The Lithium Triangle in Chile: The Privilege of Commerical Water Rights

Located in the rain shadow of the Western Cordillera, Chile’s Salar de Atacama is among the most arid places on Earth, receiving only about 25 mm of annual precipitation and experiencing approximately 2,000 mm of potential evapotranspiration annually (Garcés & Álvarez, 2020). The Salar is the terminal point of an endorheic basin, a hydrologic catchment that does not reach the sea. Rainwater and snowmelt from higher elevations progressively flow as infiltrated (fresh) groundwater into the Salar, where it is incrementally evaporated, leaving a large volume of concentrated brine (salty groundwater) underneath the salt flats. These contain large amounts of minerals, including the world’s largest copper and lithium reserves (Pena & Huijbregts, 2014; Garcés & Álvarez, 2020). Copper has been mined in the rock formations surrounding the Salar for centuries, with the world’s largest copper mining operation (La Escondida, operated by BHP, Rio Tinto, and JECO) located approximately 20 miles from the Salar. Lithium demand has boomed over the last few decades with the rise of Lithium batteries, and Chile is currently the world’s second-largest producer. The government considers lithium a strategic resource of national interest and retains tight control over its extraction. Two private firms, SQM-Tianqi and Albemarle, have been granted licenses to extract up to 140,000 and 48,000 tons of lithium per year, respectively (Garcés & Álvarez, 2020). 

The mining of copper and lithium is water-intensive, leading to increased challenges in the already water-stressed region. Chile’s management of water markets through privatization and commodification has brought the commercial use of water for mining in direct tension with public water use, water needs for ecosystems, and Indigenous water use and cultural values. The commune of San Pedro de Atacama, which contains the Salar, is home to approximately 11,000 people and 16 communities. Half of this population belongs to Indigenous Atacameño (Likan Antai) groups (Liu & Agusdinata, 2020), who traditionally captured and channeled freshwater springs for subsistence agriculture at natural oases along the Andean foothills (Babidge & Bolados, 2018). Beyond subsistence, the Atacameño people believe the water has a sacred character, directly linking it to the land and the people; “water and land are life. The waters cannot be traded. Water is sacred. It is powerful, it is life, it is our vein, it is our blood ...”  (Acameño farmer, cited in Jerez et al., 2021). 

This case study is important because it sheds light on the issues surrounding Chile’s Water Code policies and its effect on Indigenous populations, access to water as a cultural and social good for Indigenous Persons, and the effect of water scarcity on the interrelated rights of affected communities.

The findings in this case study conclude that mining activities, of groundwater abstraction for ore processing and brine evaporation/abstraction, cause water insecurities for Indigenous Persons in the Atacameño communities. Furthermore, mining activities affect several interrelated rights of Indigenous Persons in Chile.

The economic and hydrosocial characteristics of the Atacameño Indigenous communities that rely on the water resources of Salar de Atacama are fairly homogeneous across the region. Therefore, we group them into one single stakeholder impact category (SIC). However, mining activities in the region are grouped into three distinct categories of hydro-industrial processes (CHIPS): 

• Groundwater for ore processing: Mining requires several tons of water to concentrate and refine the extracted ore. In the Atacama region, this water is obtained from freshwater aquifers bordering the Salar, which may have a long-term impact on other culturally-significant water resources.
• Sea water for ore processing: Increasingly, mining companies substitute groundwater with desalinated seawater, which may affect water availability for local communities over the long term.
• Brine abstraction for lithium production: Lithium mining requires the extraction of massive amounts of salty groundwater. There may be long-term effects of the extraction and precipitation of the brine water on certain aspects of water security. 

Only one SIC is relevant for this study:

• Atacameño communities consist of the Indigenous and farming communities that reside in the area being affected by groundwater pumping and brine abstraction processes.

Groundwater for Ore Processing

The water security assessment was carried out based on peer-reviewed literature that either reports on primary data (Level 3) or modeling results (Level 2). The accuracy level of each assessment is indicated in the results table.

Depending on the ore type, approximately 40-96 tons of water is required to concentrate and refine a ton of copper (Pena and Huijbregts, 2014), and 5-50 tons of water for a ton of battery-grade lithium (Flexer et al., 2018). In 2017, mining companies sourced about 80% of this water from freshwater aquifers adjacent to the Salar. These aquifers have substantial lateral flows towards the Salar, so the extent to which pumping by mining companies affect water availability in traditional springs and oases depends on the spatial configuration of the wells and local topography and hydrogeology condition. Such an effect has been documented or predicted in specific instances (e.g., Salar the Punta Negra, Pampa Colorada), but is certainly not universal. There is generally a high degree of uncertainty in the causal relationship between pumping by mining companies and decreased access to traditional water sources. The nature and amplitude of this uncertainty diverge between the communities (traditional knowledge) and the industries (modeling outputs), and failure to acknowledge and communicate might exacerbate water grievances (Babidge & Bolados, 2018). However, studies have reported a marked decline in traditional agriculture; this decline is associated with mining activities (e.g., Babidge & Bolados, 2018; Jerez et al., 2021). Mechanisms for calculating this decline include a decrease in crop yields, possibly related to aerosols associated with brine evaporation (see the Brine Abstraction section below), and opportunities for wage labor in mining or related industries. 

Recent changes in regulations associated with the ratification of the International Labor Organization’s Convention No. 169 recognize the territorial and consultative rights of Indigenous communities. This provides a platform for communities to negotiate items including measures for water source protection and cash compensations ($15 million annually for lithium, or 3.5% of the sales value; Garcés & Álvarez, 2020; Jerez et al., 2021). These sources of income and the associated access to imported food have likely increased local food security compared to traditional subsistence farming. Nevertheless, communities feel a sense of vulnerability and social fracturing due to their natural resources being treated as commodities and their communities as “subjects receiving resources” (Jerez et al., 2021). In this context, we associate groundwater abstraction for ore processing with an increase in virtual water security, but a decrease in both cultural water security and potentially blue water security (see Table 1 for definitions of water security). 

Table 1. Definitions of Water Insecurity

Sea Water for Ore Processing

Mining companies are sourcing an increasing share of their ore processing water from the Pacific Ocean, located 200 km away and 3,500 meters below the Salar. As of 2020, copper operations at La Escondida were obtaining more than 40% of their ore-processing water from the ocean and vowed to stop using locally drawn fresh water by 2030. However, to our knowledge, desalinated seawater is not directly provided to communities, but is instead used by mining companies as a substitute for local groundwater for ore processing. Given the spatial heterogeneity and large uncertainty associated with groundwater flow, the water security implications for local communities are unclear. Nonetheless, ceasing the use of groundwater for ore processing could potentially raise water levels in community wells, suggesting a possible increase in blue water security for Indigenous communities in the Salar. It is worth noting, however, that our analysis does not consider the environmental externalities associated with desalinating and conveying water from the sea (e.g., energy generation, brine disposal), which might have human rights implications beyond the Salar. 

Brine Abstraction

Lithium production involves the extraction of massive volumes,  approximately 67.5 million cubic members (MCM) per year, (Garcés & Álvarez, 2020) of salty groundwater that lies under the salt flat and contains the Li+ ions. Up to 95% of the original brine water evaporates under ambient climatic conditions (evaporation pans) which allows the lithium to precipitate (Habashi, 1997), making the process the largest source of water consumption by volume. Extracting such a large amount of water has systemic hydrological implications. Remote sensing data estimate that water storage in the region, including soil moisture, groundwater, or surface water, decreases by about one millimeter per year (Liu & Agusdinata, 2020). Other estimates evaluate combined water abstractions to exceed the natural recharge rate by approximately 2 m³/s (Jerez et al., 2021). This trend of decreasing water storage is statistically significant and substantial, given the arid nature of the region. 

However, the extent to which this translates to decreased freshwater availability (as opposed to brine) remains uncertain. On the one hand, the evaporation process transfers long-term water stored as brine back into the active hydrological cycle, as the evaporated water eventually precipitates as rainfall. The degree to which evaporated water precipitates back into the Salar watershed remains an open question. A recent study estimates that approximately 20% of annual rainfall in the watershed is attributable to brine evaporation (Guzmán, 2021). Although this estimate carries substantial uncertainty, it suggests that brine evaporation added a significant amount of freshwater into the active hydrological system, enhancing green water security (i.e., less scarcity). 

On the other hand, the gradual depletion of brine aquifers might cause freshwater to seep from the aquifers surrounding the salt flats and contribute to their depletion (Flexer et al., 2018). However, the significance of this phenomenon is very context-specific and depends on local topographic and hydrogeological characteristics, which are often confidential due to commercial interests. The little available information suggests that this phenomenon is not prevalent in the Atacama region (Marazuela et al., 2019), so we report no effect of brine evaporation on community blue water security. 

Cultural water insecurity emerges from differing perceptions on the nature of the evaporated brine. The evaporated brine is too salty to be used for any other purpose and so does not have the opportunity costs typically associated with fresh blue water withdrawals. Consequently, firms extracting brine are not required to obtain water rights, which is the legal mechanism to which other industrial water users in the area are subject (Bustos-Gallardo et al., 2021). The Indigenous community, however, does consider brine as water and perceives lithium mining activities as processes by which water is mined and commodified (Jerez et al., 2021). Despite added food security through cash compensation for lithium mining, this process is contrary to the Atacameño world view, which deeply links water and its ecosystems to the land and people (Babidge & Bolados, 2018). To summarize, we associate brine evaporation with a decrease in cultural water security, a decrease in virtual water security, and a possible increase in green water security.

Table 2. Summary of CHIPs vs SICs for Water Security for the Atacameño Communities

Table 1: G, B, E, V, and C stand for green, blue, economic, virtual, and cultural water security, respectively. A minus and a plus sign respectively indicate a decrease or increase in water security. Note that a decrease in water security can be associated with either water scarcity (drought) or excess (flood). Asterisks represent Level 2 accuracy in the sense that the assessment is either disputed (i.e., dependent on specific model conditions) or might vary substantially across communities depending on their specific location and local hydrogeology. All other (unmarked) assessments are drawn from peer-reviewed literature that analyzes primary data (Level 3). 

Based on the framework outlined in Section 2.3, we conceptualize governance as the socio-political context guiding the mining or extractive operation. This includes, but is not limited to, the role and influence of state and non-state actors, institutions, and their responsibilities, decision-making practices, and the capacity and interests of local communities where the operations are taking place. We extracted information from academic and gray literature using a spreadsheet with multiple columns mapping to different themes in our framework. 

Given limited information in certain subthemes, we consolidated our findings into three major themes at the core of the governance framework: Chile’s Water Policy Regime; Major Actors and Power Asymmetries in Chile’s Water Policy Landscape; and Indigenous Participation, Water Rights, and Conflicts. 

We find in Chile’s case that the Water Code, underpinned by a neoliberal economic model, has privileged commercial water use for mining over other uses. In some cases, the Code granted exclusive water use rights to transnational mining companies without regard for Indigenous property, land, and livelihood, undermining community autonomy over water use decisions and causing conflicts. Mining is economically beneficial to the Chilean state, but for decades, many Indigenous peoples and rural communities have lost their water rights to mining and water companies, leading to land abandonment. Disjointed institutional arrangements and a lack of coordinated land and water governance have enabled intensive use of both surface and groundwater, resulting in negative ecological impacts on wetlands and other fragile ecosystems. Historically, regulatory lapses in the water sector, weak institutional protections for Indigenous Peoples and their land, and lack of appropriate revisions to the Water Code, led to conflicts among mining companies, local and Indigenous communities, and state agencies. Without an effective state and strong institutions for water, land, and environmental management, some communities formed partnerships with mining companies and negotiated new water use terms. While these partnerships are imperfect, they underscore the need for mining companies to dialogue, engage with communities, and be more transparent about their impacts. More recently, however, the Chilean government has responded to public pressure and mass protests to strengthen its regulation of water used for mining.

Chile’s Water Policy Regime

Driven largely by neoliberal economic policies during the Pinochet regime (1973-1990), Chile instituted a Water Code in 1991, which commodified its water resources and handed considerable oversight to transnational corporations. The Water Code created a free market for water rights by deregulating its use and extraction, and it entirely privatized water management, supply, and allocation (Babidge & Bolados, 2018).   

One goal of the Water Code was to drive economic growth by boosting the country’s extractive and irrigation industries. The Water Code was set up to restrict state regulation of the water sector so as to streamline the acquisition and protection of private water rights. The Code allowed water rights to be purchased, sold, or transferred without any state involvement (Romero et al., 2012). These regulations were part of broader neoliberal economic policies that pushed for decentralized decision-making, resulting in an intensive abstraction of surface and groundwater, and encroachment on Indigenous land resources. The Chilean water law defines "use" in terms of water extraction (Borgias, 2018). The Water Code also gave state-based institutions the mandate to grant water rights to private corporations, enabling the latter to extract both surface and groundwater without accountability. Ultimately this vacuum of government oversight created conditions where power and profit determined the preservation or removal of water rights, and corporations were in charge of outlining their own water-use regulations. 

Most of Chile’s water governance challenges stem from inconsistencies in water rights and regulations due to weak governance in the decades since the Water Code’s enactment (Boddenberg and Mortensen, 2020). Despite the intricate connections between land and water, water rights are allocated separately from land under the Code, with very little government regulation of land-water exchanges (Borgias, 2018). The separation of land and water governance was done on purpose to limit any constraints on water use (Romero et al., 2012). This separation of land and water-based institutions, in addition to poor coordination between institutions, is a form of governance failure that enables mining companies to extend their operations into Indigenous conservation territories and biodiversity protection sites without penalty. As a result, competition for water has increased. Even though a 1993 Indigenous Law recognized Indigenous rights over water on traditional land (Babidge & Bolados, 2018), many Indigenous people have lost their water rights to mining and drinking water companies (Romero et al., 2012). With no clear government requirements, companies have provided no transparent measurements of water extraction in Atacama, nor adequate information on the water supply in the area (Sherwood and Cambero, 2018). 

Major Actors and Power Asymmetries in Chile’s Water Policy Landscape

Multiple actors with different stakes, motivations, and interests operate in Chile’s water policy landscape. These include mining companies/projects such as Candelaria-Lundin, Cerro Negro Norte-CNN-CAP, Caserones, and Mantoverde-Anglo American, as well as the government, Indigenous groups, farming communities, and social activists. National and international mining companies attempt to acquire the necessary water resources by buying water rights from local communities, installing wells, regularizing illegal logging, etc. (Romero et al., 2012). While many actors are involved in water management in Chile, transnational and national mining corporations control most water resources (Jerez et al., 2021). 

Although mining companies in Chile are repeatedly criticized for their water use, community engagement tactics, and water rights violations, some do engage with communities through corporate social responsibility strategies. Some companies provide financial resources for community needs in exchange for water (Jerez et al., 2021). For example, in 2012 and 2016, Albemarle signed agreements with Atacameño to provide funds for community projects (Jerez et al., 2021). Similarly, in 2007, an Atacameño community partnered with Minera Escondida, a mining company, to renew a ten-year water deal and incorporate new arrangements for better environmental reporting and community development (Babidge, 2013). Other companies have compensation measures in place, though these are mostly environmentally focused rather than socially focused, e.g., habitat enhancement and fish restocking (Campero et al., 2021). Caserones' environmental impact assessment (EIA) approval included terms to supply locals with desalinated water while they continued consuming groundwater. It should be noted that efforts like this, however, create dependency relationships (Campero et al., 2021). 

Indigenous Participation, Water Rights, and Conflicts

Numerous conflicts have occurred between companies, the government, and Indigenous communities as the depleted water supply threatens the local cultural heritage, livelihoods, and spiritual and cultural practices (Garcés & Álvarez, 2020; Babidge, 2016). Conflicting viewpoints between Andean cultures who see water as an essential part of their community and livelihoods, and corporations who see water as a commodity, have led to protests, hunger strikes, and lawsuits. Atacameño rituals involving "feeding" the Earth, utilize water and are threatened by drought (Babidge, 2016). Indigenous moral teachings emphasize interconnectedness with nature through water and are conceptually opposed to mining water stewardship (Babidge, 2016). 

As previously mentioned, the Chilean government has not enforced rules regarding Indigenous prior consent, which has led to Indigenous Peoples’ difficulties in obtaining justice, especially given that these communities have few formal property rights (Boddenberg and Mortensen, 2020). In some instances, companies claim water rights illegally, taking away resources from Indigenous people and rural communities and forcing them to relocate without the ability to effectively protest (Romero et al., 2012). Government oversight could ensure transparency when it comes to how water is managed. However, in reality, a lack of transparency has hindered Indigenous communities’ abilities to calculate the impact, and therefore inhibited their ability to resist.  As an example, quantities of extracted water are often invisible to local people (Babidge, 2016). Additionally, the mining industry has had disastrous effects on the wildlife and biodiversity of the Atacama region due to their exploitation of water resources, which in turn has threatened agriculture and tourism in these communities (Babidge, 2016). 

Recently, there have been many water-related suits filed against mining companies (specifically Albemarle and SQM) detailing the exploitation of resources due to the fact that no clear limits have been placed on water extraction, nor have the companies provided adequate information on water supply in the area (Sherwood and Cambero, 2018). Other conflicts surround the extent of ecological damage done by mining companies. The Peoples’ Council organized street rallies against the Minera Escondida Limitada (MEL) extraction proposal of Pampa Colorada; NGOs supported this through campaigns and petitions; and Chile’s environmental commission, la Comisión Regional del Medio Ambiente (COREMA), rejected the environmental impact assessment for MEL's project (Babidge, 2016). Social movement actors have taken the role of monitoring extractive development, facilitating legal reforms, and promoting different development models to fill in for the weak regulatory work of the state (Borgias, 2018). 

These conditions clearly demonstrate the need for the Chilean government to update its water management policies. However, the pathway forward is not straightforward. Recently regulations and restrictions have been introduced that pressure companies to consult Indigenous groups. However, movements like these often force mining companies to implement expensive water solutions (such as establishing desalination plants) that are not always financially feasible (Azzopardi, 2020). There is also a scholarly debate about the new Chilean constitution weakening water protection as private property (Azzopardi, 2020). 

Neither the Chilean authorities nor the companies have a clear picture of the water situation, making any decision difficult (Sherwood and Cambero, 2018). The Plurinational Observatory of Andean Salt Flats (Opsal), a civil society advocacy organization, advocates for a holistic approach to regulating the Atacama that respects ecology and culture and allows for Indigenous participation in water governance. Meanwhile, many progressives were elected into Chile's constitutional assembly in 2021, which serves as a chance to enact inclusive water and other preservation laws. If these water rights advocates succeed in lobbying for the enactment of inclusive water laws, the focus will shift to the government’s ability and willingness to clarify and enforce rights, regulations, and monitoring going forward. 

In this subsection, we apply a legal decision-making matrix to assess the human rights consequences of water insecurity. We focus specifically on the two water management measures that created water insecurity impacts: groundwater abstraction for ore processing and brine evaporation. We exclude sea water conveyance policies from this assessment due to the preliminary finding of no probable impact on water insecurity or stress. We use the following Water Insecurity and Governance Analytical and Legal Matrices to frame human rights law-based inquiries required for a detailed assessment of company operations, whether through groundwater abstraction or brine evaporation, and the company’s human rights impacts. At this juncture, given the brief synthesis of the case study, we do not introduce any granular assessment of attribution or imputation of responsibility to either business actors or State actors. However, we intentionally highlight potential human rights violations that may involve legal responsibility toward affected communities, such as Indigenous peoples, rural or urban communities, and particularly vulnerable groups including women, children, and persons with disabilities. Neither do we consider, at this point, any possible legal defenses against responsibility. The main objective of applying the Water Insecurity Analytical and Legal Matrices is to guide, frame, and prepare the human rights law-based assessments (as well as any fact-finding or field investigations). These assessments should inform any subsequent company-level decision-making process concerning the human rights impacts of each water management measure.

WATER INSECURITY ANALYTICAL AND LEGAL MATRIX: 

Table 4. Water Security Analytical and Legal Matrix: Groundwater Abstraction for Ore Processing

Table 5. Water Security Analytical and Legal Matrix: Brine Evaporation or Abstraction

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Table 6. Water Governance Analytical and Legal Matrix

The legal analysis for water insecurity reveals that embarking on mining activities would adversely affect multiple rights of the Atacameño Indigenous communities, ranging from water adequacy to the multidimensional uses of water as a social and cultural good. Furthermore, the impact of mining activities on these communities raises concerns about long-term sustainability.

The foremost human rights challenges include the rights to the highest attainable standard of physical and mental health, a healthy environment, and employment for Indigenous communities. Furthermore, mining activities raise questions of crosscutting human rights obligations—such as the rights to self-determination, non-discrimination, free disposition of natural resources, and non-deprivation of affected communities’ means of subsistence.

The legal analysis of water governance failures raises questions about how weak Chilean law and governmental oversight may create conditions for unregulated corporate management of water, which in turn impacts the rights of Indigenous communities in the Atacama region. In addition to interrogating the governance architecture of the country, the matrix also emphasizes the importance of Indigenous participation in decision-making. This participation relies heavily on corporate transparency and a willingness to integrate Indigenous perspectives, particularly regarding the multidimensional uses of water for social and cultural purposes.

The analysis presented in this case study represents the first application of the Realizing Rights for Water Framework. Consequently, it does not target a specific audience for the legal analysis but instead maps out indicators and issues relevant to both government entities and mining companies.

The Water Governance Failure Analytical and Legal Matrix is, in reality, a strategic template for setting the parameters for a more detailed multidisciplinary, mixed methods assessment of Chile’s compliance or non-compliance with the human right to water in the specific context of the Atacama region. This compliance, or lack thereof, may be borne out of the absence of regulation, the deficiency of existing regulations, or the poor enforcement of regulatory requirements on private actors. This template/framework can provide useful direction for researchers to understand the topography of elements, cross-cutting obligations, and interrelated specific human rights obligations that gravitate around the human right to water as a matter of law, policy, and governance. It can also clarify the factual and legal questions necessary to provide the most comprehensive and integrative picture of the consistency or inconsistency of a set of business operations as they relate to the human right to water. The framework is open to quantitative and qualitative approaches that can address these factual and legal questions in order to approximate the best research practices to inform business decision-making.

Thus, unlike the narrow ‘indicators’ approach (e.g. the Danish Institute for Human Rights, The AAAQ Framework, and the Right to Water), we do not, ex-ante, prescribe data points or set proxy values (e.g., infant nutrition statistics or maternal mortality as the basis for checking the box or indicator on the right to health) for eliciting answers to the factual and legal questions we identify in either the Water insecurity Analytical and Legal Matrices. Nor do we cabin our analysis of the human right to water in isolation from all interdependent, indivisible, and universal human rights. Likewise, the above Water Governance Failures Analytical and Legal Matrix does not take prescriptive or normative directions but rather sets the parameters of inquiries and field investigations on water governance failures in relation to the elements of the human right to water, cross-cutting human rights obligations and specifically interrelated human rights obligations of the State concerned. Neither do we, at this point of preliminary mapping, preoccupy ourselves with any purported definitive characterizations of “violation” versus “no violation” of human rights law, which many indicator-based approaches tend to prematurely conclude, often based on a fragmented assessment of both facts and law. 

Our multidisciplinary framework invites layered scrutiny into the consequences of business decisions and operations, recognizing that a more extended human rights impact assessment, human rights due diligence process, and even possibly a post-operation human rights audit will require answering the factual and legal questions we frame under our comprehensive analytical and legal framework. Only after necessary field investigations, fact-finding, and data analysis can one definitively test facts against the relevantly applicable law, including written laws such as statutes, codes, administrative regulations, and jurisprudence in common law jurisdictions, as well as unwritten laws like customary law, regional law, and international law as applicable to the State concerned.

In the case of the Lithium triangle in Chile, it is clear from this preliminary examination that the cultural water insecurity and possible blue water insecurity arising from groundwater abstraction for ore processing, as well as the cultural water insecurity in brine evaporation or abstraction, also invites attention to likely human rights impacts on the right to water and related cross-cutting and interrelated human rights violations. The apparent water governance failures in Chile, as contextualized from the standpoint of influential actors, evidence of participation, transparency, accountability, and threats to hydrosocial relations, likewise yield preliminary sites of apparent gaps and inconsistencies in human rights law compliance. Our framework attests to the need for business decision-makers to elicit the necessary information under feasible and actionable frameworks to inform their policies well before any hard conclusions of violations, factual assertions, or legal characterizations are made involving the human right to water and its corresponding cross-cutting obligations and interrelated human rights.