Mining titan Xstrata has sold a majority interest in its Chilean hydroelectric development company to Origin Energy.
Energia Austral has three hydroelectric plants in the Aysen Region of southern Chile with a total capacity of around 1,000MW that will deliver clean energy to the nation's Central Interconnected Grid (SIC).
"Energa Austral's projects are situated in an area of reliable rainfall and stable water flows, making it ideal for hydroelectric power generation," Xstrata said.
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Xstrata will retain a 49% stake in the unit while Origin will gain a 51% interest, investing $75m in development costs over the next few years to complete a project feasibility study. If the project is deemed feasible, an additional $75m will be invested by Origin "towards a final investment decision" in 2015/16.
"We are delighted to secure Australia's leading integrated energy company as a partner in Energa Austral. Origin has impressive international energy industry credentials and a demonstrated commitment to the highest levels of sustainability," said Xstrata Copper's Chief Executive Officer Charlie Sartain.
Xstrata Copper will be entitled to deferred payments by Origin Energy when the project is operational and if certain revenue threshold targets are met, the group said without giving specific financial information.
BC
