Mining Booms and Water Scarcity: Groundwater Depletion and Re-allocation in Chile

This paper studies how commodity price shocks affect groundwater resources in mining regions with a focus on Chile, a major copper producer and a country where groundwater extraction rights can be traded across users. Using monthly groundwater levels from wells combined with the locations of copper mines and global copper prices between 1983 and 2021, the author examines whether mining booms lead to groundwater depletion. Exploiting global copper price fluctuations as an exogenous driver of mining activity, the paper shows that wells located near mines experience significantly lower water availability when copper prices rise.

About the speaker

Ayse Nihal Yilmaz is a research assistant and PhD student in international economics, whose interest is on the intersection between international trade and clean energy transition. After having completed her M.A. in international economics (IHEID, 2020), she worked as an economist at the World Trade Organization Economic Research and Statistics Division, as a modeller for trade and climate change. Her work also focused on decarbonisation pathways, as well as trade and developmental impacts of clean energy transition. Her PhD research focuses on critical minerals and clean energy transition, from both trade and innovation economics perspective, exploring the crucial role of extraction, distribution, and innovation in critical minerals to enable a sustainable and equitable transition towards clean energy.