Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Chile's parched mines race for an increasingly scarce commodity: water

Commodities May 06, 2022 06:30AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: Reuters journalist Natalia Ramos uses her mobile phone to takes pictures of a yard with native plants better equipped to grow in a drier environment, while Chile is suffering its worst drought in decades, in a high-income neighborhood of Santi 2/2

By Fabian Cambero

SANTIAGO (Reuters) - A record-breaking drought in Chile is impacting mining operations and forcing companies to escalate their search for more sources of water, from water treatment and pricey desalination plants to even encouraging workers to use less water in the shower.

The Andean nation, the world's no. 1 copper producer and the no. 2 producer of battery metal lithium, is battling a historic drought that is now entering its 13th year. That has led capital Santiago to roll out unprecedented plans to ration water for residents.

Mines are also feeling the effects.

Anglo American (LON:AAL)'s flagship Los Bronces mine in central Chile saw production fall 17% year-on-year in the first quarter of 2022, partly due to water scarcity, the firm said in April. Antofagasta (LON:ANTO) Minerals said drought led to a 24% first-quarter drop in production at its Los Pelambres mine.

Tensions over water use having been building over years for Chile's miners, who need it for pumping minerals like lithium to the surface, copper smelting, and in the concentrator, which breaks down raw ore and processes it into usable material.

Traditionally, they have relied on continental waters - land-based water from lakes, rivers and reservoirs.

"Our main challenge is to find other sources beyond continental waters," Maximo Pacheco, chairman of state-owned mining giant Codelco, told Reuters.

Pacheco said Codelco was planning to recycle more water and reduce water use through efficiency savings, but gave few details on specific measures.

Mining firms such as Anglo American and Antofagasta have targeted tailings of mine waste to increase recirculation, reduced water loss from pipes, and reused greywater.

'EVERY DROP COUNTS'

In Los Pelambres in the northern region of Coquimbo, mine workers are reminded as they eat their lunch to reduce personal water use by screens around the dining room, part of the mine's "Every Drop Counts" program to save water.

Antofagasta's mine also has a desalination plant coming online in the second half of the year and is targeting 90% of the mine's water coming from the ocean or recirculation by 2025.

Jorge Cantallopts, head of research at government copper commission Cochilco, told Reuters that mines high up in the Andes in central Chile were facing the biggest challenge, with the drought likely to persist and issues creating desalination plants far from the ocean.

Cantallopts pointed to Los Bronces as the most notable example, but said others like Codelco's Andina and El Teniente could soon confront similar issues.

"They will face the same problems in a few years and we have to do something," he said.

Mining undersecretary Willy Kracht told Reuters the government was pushing mining firms to share water infrastructure and plans to establish a forum to boost coordination.

Anglo American said in response to Reuters queries that Los Bronces was looking to make production more efficient and find water sources that "don't compete with human consumption."

The firm has already increased water efficiency and reduced freshwater extraction, though it has warned its copper production projections of 660,000 to 750,000 tonnes this year could be affected by water availability and COVID-19 impacts. 

POLITICS OF WATER

Water use is also becoming increasingly political, with leftist President Gabriel Boric keen to toughen environmental regulations.

Regulators have already looked to sue or fine some mining firms for excess water use, especially in the Atacama desert region, a major source of lithium which is in hot demand to make electric vehicle batteries.

Cochilco estimates fresh water use will decline by 45% by 2032 due to desalination, according to a report last month. But the process is expensive, uses lots of electricity, and is not always feasible in high-altitude Andean regions inland.

BHP Group (NYSE:BHP), an early mover, now meets water demand at its huge Escondida mine with the technology and has a desalination plant at its Spence mine, but still depends on continental waters for the smaller Cerro Colorado deposit.

Antofagasta has said that the continuity of its Zaldivar mine depends on the extension of continental water rights since its size would not justify the cost of a desalination plant.

Kracht said protecting water resources and the environment and spurring economic growth in the mining-dependent country was a tough balancing act.

"We have to take care of this drought. Then there's climate change and policies being promoted at a global level, but we are also being tasked to develop more mining. So there is a kind of contradiction we have to learn how to balance," he said.

Chile's parched mines race for an increasingly scarce commodity: water
 

Related Articles

Oil rises on renewed gasoline demand, weak dollar
Oil rises on renewed gasoline demand, weak dollar By Reuters - Aug 10, 2022 7

By David Gaffen NEW YORK (Reuters) -Oil prices rose on Wednesday, rebounding from losses early in the session, helped by encouraging figures on U.S. gasoline demand and as...

Gold Hits 5-Week High on Softening U.S. Inflation 
Gold Hits 5-Week High on Softening U.S. Inflation  By Investing.com - Aug 10, 2022

By Barani Krishnan Investing.com -- U.S. inflation is retreating as many expected it to. The question is where will gold go from here. Gold prices flew to five-week highs on...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
nagesh nanjundappa
nagesh nanjundappa May 06, 2022 12:28PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
so, what Is the effect on copper stocs from this ?
nagesh nanjundappa
nagesh nanjundappa May 06, 2022 12:28PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
so, what Is the effect on copper stocs from this ?
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email