Antofagasta says deal reached with Los Pelambres copper mine protesters

SANTIAGO, March 11 (Reuters) - Copper miner Antofagasta said on Wednesday it had reached a deal with protesters who had been blocking access to its Los Pelambres mine in Chile, affecting output.

Last week, Antofagasta Minerals, a unit of Antofagasta PLC , said output at its key Los Pelambres mine had been reduced by about 5,000 tonnes, as demonstrators from the town of Salamanca in the Choapa River Valley had blocked access to the mining complex.

"Los Pelambres mine, the regional government, local politicians, the mayor of Salamanca and the community of the Choapa Valley have agreed to confront the issue of water scarcity in a collaborative manner, together," the company said in a statement.

Local communities had blamed the mine for water shortages and said they wanted a desalination plant built.

The agreement includes seeking a public-private partnership to develop a desalination plant, Antofagasta said, and a commitment to using seawater should a planned expansion of the project go ahead.

Analysts at Nomura have estimated that such a plant and linked pipeline could add significantly to the mine's expenses, around $1.5 billion to serve the expansion alone.

Antofagasta cited community representative Ismael Maldonado as saying: "There is a before and after for mining in Choapa."

Chile has a long history of struggles between mines and local communities over scarce water supplies, but such disputes have increased in intensity in recent months as an eight-year long drought in the country has worsened.

Los Pelambres, which produced around 405,000 tonnes of copper last year, was also hit this week by a court ruling that it should demolish a mine tailings dam, which protesters say is affecting water availability. (Reporting by Rosalba O'Brien, editing by G Crosse)