Roskill noted in its report, ‘Lithium: Outlook to 2031, 18th Edition', that demand for lithium is set to rise over the next decade, and that sustainability has been brought to the forefront of the lithium debate. As a result, lithium producers have sought to underscore their ESG credentials, aiming to highlight not just their financial performance, but their ESG prowess as well.
Water consumption at lithium brine facilities is one environmental concern of the downstream sector, as they operate in some of the driest areas on the planet. These operations use solar, chemical or physical means to produce refined lithium products for the battery sector, and take large volumes of water and brine for their process and to run their operations. This consumption has led to concerns of water over-use at the extraction and refining sites, and can cause negative consequences for the local communities, flora and fauna that rely on these limited water supplies.
According to Roskill's analysis, 70% of lithium extracted from brine-based resources originates from areas that are categorised as being at ‘high water risk' by the World Resources Institute's (WRI) Water Risk Atlas.
The Water Risk Atlas score aggregates several metrics, including availability of water, seasonal variability and groundwater table decline to produce an overall risk score. Due to the high proportion of brine producers located in areas that are deemed to be at high risk of water over-exploitation, it is no surprise that many brine producers have introduced plans to reduce water consumption at their operations, including major industry producers such as SQM and Albemarle that both have operations in the Salar de Atacama in Chile.
Roskill noted that as ESG becomes more important, it is also vital to understand lithium producers' water consumption rates, and that the location of water-consuming producers in high-water risk areas should concern customers and investors.
However, Roskill added that total water and brine consumption is only one aspect. Its analysis highlights that an indication of how that water and brine consumption affects local communities and the ecosphere is even more important, adding that its findings are stark and emphasise the sustainability-related risks lithium brine producers are exposed to.
