Providing soda ash for the top lithium producer is no easy feat
SQM is the world’s largest lithium producer. Their facilities are located in the Atacama Desert of Northern Chile, where the company refines lithium salts contained in brine pumped from underground water tables. To enable the precipitation process, they need vast amounts of sodium carbonate, or soda ash, of which Solvay is one leading global producer. The two companies therefore maintain a long-standing and fruitful collaboration, based on mutual trust and shared values, among which the necessity to reduce the environmental impact of their activities.
Navigating procurement challenges
“Vast amounts” is no exaggeration: SQM consumes around 400,000 tons of soda ash per year. “For every ton of lithium we produce, we need roughly two tons of soda ash,” explains Ivo Colombo, SQM’s Corporate Procurement Director. About half of that is provided by Solvay, a volume that has consistently increased through the years. “Together with Solvay, we worked to develop a new supply alternative that allowed us to secure our sourcing,” continues Ivo, “and offered a strong supply solution.”
With such high volumes needed in a quite remote part of the world, reliability of supply is a major concern here. Even more so with the steady increase of global demand for lithium due to the expansion of the electric car market – lithium is a key ingredient in EV batteries. “We are constantly growing to follow market demand, so it’s really important to be able to rely on secure procurement, with good logistics and impeccable availability,” says Ivo. “Solvay has given us that consistently. Even during the Covid crisis and the logistics complications it caused, we were able to navigate the problems successfully.”
“We are constantly growing to follow market demand, so it’s really important to be able to rely on secure procurement, with good logistics and impeccable availability.”
Ivo Colombo, Corporate Procurement Director, SQM
A shared environmental agenda
In addition to collaborating to get through difficult patches, Solvay and SQM are also brought together by a shared vision of the future of the industry, in which reducing its environmental impact is a top priority. “The lithium market is growing, but also changing: our customers are demanding higher quality and more sustainability in our production processes,” explains Ivo. “So our challenge is not just to sell more, but to increase quality and comply with environmental certifications.”
The main issue for this particular producer is water scarcity: there is considerable focus on the use of underground water in the arid region where SQM operates, and the company is working on reducing its withdrawals. “We invest $40M a year in the development of new technologies to improve our processes and reduce our environmental impact,” says Ivo. “There are different initiatives such as using low carbon energies, electrification and improving the efficiency at our plants, while at the same time keeping costs stable.” This of course matches well with Solvay’s own sustainability ambitions. “We share the same challenges and the same agenda, that’s why we wanted to partner with Solvay.”
