01 September 2020
Water and power are two of the biggest inputs in any mining operation and there is often a sustainability tension between the two. Reducing fresh water use from local groundwater or surface water supplies at a mine and replacing it with more sustainable desalinated seawater or treated and recycled water usually requires using more energy. When those energy sources are fossil fuel based, any increase in energy usage also has an associated increase in greenhouse gas emissions.
At Escondida, operated by BHP in the Atacama Desert in Chile, we are soon to break the usual downsides of the water-energy nexus. Through a series of initiatives, we have substantially eliminated the use of groundwater, ceasing all pumping from the high Andean aquifers for operational water supply purposes. The shift to desalinated water supply has meant an initial increase in electricity use, associated costs and Scope 2 greenhouse gas emissions. However, through recent renegotiation and early termination of our fossil fuel based electricity supply contracts, from 2022 we will be moving to 100% renewable power sources at Escondida, reducing both our unit power costs and our energy carbon footprint.
The shift to renewables is important to the mine’s sustainability from both environmental and operational perspectives. While Escondida is one of the world’s largest copper mines, copper grades are expected to gradually decline over time. The mine, therefore, needs to process more ore to maintain its copper production, putting pressure on both water and power consumption.
Eliminating groundwater usage
In FY2020, Escondida made the decision to cease groundwater extraction from the high Andean aquifers and withdraw from the Environmental Impact Study process for the Monturaqui Project. This decision came 10 years ahead of BHP’s original commitment to do this and has eliminated the extraction of groundwater for operational supply purposes at the mine.
The groundwater, sourced from an aquifer located in Salar de Atacama, has been replaced with additional desalinated water from the expansion of the second desalination plant commissioned at Escondida in 2017. This second plant had an initial capacity of 2500 litres per second and enabled Escondida to cease water extraction from the Salar de Punta Negra aquifer. In FY2020, the plant was expanded to 3,800 litres per second, enabling us to also cease water extraction from Salar de Atacama.
These decisions were made possible in large part due to the US$4 billion invested in desalination plants at Escondida in the past 15 years as well as operational improvements that have reduced Escondida’s net water consumption per tonne of ore processed. The decisions also took account of engagement and consultation over several years with the Peine community aligned with our Indigenous Peoples Position Statement, and were backed by the Council of Atacameños Peoples.
Moving to renewable energy
In FY2020, BHP Minerals Americas announced renewable power supply contracts that will mean the BHP-operated Escondida and Spence copper mines in Chile will source all their power needs from renewables, commencing from FY2022. This will reduce the greenhouse gas emissions from their power consumption by 70 per cent, removing 3 million tonnes of CO2e a year compared with the fossil fuel based contracts they are replacing, equivalent to the annual emissions of around 700,000 petrol-driven cars.
The Minerals Americas power tender process represented 8 per cent of Chile’s national power demand and was divided into three time bands to ensure all bidders could present their best offers according to their technical capability. For example, a solar bidder was more competitive in the daytime band than if it had been required to bid across a 24/7 contract.
The two renewable power providers selected will each provide 3 Terawatt hours per year. The contracts include controls to ensure all power supplied comes from renewable sources, including an annual certification process with penalties and the right to reduce volume or terminate a contract due to non-compliance by the relevant provider. Both power providers have large portfolios of renewable sources, reducing the likelihood of a power shortage at Escondida or Spence in a situation where the power providers’ assets or facilities fail.
The saving on power costs is substantial. While there were one-off costs to break existing power supply contracts, the energy transition will reduce power unit costs by 22 per cent from FY2022. The new contracts meet Escondida and Spence’s current energy needs and include flexibility of up to a further 20 per cent more power supply to manage future power demand.
The tender process involved more than 40 BHP people from multiple functions who worked together to achieve this successful outcome. A similar process is now occurring within Minerals Australia using learnings from this tender.
Delivering a sustainable future for our Chilean copper assets
BHP’s global principles of sustainability and our position statements on climate change and water stewardship continue to guide us as we improve operational performance at our Chilean operated assets.
With the cessation of Monturaqui groundwater use and the move to 100% renewable energy contracts, BHP Minerals Americas has confirmed its commitment to the development of environmentally and socially sustainable mining that seeks to generate social value in the areas in which we operate.
We have received positive feedback on both initiatives from the Chilean Mining Council, Energy National Council, COP 25 representative, Energy Minister and Mining Minister. Our move to cease water extraction from the Andean underground aquifers was also positively received by local Indigenous communities, academic institutions and regional regulatory authorities.