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Antofagasta Signs $1.5 Billion Deal for Water Transport System in Chile Mine

 Antofagasta has signed a $1.5-billion investment deal to enhance the water supply for its Chilean mining operations. The agreement involves Madrid-based Almar Water Solutions and Chilean power transmission company Transelec, focusing on establishing a water transportation system that will supply non-desalinated seawater to the Centinela mining operation.

In 2024, Centinela’s operations are set to receive $600 million from the consortium. This investment comes after Chile’s SMA environmental regulator filed two charges against the Centinela copper deposit in 2022 for its impact on a water source and local wildlife.

Context

Analysts have predicted a copper deficit starting this year, exacerbated by Panama’s closure order for First Quantum’s mine and supply cuts by producers like Anglo American and Vale Base Metals for 2024 and 2025. While copper demand is expected to grow steadily, recent price increases are partially attributed to speculative activity.

Why It’s Important

Chile, the base of Antofagasta’s operations, has experienced a 15-year drought, depleting reservoirs and raising concerns over the freshwater supply. Amid a bullish outlook for copper, miners and countries aim to increase and reopen copper production.

By The Numbers

According to the World Resources Institute, nearly 16% of the world’s land-based critical mineral mines and districts are in areas with high or extremely high levels of water stress. The project at Centinela includes constructing two 144 km-long water pipelines to transport seawater to the ports, facilitating the mine’s expansion. This expansion would boost Centinela’s annual copper output by 140,000 tons, positioning it among the world’s top 15 copper mines by output.

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