Codelco boosts decarbonization plans with new AES Andes agreement

Chile’s state copper miner Codelco entered into an electric power supply agreement with generator AES Andes on Monday for its Ministro Hales and Radomiro Tomic divisions in Antofagasta region, replacing coal with renewable energy.  

As a result, the world’s largest copper producer takes another step towards its goal of operating with a 70% decarbonized energy matrix by 2026, Codelco said in a statement.

Under the agreement, AES Andes’ will supply 1.6TWh/y between 2026 and 2040. The agreement is in addition to other contracts of a similar nature that Codelco has for Chuquicamata, which since 2018 has received renewable energy from Engie, and the one with Colbún for its Salvador, Andina and El Teniente units.

"Getting closer to an energy supply that comes from 100% renewable sources is one of the main commitments to 2030," Codelco chairman Máximo Pacheco said.

The company has been facing operational issues such as lower grades, especially at Ministro Hales, Chuquicamata and El Teniente, and lower recoveries along with higher prices of inputs.

At the end of last year, CEO André Sougarret asked the corporate VPs and general managers of its divisions to present measures this month to ensure the company's goals for production and investment in 2023-27.

The focus was placed on cutting expenses, reaching the technical limits of infrastructure, achieving operational continuity with timely maintenance, reducing the variability of processes and lowering costs, among others, according to a December release.

In 2022, Codelco’s estimated copper production was in the range of 1.46-1.43Mt, compared to 1.6Mt the previous year.