Antofagasta’s wholly owned subsidiary, Antofagasta Minerals SA, has agreed with AES Gener SA to acquire 40% of Alto Maipo SpA, a company incorporated to develop, construct, own and operate two run-of river hydroelectric power stations with a toral capacity of 531MW on the upper section of the Maipo River, Chile.
As part of this transaction, the company signed two 20-year power purchase agreements that will secure the provision of energy for the Company’s 60%-owned Los Pelambres operations for up to 160MW, with the first PPA starting in 2015. Energy for Los Pelambres has been acquired at spot prices since the previous long-term PPA expired at the end of 2012.
Alto Maipo has already obtained all the environmental permits needed for the construction and operation and all major construction contracts were signed in 2012.
A significant proportion of the total cost is expected to be debt financed with the company responsible for 40% of the equity participation in the project, which is expected to be some US$300M.