BHP to pay $840 million to end contracts for carbon-intensive electricity in Chile
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Combustion Industry News Editor
Mining giant BHP has agreed that its two Chilean copper mines, Escondida and Spence, will pay a total of US$840 million (€709 million) to terminate an electricity supply contract early, so that it can move to sourcing electricity for the two mines from renewable power generation technologies. The supply agreements began in 2008 and were to last until 2026 for the Spence mine and until 2029 for Escondida (with the electricity being generated from the coal-fired Angamos power plant, owned by AES Gener), but will now both end in August 2021. Such an eye-watering pay-out is strong evidence of BHP’s commitment to reducing its carbon footprint, and a sign of how businesses may prioritise renewable power supply in the future, making renewable power less risky and therefore more attractive as an investment. On the other hand, it is not certain that the Angamos plant will not find another buyer for its electricity, raising the possibility that BHP’s move will ultimately not reduce emissions from the plant.