Better management could reduce the final cost of the resource by up to 30%, according to a study by Acades and Plusmining.
By Patricia Marchetti
The use of desalinated water in copper mining is no longer an option, but a structural factor for operations in the driest desert in the world, where currently 41% of the sector’s water demand is supplied by seawater.
However, according to a study conducted by the consulting firm Plusmining and the Chilean Desalination and Reuse Association (Acades), lengthy permitting processes, energy costs, and regulatory uncertainty are now the main factors driving up the unit cost of desalinated water in the country.
One of the report’s main findings indicates that between 80% and 90% of the total cost of producing and transporting desalinated water is explained by the combination of initial investment (Capex) and energy costs. In fact, in projects that combine desalination and pumping, the energy associated with pumping can account for more than half of total operating costs, which can even triple—compared to costs at the coast—in systems that must travel long distances to mining operations at high altitude.
“Desalination, in itself, is only one part of the system; water competitiveness depends on how that system is integrated into the country’s institutional and productive environment,” the report accessed by DF states.
One of the critical variables affecting the cost of desalinated water, according to the report, is project development time, which can extend between eight and 12 years across engineering, environmental assessment, and sectoral permitting.
This “significantly increases projectcosts by tying up capital and increasing exposure to regulatory uncertainty and litigation, ultimately directly affecting both the viability and the pace of desalination adoption in the industry,” said Juan Carlos Guajardo, CEO of Plusmining.
From a financial perspective, it is also noted that an increase of just one percentage point in the discount rate can compromise a project’s viability.
Regarding operations, the study identifies electricity as the main determinant: its costs represent between 20% and 30% of the final cost of water. Therefore, “the competitiveness of desalination is tied to the national electricity system’s ability o provide stable base prices and reduce transmission or congestion charges.”
Overall, considering that by 2034, 66% of the water used in copper mining is expected to come from the sea, the analysis suggests that strategic management of these variables could reduce unit costs by between 10% and 30%. Currently, 11 mining operations are supplied 100% by seawater, and four desalination plants
are under construction.
Source: Diario Financiero