March 22, 2019 / 3:35 PM / 3 months ago

Miner Antofagasta expects water agreement with BHP for Zaldivar mine-media

SANTIAGO, March 22 (Reuters) - Chile's Antofagasta expects to reach an agreement with miner BHP to help ensure water supply at its Zalidvar copper mine in the country's northern desert, a company official told a Chilean newspaper on Friday.

Antofagasta needs access to water for the future development of its Zaldivar copper deposit, which is near BHP's Escondida mine, the world's largest copper mine. Zaldivar's size, however, does not justify investing in its own desalination plant to bring water in from the Pacific ocean, Antofagasta has said.

Both companies are seeking to extend existing permits to draw water from Chile's water-constrained Salar de Atacama, home to top lithium producers SQM and Albemarle. Chilean regulators last year implemented new restrictions on the salt flat amid concerns of dwindling water supplies .

"We are worried and working on that in conjunction with BHP. I think we are going to come up with a good solution. There is a range of options and the decision has to be win-win," Alfredo Atucha, vice president of administration and finance for Antofagasta, said to Chilean daily La Tercera.

"We have been negotiating for three or four months and we are nearing the end of that, I am hopeful that we will reach a good agreement," he added.

The executive did not specify the potential options, though La Tercera cited sources saying that Escondida could sell water from its desalination plant to Antofagasta.

Zaldivar is a joint project by Antofagasta and Barrick . In 2018, Zaldivar presented a study to Chile's environmental regulator with the aim of extending its operations until 2031, which will involve an investment of about $100 million in order to maintain its current production capacity. (Reporting by Fabian Cambero; writing by Cassandra Garrison Editing by Chizu Nomiyama)

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