April 2 (Renewables Now) - Chilean conglomerate Antofagasta Plc's (LON:ANTO) Centinela mining unit has signed a power purchase agreement (PPA) with Engie Energia Chile SA to procure 100% renewable energy for its operations.
Under the terms of the agreement, the Chilean unit of Engie SA (EPA:ENGI) will supply power to Centinela from 2022 until 2033, the latter's parent company announced on Wednesday.
According to the terms of the contract, Centinela will cancel two existing PPAs which expire in 2026 and 2027. Antofagasta will also sell its 40% indirect interest in the Hornitos thermal power station to Engie, thus resulting in a USD-43-million (EUR 39.3m) post-tax write down.
Antofagasta stated that after the write down, it expects power costs to be gradually reduced by a significant amount, starting from 2020. The company also has a target of lowering its carbon dioxide (CO2) emissions by 300,000 tonnes by 2022.
"With the completion of this agreement, from 2022 all our mining division's power will be from renewable sources and at a lower cost as well.", Antofagasta's CEO Ivan Arriagada noted.
(USD 1 = EUR 0.915)