BHP, the biggest mining company in the world, will use only renewable energy for its copper mines in Chile starting in the mid-2020s.
The company entered separate renewable energy contracts for its giant Escondida and Spence mines. It signed 15-year contracts for 3Terawatt hours per year (TWh/year) with ENEL Generación Chile and 10-year contracts for 3TWh/year with Colbún, according to CNBC.
The mining major also canceled its outstanding coal contracts at the cost of US$780 million.
BHP said it gains many advantages from the shift to 100% renewable energy. These included displacing CO2 emissions, flexibility in its power portfolio, energy security, and a reduction in costs.
“From a commercial perspective, these contracts will deliver an estimated 20 percent reduction in energy prices at Escondida and Spence operations,” BHP said in a statement.
Interestingly, BHP said the new contracts would be “value accretive” even after considering the provision of US$780 million for canceling existing coal contracts.
The new energy arrangement will displace 3 million tonnes of CO2 per year from 2022 compared to the existing fossil fuels. Last week, more than one in five of BHP shareholders supported exiting groups ‘inconsistent’ with Paris climate goals.
“This is an important step in our transition to sustainable energy use over the medium term in Chile,” said Daniel Malchuk, President of BHP Minerals Americas.
Read the CNBC article HERE.
Image Source: Pixabay