent is discharged.

In the year 2020, no significant spills contaminating the soil or water (surface or groundwater) were reported at the Company’s operating facilities and production sites.

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1,305,299 OF SEWAGE WERE REUTILIZED IN 2020.

Waste

Waste management is a fundamental responsibility of our Company. We take the measures necessary to ensure that it is done safely. All of the companies that transport waste to final disposal sites have the appropriate authorization. We have developed plans and procedures to manage both hazardous and non-hazardous waste. We have eight temporary storage sites for hazardous waste authorized by the Regional Health Agency (Seremi de Salud), six authorized temporary storage sites for non-hazardous industrial waste and an area for disposing of domestic waste generated at our operations. In 2020, 86% of the hazardous industrial waste generated in our production facilities was sent off-site for final disposal using authorized transport, while the remaining 14% was recycled or used to generate energy. Hazardous waste is transported in accordance with regulations in effect in Chile. SQM manages solid domestic waste at all facilities and accommodation facilities or disposes of this waste in authorized landfills. In 2020 there was no generation of hazardous waste that was disposed of or treated internationally. Twentyone percent (21%) of the hazardous waste generated by our operations was recycled by external companies as alternative fuel. We prioritize recycling or reusing inputs, opting to eliminate waste only as a last resort, and when we do, we work with authorized waste management companies. In 2020, we worked at our sites to créate initiatives for reusing waste. For example, we have a pallet reuse project that involves chipping the wood so that it can be used as organic compost for crops. We hope to distribute this material free of charge in our communities in 2021.

Waste sent for final disposal and/or treatment

Emissions

We work hard to manage and monitor emissions of particulate matter (PM10). For this, we have a vast air quality monitoring network in the town of María Elena and participate in the air quality monitoring efforts in Tocopilla. We continuously monitor air emissions at all facilities. These efforts include preparing detailed projections of expected environmental effects, installing and implementing emissions abatement equipment and properly monitoring emissions. We have meteorological stations that are key for monitoring solar evaporation processes at our operations. In addition to these measures, as part of its existing environmental monitoring plans, the Company conducts isokinetic measurements on smokestacks, which form part of the production process along with dryers and boilers. SQM has worked hard to manage and monitor emissions of particulate matter (PM10). For this, we have a vast air quality monitoring network in the town of María Elena and participate in the air quality monitoring efforts in Tocopilla. In regard to Air Decontamination Plans, the Company has implemented a wide range of measures to fulfill commitments to control and reduce its PM10 atmospheric emissions in these towns.

  • PM10 emissions in María Elena have decreased 98.26% from 2007 to now. This reduction can be attributed to operational changes implemented by SQM and has resulted in significantly improved local air quality and meeting of daily and annual PM10 standards. The stations included in the Air Quality Monitoring Network associated with the María Elena Decontamination Plan met the Annual Air Quality Standard for PM10 (50μg/m3N) beginning during the 2010-2012 period at the “hospital station” and during the 2012-2014 period at the “church station”.
  • In the case of Tocopilla, PM10 emissions generated by SQM’s port operations are minor as compared to other sources in the city. As part of the Tocopilla Decontamination Plan, commitments have been fulfilled and all measures necessary to mitigate emissions have been taken. In 2020, SQM’s port operations reported PM10 emissions of 3.98 tons, marking a reduction of 45% from 2007. In comparison to 2019 levels, this reduction is 34% below commitments made in the decontamination plan.

GREENHOUSE GASES (GHG)

SQM estimates the total carbon footprint in aggregate for its entire production chain and separately for several products. The GHG estimate considers all stages from the mineral extraction processes to the finished product given that the port and Scope 3 include upstream articles and services purchased and transport and distribution (upstream and downstream). Currently, the rise in emissions is due to capacity expansions made by the Company, but using more efficient processes that have enabled us to reduce emissions intensity.

GHG SCOPE 1, 2 AND 3 EMISSIONS

      GHG emissions for 2017, 2018, 2019 and 2020 are estimated based on these calculations. In 2020, the total GHG emissions were 1,262,373 CO2 eq broken down into 271,008 tons CO2 eq (Scope 1), 476,552 tons CO2 eq (Scope 2) and 514,814 tons CO2 eq (Scope 3, including upstream articles and services purchased and transportation and distribution upstream and downstream). Includes CO2, CH4 and N2O emissions. GHG emissions are estimated using the IPCC Guidelines for National Greenhouse Gas Inventories and electric power is calculated using the factors posted on the National Energy Commission’s website. These factors are for the power grid from which we contract energy.

Energy

We use a high percentage of solar energy, which is an important component of production processes for solar evaporation ponds at the facilities in Salar de Atacama, Nueva Victoria and Coya Sur. This method gives it an advantage over other processes. It is only possible because the Atacama Desert, where SQM’s operations are located, has extremely high levels of solar radiation, resulting in high evaporation rates and facilitating the processes employed to concentrate salts in ponds year-round. SQM’s operations are also powered by electricity obtained from the National Electric System (SEN) and fuels, where cleaner alternatives are prioritized. SQM has approximately 4,000 hectares of solar evaporation ponds, which allows it to harness significant amounts of solar energy, with solar energy accounting for 93% of all energy consumed in our facilities.

ENERGY CONSUMPTION

First Self-Sustainable Maintenance Workshop

Northern Chile is known for its high solar radiation and low precipitation rates. That is what urged the Salar de Atacama’s Superintendency of Mine Maintenance to develop an unprecedented project to use solar energy to power the Maintenance Shop in a way that is eco-friendlier and more respectful of the environment and neighboring communities. The idea came from the workers, who challenged themselves to generate initiatives to help care for our environment. The innovative idea is designed to co-generate clean energy at the shop using an ‘On Grid’ technology—a system that is connected to the power grid—that also aims to self-generate power using a system of solar panels. By using the panels installed on the roof, we have been able to provide 60% of the power required for the shop during the day,” explained Muñoz. The panels produce 68 kwh/day, for an annual production of 19 megawatts that are generated from 7:00 a.m.to 7:00 p.m. (the period of greatest solar radiation). After that time, the shop begins to pull electricity from the power grid until 06:59 a.m., when the photovoltaic panels once again feed the facility.

Driving Eletromobility

In order to reinforce and promote the use of clean energy, SQM and Copec inaugurated the first electric eco-charger in South America, in the Antofagasta Region, at its Salar del Carmen site. The eco-charger is designed to contribute to sustainable development and environmental care by reducing carbon dioxide (CO2) and greenhouse gas (GHG) emissions. The initiative will constitute a contribution to governmentdriven energy policies such as “The 2018-2022 Energy Path,” designed to modernize the Chilean power grid by way of a series of goals such as increasing the supply of e-vehicles on the market, expanding the reach of the charging station network, fostering research into electromobility and participating in various public-private projects. This sustainable power system is fully off-grid, operating 24 hours a day, 365 days a year on 100% solar power that is generated by the 46 solar panels installed at a 15° angle in the 96-square-meter plot built for this purpose. The system’s small-scale photovoltaic plant absorbs the sun’s energy which is then stored in the system’s lithium batteries and later distributed through an electric charger equipped with a smart meter. Solar charging stations Will soon be available at our sites in Antofagasta, María Elena, Tocopilla and Salar de Atacama. One of the most important aspects of this operational milestone is that, in the midterm, SQM will be able to replace a percentage of its diesel-fueled vehicle fleet. For example, the Salar del Carmen warehouse now runs its daily errands in two electric vans.

SQM Employees Receive Environmentaltraining

One of SQM’s main commitments consists of guaranteeing that we operate sustainably, with respect for the environment and neighboring communities, thereby ensuring compliance with current legislation. In keeping with this premise, employees at our Salar de Atacama site and the areas of Communities, Environment and Hydrogeology, participated in training focused on learning more about miscellaneous initiatives that enable us to work in harmony with our surroundings and avoid any potential impact associated with our activities. Training is designed to provide participants an opportunity to discuss topics of interest such as the geological formations in the Salar de Atacama basin, the Authorized Extraction Plan approved under the environmental permit (RCA), the most relevant aspects of the Chilean environmental institutional arrangements, project assessments under SEA guidelines (Environmental Assessment System) and projects approved for the Salar de Atacama site. The main objective consists of providing sound knowledge and information as a basis for good decision making at the production level, while also understanding the effect of our day-to-day decisions on creating synergies between environmental care and concern and operations.