Chile establishes new regulatory framework for desalination

Chile has introduced Law No. 21.813, establishing a specific regulatory framework for seawater desalination. Expected to take full effect by November 2027, the law addresses the growing need for water security, particularly for the copper mining industry. Projections indicate that seawater's share of total water consumption in copper mining could rise from 40.7% in 2024 to 67.6% by 2034.

The new legislation grants special desalination concessions for up to 30 years, renewable once, and centralizes authority within the Dirección General de Aguas. It also allows authorities to require projects to allocate up to 5% of their capacity for human consumption or sanitation. While not a new tax, the law introduces various economic implications regarding easements, fixed asset investments, and depreciation benefits.

This regulatory shift occurs amidst a broader debate regarding the complexity of Chile's natural resource management. Current systems for mining, aquaculture, and water rights feature asymmetrical rules concerning taxation, duration, and expiration. For instance, while mining concessions involve progressive patents for inactivity, water rights involve penalties for non-use to prevent speculation. These varying regulatory layers create a complex landscape for investors navigating resource rights and concessions.