BHP May Sell Its Chile Desalination Plant That Feeds the Top Copper Mine

Mining

The world’s biggest miner is weighing a sale that would hand a new owner the water and power feeding its prize copper mine, as a BHP Chile desalination and transmission deal takes shape.

According to people cited by Bloomberg, BHP is exploring the sale of a desalination plant in Chile along with its electricity transmission assets. The process is at an early stage, with no final decision made.

For a foreign investor, the logic is simple. BHP wants to free up cash tied in infrastructure and pour it into the copper the energy transition is hungry for.

What the BHP Chile desalination sale involves

The numbers are large. Taken together, the assets could be worth between one and a half and two billion dollars, the people said.

The two pieces price differently. The transmission lines could raise about one billion to one point three billion dollars, and the desalination plant roughly five hundred to seven hundred million.

The water asset is strategic. The Puerto Coloso plant serves Escondida, the largest copper mine on earth, which now runs entirely on desalinated seawater.

BHP built that capability at cost. It has invested more than four billion dollars in two desalination plants to end Escondida’s use of fresh water.

Why the BHP Chile desalination move matters

It extends a clear strategy. The move widens a plan floated in June to sell around a thousand kilometres of power lines feeding BHP’s northern Chile mines.

The pattern is company-wide. BHP has exited oil, shrunk its coal exposure and sold grid assets in Australia, all to concentrate capital on copper and potash.

The buyers are predictable. Infrastructure feeding a mine offers steady, long-term demand, appealing to transmission firms, utilities and pension or infrastructure funds.

The guaranteed demand is the prize. A mine cannot run without power and water, so whoever owns that infrastructure collects predictable income for as long as the copper flows.

For an outside reader, the read is twofold. A major is narrowing its focus to copper, and mine-critical infrastructure with locked-in demand is coming to market.

The copper case is strong. Escondida had its best output in seventeen years in the last financial year, and BHP has filed a multibillion-dollar permit for a new concentrator there.

The growth reaches beyond Chile. BHP and a partner have won approval for the Vicuna copper district straddling Argentina and Chile, a build-out that could run into the tens of billions.

Water is central to that push. Chile’s mines increasingly rely on desalinated seawater as freshwater grows scarce, making the plants themselves valuable, long-life assets.

A caveat applies throughout. BHP has declined to comment, and the valuation, timing and structure of any deal all remain under discussion.

The backdrop is a national push. Chile’s share of world copper has slipped over the past decade, and the government is courting fresh mine investment to reverse the slide.

There is a template for the sale. BHP raised roughly two billion dollars selling a stake in comparable grid assets serving its Australian iron ore business, a deal now guiding the Chile process.

More: Chile news in English, every day from The Rio Times.

Frequently Asked Questions

What is BHP selling in Chile?

BHP is exploring the sale of a desalination plant that supplies its Escondida copper mine, along with about a thousand kilometres of power transmission lines serving its northern Chile operations. Together the assets could fetch between one and a half and two billion dollars.

Why is BHP selling this infrastructure?

BHP is monetising infrastructure to concentrate capital on its core copper business, amid rising demand tied to electrification and the energy transition. The move follows earlier sales of grid assets in Australia and a June plan to divest its Chilean power lines.

Who might buy the BHP Chile desalination and power assets?

Likely bidders include specialist transmission companies, utilities and institutional investors such as pension and infrastructure funds. They are drawn by the steady, long-term demand of infrastructure that a working copper mine cannot operate without.