Antofagasta fined for breaking water extraction rules in drought-ridden Chilean region

Chile’s General Water Directorate (DGA) issued a $695,000 fine to Antofagasta Minerals’ (LON: ANTO) Minera Los Pelambres for the unauthorized extraction of surface and groundwater and for not complying with the water distribution rules established by the Choapa River Surveillance Board.

The fine resulted from an investigation for possible breaches of the Water Code launched in July 2021 by the Regional Water Directorate, which belongs to the Coquimbo Public Infrastructure Ministry.

In addition to the financial penalty, Los Pelambres was ordered to immediately stop unauthorized water extractions and abide by the water distribution rules established by the Choapa River Surveillance Board. 

The miner was also urged to comply with each of the resolutions granted in its water use permit and to send to the DGA all the records of water extractions that must be reported through the Effective Extractions Monitoring System so that the directorate can verify that the water being extracted corresponds to the water use right granted.

“After the on-site inspection and analysis of all the background information and additional requests made, it was concluded that in the case of four intakes and eight wells, more water was extracted than what was allowed according to the 6% pro rata that the Choapa River Surveillance Board authorized based on the existing river flow and according to the prevailing scarcity conditions,” the DGA said in a media statement. “Additionally, in those same four intakes or collection sites of surface waters, Minera Pelambres did not comply with the same proration rule that governed the rest of the Choapa River Surveillance Board users, that is, the mining company did not comply with the DGA requirement to respect the Board’s distribution standard.”

The Directorate pointed out that at the time of the field inspection, a water scarcity zone decree was in force in the Coquimbo region, the Choapa River basin was exhausted and the hydrogeological sector of Choapa Alto had been declared a prohibition zone. These conditions were considered aggravating factors that increased the amount of the fine. 

The central Coquimbo region has been experiencing severe drought for the past 15 years. Thus, three water redistribution agreements have been approved in the Limarí River basin to prioritize human consumption, while in Choapa, the agreement that ordered water redistribution in the jurisdiction of the Choapa River Surveillance Board, in accordance with article 314 of the Water Code on severe drought, was approved with conditions.

Back in December 2022, Minera Los Pelambres filed an appeal against the DGA Exempt Resolution No. 3579 to counteract the Choapa River agreement. However, it was rejected by the Santiago Court of Appeal on December 12, 2023.

Water is needed in copper smelting, and in the concentrator, which breaks down raw ore and processes it into usable material.

In March 2024, Antofagasta inaugurated a more than $2-billion desalination plant for Los Pelambres, aimed at relieving the effects of the drought and supporting the operation’s multi-billion dollar expansion.