Feb. 14 (Bloomberg) -- In the Atacama Desert in northern Chile, 158,438 residents of the city of Copiapo suffered daily cutoffs of tap water last year as Anglo American Plc and other companies helped suck nearby aquifers dry for their mines. With little water left for drinking or mining, the government of President Sebastian Pinera convinced the companies to seek a solution to the water crisis 60 kilometers away from Copiapo -- on the shores of the Pacific Ocean.
London-based Anglo American is spending $107 million to build a desalination plant on the coast that will pump about 120 liters (32 gallons) a second of water through the desert to its Mantoverde copper mine. Set for completion in the second half of this year, the project will provide enough salt-free water, which is used to separate copper from ore, to operate the mine. Two other companies are building similar desalination plants in an effort to keep Chile’s mining-driven economic boom alive, Bloomberg Markets magazine will report in its March issue.
“If we don’t take these steps today, it will become an obstacle to the development of our country,” says Loreto Silva, Chile’s minister of public works.
As the global population soars by about 74 million people a year, water shortages are becoming more severe. About 300 million people in rural China had no access to safe drinking water in 2005, according to the website of China’s Water Resources Ministry. At current rates of growth, the demand for water worldwide may exceed supplies by 40 percent by 2030, according to the World Bank-sponsored 2030 Water Resources Group.
Desalination isn’t a panacea -- it’s expensive and harmful to marine life -- but governments desperate for supplies are ramping up construction of plants. Some of the first industrial- scale plants emerged in the oil-rich Middle East in the 1950s. Early on, the only method for extracting salt from seawater was by boiling it and capturing the vapors, a costly and energy- intensive process.
As salt-filtering technologies replace boiling and reduce the price of desalinated water, governments in Australia, China, Israel, the United Arab Emirates and the U.S. are tapping the oceans. From 2001 through 2011, the global capacity of desalinated water plants more than doubled to 70.8 million cubic meters (2.5 billion cubic feet) a day, according to an annual report published by the International Desalination Association and industry consultant Global Water Intelligence.
There are almost 16,000 plants operating today, according to the association, with Saudi Arabia standing out as the biggest producer. And the industry is now growing about 15 percent a year, says Julio Zorrilla, an international construction director at Acciona Agua, the water unit of Acciona SA, a Spanish renewable energy company.
“As populations grow, countries will have no option but to desalinate water,” he says.
A project in Southern California faced stiff opposition from consumers and environmental groups. San Diego, confronting a water crunch as supplies from Northern California and the Colorado River dwindle, approved a $922 million coastal desalination plant to provide 7 percent of the city’s drinking water last year after almost a decade of legal challenges and debates.
San Diego residents protested at public hearings to stop the proposal because the costs of desalination may increase the average household water bill by about $5 to $7 a month when the plant is completed in 2016, according to the San Diego County Water Authority.
“It gets down to the cost of energy,” says Jeffrey Kightlinger, general manager of the Metropolitan Water District of Southern California.
Harming Marine Life
San Diego Coastkeeper and Surf-rider Foundation, two California environmental groups, sued in state court to block approval of the project because of the harm it will cause to marine organisms as hundreds of millions of gallons of seawater are sucked into the plant each day.
Stamford, Connecticut-based Poseidon Resources Corp., the plant’s owner, plans to use water that has already been drawn from the ocean to cool a nearby power station. The lawsuits said the desalination plant will require the power station to pull in even more water, adding to destruction of sea life.
A California court dismissed the lawsuits. Poseidon will also restore 66 hectares (163 acres) of wetlands in Southern California to mitigate the plant’s harmful impact.
The industry has introduced innovations that have reduced the costs of desalinating water. Companies started to adopt technologies to pump water through membrane filters to capture salt in the 1990s. That brought down the price of desalinated water to less than $1 a cubic meter from $3, says Ashvalom Felber, chief executive officer of IDE Technologies Ltd., one of the world’s three largest manufacturers of desalination plants.
And technology developed by San Leandro, California-based Energy Recovery Inc. and other companies that recirculates water in filtering plants has cut energy expenses by as much as 60 percent, says Energy Recovery CEO Tom Rooney. The technology lessens the cost of a cubic meter of desalinated water to about 50 cents, Felber says.
Fresh ground supplies, by comparison, run less than 20 cents, according to the 2030 Water Resources Group.
“The industry keeps evolving, and prices keep coming down,” Felber says.
Desalination plants will mostly spring up in regions willing to pay a premium for water to keep their economies growing, Rooney says. China plans to more than triple its production to 2.2 million cubic meters a day by 2015, according to the Chinese National Development and Reform Commission. The water will supply 15 percent of the needs of China’s factories along its industrial eastern seaboard, the commission says.
The country is on track to become the world’s biggest producer of desalinated water, Rooney says.
“In places like China, desalination is an economic slam- dunk,” he says.