BHP, the world’s most prominent miner, stated Monday it had signed four renewable energy deals to supply all of its Chilean copper operations starting in 2021, paring energy prices by 20%.
Miners, which usually use fossil fuels as the power source for operations, are shifting to renewable technology as the cost of solar and wind power drops, while social and shareholder strain to address climate change increases.
Daniel Malchuk, BHP Minerals Americas president, said BHP had signed contracts to cover the power needs of Escondida, the world’s greatest copper mine, and Spence, another copper mine in Chile, the world’s central copper-producing nation.
These include 15-year agreements from August 2021 with Enel Generacion Chile for 3 terawatt-hours per year (TWh/yr) and 10-year agreements for 3 TWh with Chilean plant Colbun from 2022.
They will switch from 3 million tonnes of carbon dioxide from 2022 compared with fossil fuel-based deals, equivalent to annual emissions from 700,000 combustion-engine vehicles.
BHP didn’t give a cost for the brand new deals, however, said they had been the most intensive signed by a corporate customer in Chile. They are going to lead to a provision of around $780 million associated with the cancellation of the existing coal deals, which will be acknowledged in BHP’s December 2019 half-year results.
Chile has taken the lead in renewable power, and prices there for wind and solar power have fallen.
Another mining giant, Anglo American, said in July it could use only renewable sources to power its mines in Chile starting in 2021 following another contract signed with Enel’s Chilean facility.