Chile Opening New Flank in Battle With Chemicals Giant SQM

  • Regulator accuses SQM of infractions at desert iodine plant
  • SQM failed to meet water extraction limits at saltbeds: Govt.

Soc. Quimica & Minera de Chile SA, the world’s most profitable major chemicals company, risks fines and losing permits after Chilean authorities said it breached environmental rules.

The environmental regulator is charging SQM with setting up water pumps in parts of the Llamara salt-flats where it didn’t have permission, failing to monitor the site as agreed and failing to take remedial action, according to a document posted on the regulator’s website. The pumps are part of the Pampa Hermosa iodine project in northern Chile.

Corfo, a separate government agency, is already trying to rescind SQM’s license to extract lithium and potassium from the Atacama salt-flat, alleging it failed to pay all the royalties it owed. Two weeks ago, it added to that case by alleging SQM had failed to meet obligations to “protect the integrity” of Corfo’s mining properties. SQM has previously rejected those accusations. The company is also under investigation for a series of illegal payments to politicians and for tax evasion.

An external press relations official at SQM wasn’t immediately available and didn’t respond to an e-mail seeking comments.

SQM obtained environmental approval for its Pampa Hermosa project in 2010, expanding iodine production at its Nueva Victoria industrial complex, which Pampa Hermosa supplies, to 11,000 tons per year from 6,500 tons. SQM announced last week plans to expand fertilizer production at Nueva Victoria.

The Santiago-based company’s earnings before interest, taxes, depreciation, and amortization margin of 55 percent in the first quarter was the highest among chemicals companies with a market value of at least $5 billion, according to data compiled by Bloomberg.

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