Salt Could Make Copper Here A Lot More Expensive

There are many reasons Chile produces 30% of the world’s copper. Not all of them geological.

The country is fortunate to have substantial mineral deposits in the right places. Namely, the northern Atacama desert. Where a sparse population–along with limited flora and fauna–makes permitting mines a lot more straightforward.

But it looks like that advantage may be disappearing, judging from events last week.

A bill submitted to the Chilean congress is seeking some critical changes to the ways mines are approved in the country. Specifically in terms of water usage for operations.

Under the proposed law, miners would now be required to incorporate desalinated seawater into their operations. In an effort to preserve the freshwater that is scarce in the desert copper-mining region. The law would affect large operations, drawing more than 150 litres per second of process water.

This is of course, just an initial step. The bill will now go for discussion in the lower house of congress. With no guarantee it will pass to become law.

But this is worth keeping an eye on. If new water use rules do come to fruition, it will be a major change for the world’s biggest copper mining centre.

Desalination isn’t unheard of in Chile. Major mines like Escondida and Chuquicamata currently use seawater to cut down on freshwater use.

But the desalination process is expensive. And would likely raise the copper cost curve across most of Chile–and thus the world.

This will make existing mined output more expensive to produce. It could also be a headwind to the development of new projects in Chile. Where miners are already being hemmed in by expanding environmental laws that have halted a number of high-profile developments.

There’s no timeline on a final decision yet. We’ll see what the lawmakers say over the coming months.

Here’s to the salt of the Earth,

Dave Forest

dforest@piercepoints.com / @piercepoints / Facebook

Add a Comment

Your email address will not be published. Required fields are marked *