Huasco Water

Digging around with AI on Huasco water, comes up with the below

Beyond Hot Chili’s Costa Fuego copper-gold project,several mining operations in Chile’s Huasco Valley are poised to utilize waterresources from the Huasco Water project—a joint venture between Hot Chili (80%)and Compañía Minera del Pacífico (CMP, 20%). This initiative aims to supplyseawater and desalinated water to various stakeholders in the region.

Key Mining ProjectsConsidering Huasco Water Resources:

1.CMP’s Los Colorados IronOre Mine
CMP,a partner in the Huasco Water venture, plans to source approximately 200 litersper second (L/s) of desalinated water for its Los Colorados mine, one ofChile’s largest iron ore operations.

2.Teck Resources – NuevaUniónProject
TeckResources, in collaboration with Newmont Corporation, is developing theNuevaUnión project, which merges the Relincho and El Morro deposits. Whilespecific water sourcing agreements are not publicly disclosed, the project’sproximity to the Huasco Water infrastructure suggests potential collaboration.

3.Nutram SpA
Nutramoperates a copper processing facility in Vallenar. A memorandum ofunderstanding (MOU) is in place for Nutram to receive desalinated water fromHuasco Water in future development stages.

4.Agrosuper
Althoughnot a mining company, Agrosuper—a major food producer—has signed an MOU toaccess desalinated water from Huasco Water, indicating the project’s broaderregional significance.

Collectively, theseprojects contribute to an estimated future demand of approximately 3,700 L/s ofdesalinated water in the Huasco Valley, underscoring the critical role ofHuasco Water in supporting both mining and non-mining sectors in thiswater-stressed region.

The likelihood of the Huasco Water project securingits desalination license appears favorable, though it is not yet finalized.Here’s an overview of the current status:

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ProgressToward Licensing

• Priority Status Granted: In April 2025, Chile’s Ministry of Economy registered the Huasco Water project with the Office for Sustainable Project Management (GPS), assigning it priority status. This designation aims to streamline administrative approvals and centralize permitting processes, including the Environmental Impact Assessment (EIA) and maritime concession applications.
• Existing Maritime Concession: Huasco Water holds the only active maritime water concession in the Huasco Valley region, providing it with a first-mover advantage for seawater extraction.
• Advanced Permitting: The project is over a year into the regulatory application process for desalinated water supply, with baseline studies for the EIA completed.

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PendingApprovals

• Second Maritime Concession: An application for a second maritime concession is still under review.
• Environmental Impact Assessment (EIA): The EIA for the desalination component is pending submission. While baseline studies are complete, the formal assessment process has yet to commence.

ProjectViability

• Economic Feasibility: A Pre-Feasibility Study (PFS) indicates strong economics for the project, with a post-tax Net Present Value (NPV) of US$122 million and an Internal Rate of Return (IRR) of 19% for Stage 1, which involves supplying 500 liters per second of seawater.
• Strategic Partnerships: Memorandums of Understanding (MOUs) are in place with potential off-takers, including Hot Chili’s Costa Fuego project and CMP’s Los Colorados mine, indicating a solid demand base for the desalinated water supply.

While the HuascoWater project has made significant strides toward securing its desalinationlicense, including obtaining priority status and holding an active maritimeconcession, key approvals such as the second maritime concession and the EIAare still pending. Given the project’s advanced permitting stage, economicviability, and strategic partnerships, it is well-positioned to obtain thenecessary licenses, though the final approvals are still forthcoming.

The Huasco Waterproject (by Hot Chili Ltd.) and Antofagasta’s water business (sold in 2022) areboth examples of private desalination and water infrastructure ventures inChile serving the mining sector. However, they differ significantly in scale,maturity, and strategic positioning.

Here’s a detailedcomparison:

1.

Ownershipand Business Model

	Aspect	Huasco Water	Antofagasta’s Water Business (ADESA)
1	Owner	Hot Chili Ltd (80%), CMP (20%)	Formerly Antofagasta PLC (100%)
2	Structure	Greenfield project (early-stage)	Mature, operating asset
3	Sale Value	Not sold (internal growth asset)	$965 million (sold to Columbia Capital & others in 2022)
4	Revenue Focus	B2B desalinated water supply to multiple clients	B2B and Antofagasta’s ownÂ

2.

ProjectScope & Stage

	Aspect	Huasco Water	Antofagasta Water (ADESA)
1	Status	Pre-construction, PFS completed	Fully built and operating
2	Desal Capacity (Stage 1)	500 L/s planned (expandable to 1,000+ L/s)	Over 1,000 L/s existing
3	Permits	In progress (priority status granted)	Fully permitted
4	Off-takers	CMP, Costa Fuego, Nutram (MOUs sign

3.

StrategicRole in Chilean Mining

	Factor	Huasco Water	Antofagasta Water (ADESA)
1	Role in Mining	Key enabler for new mining projects in Region III	Core utility supporting existing large-scale mines
2	Location	Huasco Valley (Atacama Region)	Coquimbo/Antofagasta Region
3	Water Scarcity Challenge	High – region under pressure from agriculture and mining

4.

EconomicPotential

• Huasco Water:
  
  
  • Estimated post-tax NPV of US$122M for Stage 1.
  • Potential long-term value of ~US$1.3 billion (if fully scaled and sold, according to Hot Chili projections).
  • Currently at value inflection point if licenses and contracts materialize.
• Antofagasta Water:
  
  
  • Sold for $965M, representing a mature utility-style asset with proven earnings and contracts.

5.

KeyDifferences

	Category	Huasco Water	Antofagasta’s Water Business
1	Development Stage	Early-stage (growth, higher risk)	Fully developed (stable, lower risk)
2	Market Position	Competitive, with room for scale	Dominant in its region
3	Strategic Focus	Enabling future mining capacity

Summary

Huasco Water is astrategic growth project with strong fundamentals and government backing but isstill early in development. If successful, it could become a valuableinfrastructure asset similar in model (but not scale yet) to what Antofagasta’swater business became—a core utility for the mining sector.

Antofagasta’s ADESAbusiness was a mature, revenue-generating asset, which explains its nearly $1billion sale value. Huasco Water could eventually be monetized or spun out in asimilar fashion once it’s built and operational.