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.”