Scarcity of water is emerging as a defining constraint of the 21st century. As one of the most notoriously water-intensive activities, the mining and metals industry sits at the heart of this challenge.
In the United States alone, mineral extraction consumes an estimated 4 billion gallons of water a day, equivalent to the daily use of 13 million households.1 Downstream processing and refining operations add further to this demand, significantly increasing the sector’s total water footprint.2 This immense demand for water has fuelled a growing market for water management in the mining industry, currently valued at US$8 billion globally and is anticipated to rise to US$12.5 billion by 2033.3 However, whilst this growth presents substantial opportunities for the sector, slow adaptation to escalating demand has resulted in poor water management and severe financial consequences; in 2018 for instance, the sector reported over US$20 billion in water-related financial impacts alone.4
Looking ahead, the challenge is set to intensify. Global mining investment is projected to rise by an additional US$150 billion annually between 2025 and 2029, placing even greater pressure on the sector to maintain high production levels.5 Mining and metals companies, which are increasingly reliant on water-based processes to maximise output, must also compete with agricultural, industrial and domestic users for scarce water resources – a vulnerability investors have identified as the greatest risk facing the industry (Fitch Ratings). As a result, effective water management is no longer a secondary concern, but a critical priority for sustainable long-term growth. This article explores how the industry is responding to its water-related challenges where a healthy relationship between water and mining is increasingly important.
Optimisation of water
The mining and metals industry is undergoing a fundamental shift in its view of water from first principles. The paradigm of treating water as a mere operational necessity has become archaic amongst the issues of scarcity, competition and investor scrutiny. Instead, companies have transitioned to valuing water efficiency as an advantage and are optimising usage in their operations. Closed-loop systems, such as recycling and reuse programs, aim to re-circulate processed water; high efficiency filters recover water from slurry; and dry processing techniques are increasingly adopted to separate ores without the use of water.
Many mining operations have adopted water efficiency targets across their sites. For example, at the Oyu Tolgoi (Mongolia) operation, Rio Tinto implemented and successfully achieved an average annual water use efficiency below 550L of water per tonne of ore over the last five-year period. Alongside clear sustainability targets – ranging from reducing scarce freshwater withdrawals to improving recycling rates – a broader change in ethos is evident with water now recognised as a strategic consideration that must be managed responsibly. These efficiency measures are equally critical in downstream processing and refining, where water demands and operational risks can be even more acute.
Processing and refining across the metals value chain are similarly water-intensive and materially shape a project’s overall water footprint. Downstream producers are increasingly adopting closed-loop water systems and advanced management practices to optimise water usage, including recycling, alternative sourcing such as seawater, and real-time digital monitoring.6 Regions facing acute water stress are integrating seawater and desalinated supplies directly into concentrators and leaching circuits to reduce freshwater abstraction, while accommodating the energy and brine-discharge implications in permitting and design. Globally recognised frameworks are shaping these decisions: ICMM’s water stewardship commitments, the Global Industry Standard on Tailings Management’s emphasis on integrated water balance and safe storage, and buyer-driven schemes such as the Copper Mark and ResponsibleSteel, which reference the Alliance for Water Stewardship Standard and require transparent, site-level performance. Together, these drivers are making water-efficient processing a prerequisite for access to capital, markets and a durable social licence across the sector.
Harnessing the benefits of new technologies
Rapid development of technology has become the most powerful tool for addressing mining and metal’s water challenges, with water treatment and recovery technology at the forefront. In downstream processing, techniques such as metal-specific ion exchange, solvent extraction, and membrane filtration are increasingly being deployed to reclaim water from processing streams and reduce contamination risks. In extraction and beneficiation, dry processing and high-efficiency filtration are being adopted to minimise water use at earlier stages.7 Advancements in desalination technology are also playing a critical role, where new approaches – such as thermodiffusion methods, which use moderate heat to separate salt without electricity – have improved efficiency and reduced costs of infrastructure. Dry and low-water processing methods are also expanding: Vale, for example, has invested heavily in dry processing techniques at its Brazilian iron ore mines. 90% of their Northern System operations now use dry processing technology, and they aim to fully eliminate water use for iron ore processing at their Carajás mining complex by 2027.
Not only are new technologies improving existing processes, but entirely new areas are emerging through the integration of data and artificial intelligence. Digital tools are redefining how water is tracked, analysed, and managed across mining operations. For example, the use of Internet of Things (IoT) sensors and data analytics for smart water management allows continuous monitoring of water quality and flow, automated detection of contaminants, and predictions of when treatment system maintenance is required to prevent leaks. By integrating these data streams onto central dashboards, operators can maintain a better process control to holistically optimise water usage. As such, water technology companies can anticipate increased expenditures on solutions from the mining and minerals sector in the coming years.
New infrastructure and collaboration
Mining companies are also investing heavily in new water supply infrastructure, with the most significant shift being the transition from freshwater to desalinated water for operations. Historically, mines tended to own and operate their own desalination plants. Today however, this model is being replaced by multipurpose and co-development projects – often in partnership with governments and local communities – which can reduce costs by approximately 40% while shifting operational risk to third parties. This collaborative approach not only improves efficiency and cost viability but also creates shared benefits across industries and communities alike.
Chile has been at the forefront of this trend. Multipurpose desalination plants in regions such as Antofagasta are now designed to supply not only copper producers but also agricultural and domestic users, distributing costs more evenly and easing long-standing tensions over water allocation. This integrated approach allows for more resilient regional water management and aligns industrial demand with broader community needs.
While the extent to which local farmers benefit remains a point of contention, the move towards collaborative desalination models highlights a growing recognition that securing reliable water supply is inseparable from social responsibility. By aligning mining needs with the surrounding communities, multipurpose projects allow companies to optimise usage and allow for broader stakeholders to also share in the social benefits. This momentum is likely to grow further as we see more landmark deals, such as the US$1.5 billion agreement between Almar Water Solutions and Antofagasta Minerals to build and operate a new desalination plant and water supply system in northern Chile.8
Regulation, governance and transparency
Underpinning private-sector efforts is the strengthening of governance frameworks which dictate how mining and metals companies manage water. With environmental and social consciousness, alongside net zero commitments at the forefront of the industry, regulators in many jurisdictions – particularly those facing high water stress – are tightening licensing and allocation regimes for both extraction and processing operations. For example, water discharge and recycling standards now apply to smelters and refineries, requiring comprehensive water management plans across the full project lifecycle. This creates not only stricter compliance obligations but also heightens operational risks for mining and metals companies.
Increased focus on international standards is shaping these expectations. The International Council on Mining and Metals, whose members include 25 of the world’s largest mining and metals companies, has committed to achieving significant freshwater stewardship goals by 2030. In parallel, investors are increasingly requiring disclosure under frameworks such as the Sustainability Accounting Standards Board Standards, and public transparency has accelerated as a result. Rio Tinto, for example, launched a global disclosure platform in 2023 that published detailed, site-level data on water use across 35 countries – a first for the mining industry.9 The Organisation for Economic Co-operation and Development’s Handbook on Environmental Due Diligence in Mineral Supply Chains also encourages companies to work with established suppliers to improve transparency regarding the origins of minerals.10 This transparency helps stakeholders assess and manage the environmental impacts of their mining, and processing activities, including the use and conservation of water resources. Together, these initiatives reflect a coordinated global effort to enhance broad accountability for water use in the mining and metals sector.
Outlook
For the mining and metals industry, managing water is no longer optional but essential. Progress is evident, from optimisation and new technologies to infrastructure partnerships and stronger governance, but the scale of the challenge continues to grow alongside rising demand. Future success will not only depend on how effectively mining and metals companies integrate water stewardship into every stage of the supply chain, but also their ability to collaborate with communities and regulators to maintain their social licence to operate. Addressing these considerations successfully will ultimately build a more resilient and sustainable mining and metals industry.
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