International mining company Antofagasta signed a new power purchase agreement this week to bring 100% renewable energy to its Centinela copper mine in Chile.
The PPA with Engie Energía Chile is effective from 2022 until 2033, according to the mining company. Operations at Centinela produce copper concentrates that contain gold and silver, and copper cathodes. In 2018, Centinela accounted for 34% of the company’s revenue.
As part of the deal with Engie, Centinela agreed to cancel two existing PPAs that expire in 2026 and 2027, and sell its indirect 40% interest in the Hornitos thermal power station to Engie. This is expected to result in an attributable post-tax write down of approximately $43 million.
“After the write down, this new renewable energy contract will be value accretive as power costs will be significantly reduced in stages from 2020 onwards,” according to Antofagasta.
Additional details about the new PPA, including the source of renewable energy, have not been made public. However, two years ago Antofagasta committed to reducing its carbon emissions by 300,000 metric tons by 2022. Renewable energy is part of the strategy for reaching that goal.
The company reported that, in 2016, 17% of its energy supply came from renewables. In 2017 that had risen to 21% and, by 2018 it was 23%. Antofagasta’s CEO Iván Arriagada said he anticipates that all of their mining division’s power will be from renewable sources — and at a lower cost — from 2022 onward.
Although the covid-19 pandemic has created short-term volatility for C&I companies with solar and wind project deals, this new PPA shows that renewables procurement continues.
“The demand for renewable energy from corporate buyers has remained strong, thanks to their public commitments and stakeholder demand,” Jason Tundermann, vice president of business development at LevelTen Energy told Environment + Energy Leader this week. “So far, corporations have signaled that they are still interested in procuring renewable energy through new PPAs to meet their greenhouse gas emission targets.”
