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Business News

BHP to pay $840 million for early end to thermoelectric contract in Chile

SANTIAGO (Reuters) - Chilean copper mines Escondida and Spence, controlled by BHP, will jointly pay $840 million for an early end to a contract signed in 2008 with a coal-fired thermoelectric plant in the north of the country.

BHP BHP.AX, like other mining companies in Chile, has been migrating its energy contracts to renewable sources to reduce its carbon footprint.

In a letter to the local securities regulator on Friday night, power company AES Gener AESGENER.SN - a unit of AES Corp AES.N - said that the end of the agreement signed with its Angamos plant was modified to August 2021.

The coal-burning contracts had been scheduled to end in 2026 at Spence and 2029 at Escondida.

“The agreements are subject to certain resolution conditions which, if any one of them is met, no later than August 31, 2020,” said AES Gener.

Escondida, the world’s largest copper mine, will have to disburse $730 million in nine installments from August 2021 and Spence $109.6 million at the end of August this year.

Reporting by Fabian Fambero, writing by Hugh Bronstein, Editing by Franklin Paul

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