REFILE-As rivers dry up, Chile copper mines turn to the Pacific for water – by Anthony Esposito and Fabian Cambero (Reuters U.S. – April 12, 2015)

(Reuters) – Alvaro Badillo remembers a time when his dad would take him fishing in the stream just a stone’s throw away from the dusty streets of their small hometown of Caimanes in central Chile.

Now, like countless communities that dot the arid valleys north of the capital, Santiago, Caimanes is left with a dry riverbed. The culprit? That depends on who you ask.

For many in the town of 1,200 people, the answer lies just a few miles upstream: a 470 foot tall wall that stretches nearly a half-mile straight across the valley. It is the tailings dam for Los Pelambres, Chilean miner Antofagasta Plc’s flagship copper mine, which holds enough leftover processed rock to fill some 140,000 Olympic swimming pools.

For its part, Antofagasta blames an eight-year drought in Chile for the evaporation of already slim water resources, and says the canals it built to redirect rain water have minimized the impact on the stream.

Both sides have findings that support their arguments and are thrashing them out in a court battle that could stop work at one of the world’s biggest copper mines.

The clash illustrates the challenges facing leading copper producer Chile as communities and water-intensive industries such as mining try to coexist and vie for shrinking water resources.

“I believe Pelambres is one of the best examples, if we look at everything that has happened, to figure out the weak points in (our) legislation and the way to do things differently,” Antofagasta chief executive Diego Hernandez told Reuters.

Accounting for about a third of the world’s copper supply, with output this year expected to reach 5.94 million tonnes, Chile’s domestic conflicts reverberate through the global market. Any prolonged disruption at Los Pelambres could tip a finely balanced copper market into deficit, boosting prices, analysts said.

The issue of water shortages and strained relations with communities is sure to be a topic of heated discussion among the world’s biggest copper miners attending the CRU Copper conference in Santiago this week.

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