How have Black & Veatch’s Chilean operations evolved since 2013?

Black & Veatch Chile has changed a lot since 2013. At the time, we were working on engineering a desalination plant at BHP Billiton’s Escondida mine called the Escondida Water Supply Project. We are currently commissioning that plant and it is the largest desalination plant in Latin America, as well as one of the largest in the world. We have just been awarded the contract to design the expansion of that plant. The plant’s capacity is 2,200 liters per second and it has a 175 kilometer pipeline. The contract will enable us to build a 1,400 liter expansion. This will supply the water for Escondida and reduce or eliminate its consumption of groundwater. We have worked on all of the major desalination plants in Chile and we seem to be the engineer of choice.

What are Black & Veatch’s primary business drivers in Chile?

Black & Veatch’s two main sectors are power and water. The Santiago office used to be a project office, but we are now the regional office as we are planning to expand our service offerings. We are looking into coal-powered power plants and renewable energy projects. In Chile we have a number of contracts as financier engineers for high-tension power lines. Desalination is likely the first part of the mining industry that will recover as the price of copper increases. The mining industry in Chile cannot rely on using ground water anymore due to new legislation and desalination is the only solution for mines in northern Chile.

How does Black & Veatch help to reduce groundwater usage and improve energy efficiency?

Black & Veatch is big in the renewables sector, but the problem is that it is difficult to have constant power since the wind does not always blow and the sun does not always shine. There are various projects that use pumped water between two dams in order to create energy, but capex is high. More renewable projects will emerge as time goes on, but we are still at the beginning stages. In terms of water, a lot of mines have turned to using sea water. In most cases, however, sea water is incredibly corrosive. Mines I’ve encountered that use sea water are now looking into changing to desalination and fresh water. If you just use salt water, you reduce your recovery rate and your plant lasts a fraction of the time. When comparing the cost of using fresh water to the amount of increased capital that ends up being spent on a plant using salt water, it is easy to see which is more viable.

What is Black & Veatch’s competitive advantage?

When Black & Veatch started on the Escondida project, 95% of our engineering was done outside of Chile, which is not fully sustainable in the long-run. At that time, our competitive advantage was that we had been involved in over 70 major desalination plants around the world, which is more than anyone else in our field. Now with the expansion of the Escondida plant, we have decided to change that philosophy and hire a local team to engineer the expansion. 95% of the expansion engineering is based in Chile. Our major competitive advantage now is that we have a large local engineering team with a level of experience in desalination that no one else has. We can bid projects at very competitive rates and we have the experience to back it up. Black & Veatch Chile is now the second-largest water engineering office in the world outside the USA.

What is Black & Veatch looking forward to over the next several years?

During the last commodity boom, most mining companies spent too much capital on projects and acquisitions. Now, despite increased metal prices, mining companies and their shareholders are more cautious when it comes to capital spend. Desalination is the exception to this rule and it has proven to be truly fundamental to survival in the mining industry. If you don’t have water, you don’t have a mine. Black & Veatch is on the forefront of this change and we are very excited about it.