BHP explores sale of Chilean desalination plant, power lines

BHP (ASX: BHP) is exploring the sale of a desalination plant in Chile, along with its electricity transmission assets, extending a strategy of monetizing infrastructure as the world’s biggest miner concentrates capital on its core copper business, according to people familiar with the matter.

The process is at an early stage and no final decision has been made, said the people, who asked not to be identified discussing confidential information. The assets could be valued at a combined $1.5 billion to $2 billion, with the electricity transmission lines expected to raise about $1 billion to $1.3 billion and the desalination plant roughly $500 million to $700 million, the people said. The valuation, timing and structure of any transaction remain under discussion. BHP declined to comment.

The Puerto Coloso desalination plant serves BHP’s Escondida, the world’s largest copper mine. It is one of the world’s biggest reverse osmosis plants, pumping 3,800 liters per second to an altitude of over 3,200 meters to supply the operation.

No potential bidders have been identified given the deal has not yet gone live. One person confirmed that any buyer would likely enter into long-term service agreements with BHP, providing stable cash flows backed by some of the world’s largest copper mines. 

The transaction would mark the latest step in BHP’s plan to unlock as much as $10 billion from infrastructure, by-products and other non-core assets to help fund its expanding copper business. The company has already agreed to sell a 49% stake in power transmission assets serving its Western Australian iron ore operations and signed a $4.3 billion silver streaming deal tied to the Antamina mine in Peru. Diario Financiero first reported the sale of the transmission assets last month.

The company has increasingly focused on copper and potash, exiting petroleum, shrinking its coal exposure and deploying capital into large-scale copper growth projects including the Escondida expansion and the Vicuña copper district in Argentina.

(By Carolina Gonzalez and James Attwood)