Regional Government of Atacama v Ministry of Mining and Other
Jurisdiction: Court of Appeal of Copiapo
Side A: Regional Government of Atacama
Side B: Ministry of Mining and Other
Core objectives: Whether the changes in the government policies related to lithium exploitation for the country's energy transition was done without public participation and assessment of environmental impacts.
In 1979, lithium was declared of national interest in Chile. Since then, only the State of Chile can manage lithium production, which maintains the status of lithium as a strategic mineral. On October 13, 2021, the Government of Chile (through the Ministry of Mining) published a call for applications to increase lithium production. This call intends to facilitate the entry of national and foreign companies in the lithium market, promoting production and supporting the development of new technologies that enable the energy transition and the fight against global warming. Lithium is a key element of the energy transition given the increased demand for rechargeable lithium-ion batteries for supplying the power and transport sectors with renewable energy. The call seeks encompass exploration, exploitation, and commercialization of a total of 400,000 tons of marketable metallic lithium, divided into 5 quotas of 80,000 tons each.
On January 10, 2022, the regional government of Atacama brought a case against the Ministry of Mining. The complaint questions the bidding process of the lithium production application, which the regional government argues was carried out without public participation and in the absence of any assessment of the activity’s potential environmental impacts on the region. The regional government argues that the project will be developed in the Atacama Salt Flats, representing a threat to its biodiversity. Atacama also points out that the project might destroy wetlands, the availability of water, which is already scarce in the area, and the destruction of cultural heritage, as it is a sector of high touristic interest. While the regional government recognizes that the call for lithium bidding responds to international pressure to guarantee an energy transition, it highlights the preliminary step to assess the impacts of the increased lithium mining. The regional authority requests that the contracts are deemed null or, in the alternative, to restart the bidding process and ensure that the regional government is properly consulted.
The Ministry of Mining argued that the bids have already been awarded to two companies and that the existing contracts refer to the exploration and exploitation of lithium. A constitutional action would not be pertinent at this stage. In the defendants’ view, the Court should analyze the alleged arbitrariness or illegality of the act at a later stage, once the act of granting the concessions has been completed. The Ministry of Mining further noted that it is up to the successful bidder to obtain the different permits required for the operation of the lithium plant, for example environmental, water and administrative permits.
On January 14, 2022, the Court of Appeals of Copiapo granted the plaintiff’s preliminary request and suspended the contracts while the writ of protection is pending.
Full case documents will be added as they become available.