Acquisition of 40% Interest In Alto Maipo Project

 

 

 

 

For immediate release

 

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ACQUISITION OF 40% INTEREST IN THE ALTO MAIPO HYDROELECTRIC PROJECT

 

London, 2 July 2013

 

Antofagasta plc announces that its wholly owned subsidiary, Antofagasta Minerals SA (the "Company" or "Antofagasta Minerals"), has today entered into a binding agreement with AES Gener SA ("AES") to acquire 40% of Alto Maipo SpA ("Alto Maipo"), a company incorporated to develop, construct, own and operate two run-of river hydroelectric power stations located in the upper section of the Maipo River, approximately 50 kilometers to the southeast of Santiago, with a total installed capacity of 531MW (the "Project").

 

As part of this transaction, the Company signed two 20-year power purchase agreements ("PPAs") 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 of the Project 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$300 million.  

 

Diego Hernández, CEO of Antofagasta Minerals SA, commented:

 

"This Project is an important part of our strategy to guarantee the provision of energy for Los Pelambres and we are delighted with this transaction as it allows us to secure a long-term competitive energy price for our largest mining operation in Chile from a sustainable source of energy generation.

 

"We are also very pleased to create this alliance with AES, a global leader in electricity generation with considerable experience in Chile where it operates several run of river power plants in the Maipo River area, including one since 1923."

 

Enquiries
London Investor relations - Antofagasta plc Tel: +44 20 7808 0988 Andrew Lindsay - [email protected]      Media enquiries - Bankside Consultants Tel: +44 20 7367 8871 Simon Rothschild - [email protected]	Santiago Antofagasta Minerals SA Tel: +562 2798 7000 Alejandro Rivera - [email protected]