Mitsubishi Corp.has partnered with AES Gener SA, the second-largest utility in Chile, to construct and operate a power plant project that will supply electricity to copper mining companies outside the northern port city of Mejillones.
This represents the first time that a Japanese firm will invest in a power generation project in South America. Mitsubishi will take a 40% stake, estimated to be worth more than 15 billion yen, in the special-purpose company that AES has set up to manage the undertaking. By teaming with AES, Mitsubishi can gain experience in operating power facilities in accordance with the regulations and laws of Chile.
The partners plan to build two coal-fired power plants at the site, equipped with storage batteries, that will generate a combined 472 MW at a cost of 110 billion yen, with over half the funds procured through project financing. Construction will begin in March 2013 with the goal of beginning commercial operations in February 2016.
Most of the plant’s output will be supplied to copper mines in northern Chile. Contracts have already been concluded with two such firms to supply 360 MW over a 20-year period. The copper-refining process consumes huge amounts of electricity. Chile is already the world’s leading copper producer, and many additional mine development plans are on the table, bolstering demand for new power plants.
