Antofagasta signs $1.5 bln investment deal for water transport system in Chile mine
Updates with deal details in paragraphs 1-3
June 5 (Reuters) - London-listed Antofagasta ANTO.L on Wednesday signed a $1.5 billion investment deal to improve water supply at its Chile mining operations.
The deal, signed with a firm owned by Madrid-based Almar Water Solutions and Chile-based power transmission company Transelec, is to set up a water transportation system that will provide non-desalinated seawater for its Centinela mining operation.
Centinela's operations are set to receive $600 million in 2024 from the consortium.
In 2022, Chile's SMA environmental regulator filed two charges against the Centinela copper deposit due to its impact on a water source and local wildlife.
CONTEXT
Analysts have forecast a deficit of the red metal from this year as Panama ordered the closure of First Quantum's FM.TO mine and producers like Anglo American AAL.L and Vale Base Metals both cut their supply estimates for 2024 and 2025.
Copper demand is expected to grow steadily in the coming years, yet recent price jumps appear to be driven in part by speculative activity.
WHY IT'S IMPORTANT
Chile, where Antofagasta's operations are based, has suffered a 15-year drought, sucking water from reservoirs and sparking concern over the fresh water supply.
Additionally, miners and countries are looking to increase and reopen production of copper from mines amid a bullish outlook.
BY THE NUMBERS
The World Resources Institute said nearly 16% of the world's land-based critical mineral mines and districts are located in areas facing high or extremely high levels of water stress.
The project at Centinela in Chile includes the construction of two 144 km-long (89.48 miles) water pipelines that transports seawater to its ports and facilitates the expansion of the mine.
The expansion at Centinela would boost annual copper output from the Centinela mine by 140,000 tons, making it one of the world's top 15 such mines by output.
Reporting by Seher Dareen in Bengaluru; Editing by Arun Koyyur and Maju Samuel
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