Spotlight: Chile's biggest desalination project

Jan 09, 2015 12:00 AM

One of the biggest mining sector projects under way in Chile is not a mine, but rather a desalination plant.

Minera Escondida's water supply project (EWS) is so large that it is billed as a separate endeavor – with its own budget, risk profile and approval processes – even though it owes its existence to expanding copper production.

EWS is designed to provide 2,500 l/s of desalinated seawater to lock in long-term water supply for the Escondida mine as it expands, providing greater water security and reducing the company's consumption of non-renewable freshwater.

Total investment will be US$3.43 bn split among the partners, with operator BHP Billiton covering its 57.5% share. Apart from the coastal desalination plant itself, the project includes two pipelines, four high-pressure pump stations, a reservoir at the mine site and high-voltage infrastructure to power the system.

Bechtel is providing engineering, project management and construction services on the project.

Construction began upon board approval in July 2013 and as of October 2014 was 17% complete. Commissioning is scheduled for calendar year 2017, and not a moment too soon. EWS is meant to supply water to Escondida's organic growth project 1, a new US$4.20bn, 152,000t/d copper concentrator which upon startup in 1H15 will have to source its water from aquifers and an existing 500l/s desalination system.

"Water availability is the bottleneck at Escondida until FY18," according to a November presentation by BHP Billiton CFO Peter Beaven, formerly president of the company's copper division.

Indeed, increasing throughput at Escondida in the December 2014 quarter was expected to put sufficient strain on water resources as to cause deferral of some production to the March 2015 quarter.

While Escondida's is the largest desalination initiative in Chile, the company is far from alone in looking to the sea to support its mining operations. Sixteen mining-related desalination projects requiring a total US$10bn in capital expenditure are under construction or consideration. Nine plants are in operation today.

This also highlights the growing share of support infrastructure in the mining sector's capital expenditure plans, as water and energy scarcity and cost have put project development in jeopardy and led companies to seek in-house supply, a trend nonexistent less than a decade ago. Projects like EWS are now a necessary part of mining investment.

Alexander's Commentary

Change of face - change of phase

In the period of July 20 till August 3, 2015, Alexander will be out of the office and the site will not or only irreg

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