Canada's Capstone Copper has identified significant groundwater impacts across its Mantos Blancos copper mine in northern Chile that it aims to mitigate as part of a major expansion, according to company materials reviewed by Reuters.

The planned expansion for Mantos Blancos, one of Capstone's core assets, will be accompanied by environmental measures that would be in place for decades to protect groundwater, even after the mine is shuttered.

The detailed proposal, which comes two years after a separate, less-intensive expansion plan was scrapped, highlights both the complexity of operating mines in water-scarce regions and the growing expectation — both from investors and regulators — that companies proactively address environmental issues.

The company outlined the proposal in a presentation submitted to Chile's water regulator in March, according to the materials reviewed by Reuters. Capstone did not immediately respond to a request for comment.

The scarce groundwater in Chile's arid north is a focus of concern among authorities and communities, which are increasingly scrutinizing whether copper operations can balance production demands with protecting underground water systems.

Capstone has said it plans to submit an environmental impact assessment by the end of June as part of a plan to boost sulphide concentrator throughput to at least 27 000 tons of ore a day from 20 000 tons a day.

Environmental officials in previous years have linked seepage and infiltration at the mine to risks such as
infrastructure damage and standing water, ordering Capstone to tackle the issue and even rejecting a groundwater mitigation proposal from the firm in 2024 for not being rigorous enough.

Many mines operate within or cut through underground water-bearing rock, meaning the extraction of ore can affect the flow of water and its purity levels. Pumping can also affect nearby ecosystems, with damage taking years to appear and proving difficult to reverse.

To pass muster this time around with regulators, Capstone will likely need to invest heavily in groundwater control measures, the company presentation showed.

It also revealed that groundwater at the site has risen as much as 40 meters in one sector and that mining activities have altered the water quality.

In the presentation, Capstone identified the groundwater-related effects as "significant" and "compounding
and cumulative."

As part of its mine expansion plan, Capstone is proposing water-control measures that could stay in place for up to 25 years, according to the presentation. The plan would use pumping wells to lower groundwater levels in some parts of the site, and wells in another area to put cleaner water back underground to help protect water quality.