Name of the Project
Huasco Water project.

Location
Huasco Valley, Chile.

Project Owner/s
Mineral exploration company Hot Chili.

Project Description
The project proposes a multistage seawater and desalinated-water supply initiative designed to meet long-term regional water needs. 

The project will be undertaken in three phases. Stage 1 involves the development of seawater infrastructure capable of delivering 500 ℓ/s to Hot Chili’s Costa Fuego copper/gold project under a 20-year offtake agreement, formalised through a memorandum of understanding.

Stage 2, which builds on Stage 1 infrastructure, will expand capacity to 1 300 ℓ/s of desalinated water, while Stage 3 envisions a further expansion to 2 300 ℓ/s.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
Stage 1 of the project has an after-tax net present value (NPV), at an 8% discount rate, of $122-million and an internal rate of return (IRR) of 19%, with a payback of 4.5 years. Stage 2’s after-tax NPV is estimated at $977-million with the same IRR of 19% and a payback of four years.

Capital Expenditure
The estimated capital cost for Stage 1 seawater infrastructure is $151-million. Stage 2, which includes desalination and expanded infrastructure, is estimated at $1.4-billion.

Planned Start/End Date
Initial seawater supply under Stage 1 is targeted for the end of the decade. Subsequent stages are planned to follow, in line with infrastructure development and demand growth.

Latest Developments
The company has completed a preliminary feasibility study (PFS) for Stage 1 and 2. Permits have been secured for key components of Stage 1, including a maritime water concession, coastal land access, pipeline easements and connection to the national electrical grid. 

A memorandum of understanding has been signed for the initial offtake with Costa Fuego. Discussions are ongoing with potential customers for stages 2 and 3.

Key Contracts, Suppliers and Consultants
Not disclosed.

Contact Details for Project Information
Hot Chili, tel +61 8 9315 9009 or email admin@hotchili.net.au.