Antofagasta PLC expects to secure water supply for its Zaldivar copper mine in Chile from BHP Group, which owns the nearby Escondida mine, Reuters reported March 22, citing a company official.
The size of the project, held in a 50/50 joint venture with Barrick Gold Corp., is not big enough to have its own desalination plant to use water from the Pacific Ocean, Antofagasta said.
Antofagasta and BHP are looking to extend the existing water permits for extraction from the Salar de Atacama salt flat, where Chilean regulators put up new restrictions due to declining water reserves.
"We are worried and working on that in conjunction with BHP. I think we are going to come up with a good solution," Antofagasta vice president of administration and finance Alfredo Atucha said.
Atucha added that negotiations have been going on for three to four months and are close to a conclusion.
The Zaldivar project requires a US$100 million investment to extend operations to 2031 while maintaining output.
Antofagasta's earnings attributable to shareholders for 2018 fell to US$543.7 million from US$750.6 million the year before, while revenue slid 0.3% to US$4.73 billion.