Environmental Issues Analysis

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08 January 2007

The future of Northern Chile and water resources

Osamu Suzuki

Director of EDRA (Exploration y Development of Water Resources) www.edra.cl. Email: osuzuki@edra.cl

Increasing growth of the mining industry in Northern Chile has produced a strong demand of water to supply different new project and expansion of existing mines. On the other hand water and environment authorities have become more and more environmentalist. For this reason the normal scarcity of water provoked by the increasing water demand looks more serious and critical. The 2005 modification to the Water Code has introduced new requirements that increase the time to get the granting of a water right and the cost of the studies to demonstrate the sustainability of the resource. With the new requirement a clear difference is made between “Water Right” and the “Right to use the water”. To get the “right to use the water” the approval of the Early Warning Program (EWP) is necessary which is related with the possible negative effects to the environment. In many cases the EWP will be resolved together with the EIA that all mining project must submit to Regional Authorities, COREMA, who grants the environmental permits. Any company that foresee a future need of water for his project must consider that to get the water right granting will take al least four years and a minimum of 6 month to get the EWP approved. This discouraging picture become worst if we consider the lack of policy or rules about the amount of negative effects that must be accepted to obtain the benefits and development that each project brings. In turn, if there are negative effects, there is no clear policy on how should the compensation be worked through to mitigate the negative effect.

From historical times Northern Chile has been known as the most arid region of the world and in fact the scarce rain events are concentrated at Los Andes mountain range. Rains are mainly associated to the Bolivian Low Pressure Center and occasionally to the Western Pacific Rain Fronts.

The situation of water availability at the Region I, Region II and Region III is without doubt one of water resources deficit and also is clear that the water resource scarcity is limiting the development of those Regions specially the mining, industrial and agricultural activities. One can have an appreciation of the huge water demand by looking at the 18,000 l/s of water rights granted by the Dirección General de Aguas (DGA - the Chilean Water Authority), up to day and to the approximately more than 10,000 l/s in pending applications for new water rights granting. The opinion of the DGA is that that water resources are at the low limit and no more water rights can be granted, since their general water balance in each Region are negative. In other word the amount of water resources available calculated by the water authority is less that the amount of water rights already granted plus the pending application for new water rights.

We can point out that in general the water resources situation is actually becoming more serious due to the recent changes introduced to the Water Code and the technical criterion applied by the DGA. If the actual crisis is not solved in a short time a big collapse is expected for mining activity as only the actually running project will survive until the completion of the mine life and no new project that demands additional water rights will be constructed. If the dynamic of incorporate new mining projects is broken Northern Chile will gradually become a place with ghost towns or cities with a very poor economic activity as already happened with the nitrate industry in the past.

Changes in the Water Code and consequences

Only some of the changes will be commented, mainly those related with the water rights granting that make the legal procedure annoying and increasingly bureaucratic.

Ground Water Exploration

Considering that the water is a scarce resource if a company applies for an area that has been studying, many other companies or persons will show up interested and will apply for the same area and participate in the auction that will be won by the person or company that has more economic capability. In this case the benefit is not for the applicant who understand more the hydrogeology of the area but the petitioner with more money.

Early Warning Program
This requirement is oriented to those ground water users who do an intensive use of this resource. In Chile mining industry is the main intensive user of the ground Water and therefore they must fulfill this obligation. We can foresee that in a near future most of the industrial activities will be affected by this requirement.

The Early Warning Program (EWP) objective is to establish a monitoring system to avoid the negative effects of the ground water exploitation in the environment or to the water rights of third parties. The first section of the EWP must contain an assessment of all possible negative effects caused by the intensive pumping of the aquifer by the wells, whose water rights are being applied for. The assessment must be supported by mathematical models that allow extrapolation of the effects up to 50 years of pumping and the same period of recovery.

Once all possible negative effects are defined, the limits of the parameters that will be measured to avoid any environment damage must be set. Then the monitoring network must be planned specifying the parameters to be measured, the location and frequency of measurements.

The EWP must include the actions that should be taken in the case you are close or the defined limits are reached. Also a formal compromise must be included about the construction of the monitoring network as in many cases not all the monitoring wells or control points are completed or located at the right location.

Now because of the EWP, the granting of a water right takes at least 6 month more than before the change of the Water Code. Also earlier, the granting of the Water Right was enough to start using the water. Today you must get the Water Right and after that the approval of the EWP that gives you the Right to Use. The time to get the approval of the EWP will be longer if the negative effects are evident and affect part of the environment, the approval will be obtained after the Environmental Permit that all mining project must get from the Regional Government.

The requirement, to all mining projects, to approve the EWP, means that new projects that do not have water rights to day, must consider that the approval of the EWP will take 4 years, if there are no technical discrepancy with the DGA, after the granting of the ground water exploration concession.

Considering to the technical requirements to carry out the EWP and comparing to the technical requirement to approve an EIA (Environmental Impact Assessment) looks like the requirement of an EWP to the mining project is redundant, siince the approval of the EIA is obligatory. Then the requirement of the EWP approval only delays the process of water right granting and brings no benefit to the society as the obligations and limitation in the use of the water will be the same included in the environmental permit. We should realize that the authorities, based on the EIA, can limit the use of the water right to an environmental safe level. So is the intention of the DGA using the EWP to grant the “right to use de water”.

Technical Criteria
At Region I, II and III, the Chilean Andean Plateau develops entirely in a modern volcanic environment were the interaction of lava flux, ignimbrite, tuff, volcanic gaps, lifting, rotation and volcanic collapse molded the landscape. In this complex modern volcanic environment is very common to find wells that yield more than 100 l/s, which indicate the optimum hydrological conditions. The hydrological basins do not match to the hydrogeological basins as ground water flow in this volcanic environment is governed by the way the lava fluxes occurred how the faults moves and were the geological structures are located.

DGA has maintained an sceptical position to the definition of hydrogeological basin in modern volcanic environment, which at the end diminish the capability of the aquifers located in this type of environment. This attitude disappoint people who are exploring ground water in Northern Chile and all those that need ground water since the resource exist to be use by this community that need the water but that is not available because a basic discrepancy in the hydrogeological concepts with the DGA.

Conclusions

Considering that the water is a very scarce resource in Northern Chile, the change in the Water Code in relation with the auction of the ground water exploration concessions will favor the monopolization of the exploration concessions by the richest mining companies leaving the smaller mining projects belonging to less rich companies without feasibility what ever the benefit of the project.
The requirement to approve the EWP looks like it is redundant as the same aspects and more in detail must be study in the EIA that all mining project must submit to the environmental authorities.
If the government plan to promote the development of mining industry, agriculture or any industrial activity in Northern Chile, based on very strong technical arguments, they must analyze the possible development of the aquifers existing in modern volcanic environment as these aquifers are the only aquifer that are not fully developed. The rational exploitation of this type of aquifer will allow to supply future projects specially mining projects many of which will loose their feasibility in a short time meanwhile because the lack of water supply.
The requirement to approve the EWP to complete the granting of the water right increases the time to get it in al least 6 month.

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