Techno News

Hot Chili Advances Regional Water Supply Opportunity

asianwater

Hot Chili Limited is pleased to report that the Company has completed an initial concept study for a potential water supply business for the Huasco valley region of Chile.

Hot Chili holds the only granted maritime water concession and most necessary permits to provide critical water access to the Huasco valley region following over a decade of permitting advance for the Company’s coastal range, Costa Fuego copper-gold project.

While Costa Fuego’s mine development plan considers the use of raw seawater for future processing, the Water Supply Concept Study confirms potential to also develop a large, multi-user, desalination water supply business.

The Study outlines an opportunity to develop a potentially 100% renewable energy driven desalination water business to supply community, agricultural and new mining demand of up to 3,700 litres per second over the long-term. Staged development scenarios were assessed considering an initial development of a 300 l/s desalination plant being supported by potential foundation off take partners, including Hot Chili.

Water scarcity in the Atacama region of South America is one of the largest challenges facing new global copper supply.

Leveraging Hot Chili’s water assets to enable the development of multiple, nearby, large-scale copper projects, comes at a time where Chile’s government is actively encouraging investment in multi-user desalination water networks in the Atacama.

Similar market, regulatory and commercial conditions occurred in Chile’s energy market ahead of a surge in renewable power investment over the past decade, which has led to a dramatic reduction in energy costs across the Atacama region.

A Water Supply Business Case Study is now underway, and the Company has commenced early engagement with potential desalinated water customers. In addition, Hot Chili is also engaging with several large, potential water infrastructure partners.

Location of a conceptual multi-user, desalination water network in relation to infrastructure and potential customers in the Huasco valley region of the southern Atacama, Chile (Photos: CNW Group/Hot Chili Limited)
View over Hot Chili’s coastal land access site for its approved Maritime concession, Huasco Chile

Key Outcomes from the Water Supply Concept Study

Market Opportunity

  • Located in the southern Atacama with a 150 km area of influence.
  • Multiple potential customers:
    • CMP (Los Colorados)
    • Nueva Union (Relincho and La Fortuna)
    • Lundin Group Developments (Josemaria, Filo del Sol and Los Helados)
    • Hot Chili (Costa Fuego)
    • Huasco Valley Communities (multi-purpose)
  • Total water demand estimated at over 3,700 l/s in the long-term
  • Initial stage of development estimates water demand of 300 l/s including Hot Chili as potential foundation customer
  • Long term business from which other industrial/mining projects can be incorporated

Engineering

  • Infrastructure/assets considered: Water intake, desalination plant, discharge, distribution, waste collection, distribution points
  • Similar projects of this nature are being completed in Chile, e.g. Aguas Horizonte (Joint Venture between CODELCO and Marubeni)
  • Secured electrical concession rights to grid (Maintencillo substation)
  • Pipeline right of way secured from coast to Costa Fuego
  • Opportunity to utilise 100% renewable energy
  • Large amount of local engineering and construction expertise available
  • Access to existing infrastructure
  • Existing road network facilitate the supply to communities and reduce environmental/permitting risks

Stakeholder and Regulatory

  • Good relationship with local communities. Early engagement process ongoing
  • Granted maritime concession with land access (Huasco department) large enough to support the infrastructure needed
  • Second maritime concession filing process underway, near Hot Chili’s current maritime concession, to facilitate desalinated water supply
  • Legal/Environmental due diligence and market assessment supports the business opportunity case
  • Potential for direct government support being reviewed
  • Potential customer engagement commenced

Financing and Investment

  • Market interest is high from organisations recognising the opportunity to participate in an early life cycle project with strong foundations
  • Opportunity to explore a range of financing and investment options
  • Water Supply Concept Study provides basis for further detailed engineering studies for the full development plan to commence in March 2024

The Company looks forward to providing further updates on its Costa Fuego copper-gold project and Hot Chili’s advancement of economic, social and environmental synergies for the Huasco valley region.

Visit Hot Chili’s website at www.hotchili.net.au for more information.