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France's GDF Suez's Chilean subsidiary E-CL has decided to postpone development of its US$1.5bn Infraestructura Energética Mejillones coal-fired complex in northern Chile, E-CL CEO Lodewijk Verdeyen said in an interview with local daily El Mercurio.
Verdeyen cited miners' hesitance to make project decisions as the reason behind the delay of the 750MW project in region II, where copper price uncertainty and escalating operating costs due to lower copper grades and the need for water desalinization have delayed investment decisions.
The project received environmental approval (RCA) in March 2010 but the largest generator on Chile's northern SING grid was unable to secure offtake agreements with the miners. At the end of 2012 Verdeyen said E-CL was looking for a partner to develop the plant.
Verdeyen advocated the interconnection of Chile's two major power grids as a way for the coal project in Mejillones to secure a power purchase agreement (PPA) with miners in region III, where project development is more difficult. Investment bank Asset Chile launched an open season process for GDF Suez's US$600mn grid interconnection project to determine demand for use of the line, which is expected to end in October.
In the past few weeks several other power options for miners, aside from controversial coal generation, have made the news in Chile. Global resources giant BHP Billiton's (NYSE: BHP) US$400mn 540MW Kelar natural gas power plant received environmental approval; Chilean miner Antofagasta Minerals bought a 40% stake in the US$1.6bn 531MW Alto Maipo run-of-the-river hydro project for US$50.2mn, and signed a 20-year 160MW PPA for its Los Pelambres unit with Alto Maipo's developer AES Gener; and boric acid producer Quiborax inaugurated its 2MW El Águila photovoltaic (PV) project, which E-CL and SunEdison helped develop, and is planned to be expanded to 40MW by 2014, subject to the closing of PPAs.