1) I don't see this claim anywhere in the announcements (namely, that the underground lithium deposit is 1km away or that it can't be extracted underground). The comments made by these people was in regard to the cancellation of the PIV which was for the above ground mine.
2) Below I've put the 3-location options for the hydroxide plant and mine entry labelled A, B and C as outlined in the INF presentation. The yellow circles are 2km in radius. The red circle is roughly over the top of the underground lithium deposit, again with a 2km radius. The deposit obviously extends in all directions including south. Note the quarry mine (now closed) even closer to the city and obviously the mountain also had an open cut tin mine (also now closed).
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