Protest at Chile's lithium salt flats snarls roads to SQM, Albemarle

SANTIAGO (Reuters) - A protest by several hundred people in northern Chile on Wednesday blocked access to the Atacama salt flat, the world's largest lithium deposit where domestic producer SQM and U.S. firm Albemarle extract the metal.

The demonstration, led by local indigenous groups after an agreement was signed last month between SQM and state-run copper firm Codelco, was affecting SQM operations, said a source with knowledge of the matter.

SQM and Albemarle did not immediately comment.

The protest underscores a serious challenge to a plan by Chile, the No. 2 lithium producer, to impose more state control over the metal needed for batteries used to power the world's growing electric vehicle fleet.

Yermin Basques, head of the indigenous Toconao community, said local groups were blocking public roads that lead to mining operations in the south of the salt flat, preventing workers, supplies and lithium from entering or leaving.

Basques said indigenous communities were sidelined in the negotiation between SQM and Codelco, which strengthens state control of lithium in line with the plan announced by President Gabriel Boric in April.

"For us, there's no conversation. For us, it's just imposed," Basques said in an interview.

About 500 protesters were blocking six different spots on public roads in the south of the salt flat, he said, and were demanding Boric include them in talks between SQM and the government.

For much of last year, SQM and Codelco had been locked in talks over the future of lithium mining in the salt flat, home to 90% of Chile's lithium reserves. The country has the world's largest proven lithium reserves.

The December agreement calls for SQM to partner with Codelco for future lithium development and production in the Atacama, beginning in 2025 and running through 2060.

Basques, whose Toconao group is the largest in the Atacama Indigenous Council, said the government did not include the council in the agreement, despite recently announcing a dialogue table to discuss lithium mining in the Atacama.

He said protesters plan to block access to the salt flat until Boric travels to talk to them and abide by the original agreement.

"There has to be sensitivity, the respect that President Boric has always talked about," Basques said. "We invite him... to demonstrate what he has pledged."

Chile's mining ministry said it was monitoring the protests but declined to comment further.

(Reporting by Alexander Villegas and Daina Beth Solomon in Mexico City; Additional reporting by Natalia Ramos; Editing by Bill Berkrot)