Chile-based copper mining company Antofagasta plc has agreed to build a desalination plant at its Los Pelambres mine if a planned expansion goes ahead.

The deal resolves a protest that had blocked access to the site, with demonstrators blaming the mine for water shortages. The company estimates that the protest will reduce production at the mine by approximately 8,000 tons of copper for 2015.

Following discussions that involved the local community, regional authorities and the national government, Antofagasta agreed to fund a study on a desalination plant project, and committed to using sea water for any further expansion of its mining operations.

The desalination plant would be developed under a private-public alliance or public concession scheme.

Antofagasta will also fund studies for the construction of a water dam for local use. If this project goes ahead it would also be developed under a private-public alliance.

Chief executive Diego Hernandez said this week that building a desalination plant would add $300-400 million to the company's $1.2 billion expansion plan. Hernandez expects a decision on the expansion to be made by 2018, Reuters reported.

In the meantime, Antofagasta will await the outcome of legal proceedings after a court in Chile ruled that the company must demolish a mine tailings dam at Los Pelambres.

Antofagasta is appealing the decision but said that the adverse ruling means there is "some inherent uncertainty as to the potential impact on Los Pelambres for the rest of 2015 and beyond".