Santiago, 3 April 2012
Xstrata Copper and Origin Energy Limited (Origin) have completed a transaction under which Origin has acquired a 51% interest in Xstrata Copper’s Energía Austral hydroelectric development company in Chile. Xstrata Copper will retain a 49% stake, whilst introducing a partner with a demonstrated track record, expertise and experience in hydropower and renewable energy to support Energía Austral’s development.
Under the terms of the agreement, Origin has gained majority ownership of Energía Austral and will progressively invest over the next several years project development costs of US$75 million for the completion of a detailed project feasibility study, and, if the project is deemed feasible, an additional US$75 million towards a final investment decision. Xstrata Copper will be entitled to deferred payments by Origin Energy when the project is operational and if certain revenue threshold targets are met.
Energía Austral’s hydroelectric projects in the Aysén Region of southern Chile have been designed under Xstrata’s industry-leading sustainable development standards. They comprise up to three hydroelectric plants – Cuervo, Blanco and Condor - with capacity of approximately 1,000 MW that will deliver clean energy through a new transmission system to the nation’s Central Interconnected Grid (SIC). At full capacity, Energía Austral’s hydropower supply will avoid the generation of three million tonnes of carbon dioxide per annum compared to fossil fuel electricity generation.
Xstrata Copper Chief Executive Officer Charlie Sartain said “We are delighted to secure Australia’s leading integrated energy company as a partner in Energía Austral. Origin has impressive international energy industry credentials and a demonstrated commitment to the highest levels of sustainability.
“I am proud of the fact that our Energía Austral team has developed strong, respectful relationships with our stakeholders in the project over the past five years. I am confident that with Origin’s contribution and our continuing support, Energía Austral’s projects will now be successfully advanced to the next stage of development to provide an economic and social stimulus for the Aysén Region and a long-term, clean source of energy for Chile.”
Origin Managing Director Grant King said “Energía Austral will play an important role in providing the nation with an efficient, flexible and reliable supply of electricity from a renewable source.
“Origin’s investment in Energía Austral is consistent with our company’s pursuit of a portfolio of renewable energy opportunities in markets with attractive growth options. It also complements Origin’s existing footprint in Chile through its 40 per cent interest in the nation’s leading geothermal exploration company, Energía Andina.”
Energía Austral General Manager, Mr Alberto Quinones, said, “Origin’s investment in Energía Austral, which follows our extensive assessment of the projects’ technical, environmental and social aspects, represents a significant milestone in the development of these important electricity generation projects.”
Energía Austral’s projects are situated in an area of reliable rainfall and stable water flows, making it ideal for hydroelectric power generation. The projects are in the feasibility study stage and we anticipate a final investment decision to proceed to construction in 2015/2016.
Energía Austral has the potential to contribute substantially to the social and economic development of the Aysén Region. During construction, a workforce of approximately 4,000 people will be required, providing significant local opportunities for employment and suppliers. The projects also include initiatives to promote tourism in the region.
Neither the content of the company's website nor the content of any other website accessible from hyperlinks on the company's website is incorporated into, or forms part of, this announcement
Xstrata Copper contacts:
Telephone: +562 478 2204
Mobile: + 569 9443 3571
Telephone: +56 2 478 2235
Mobile: +56 9 9552 4557
Notes to editors
About Xstrata plc
We are a major producer of a range of vital commodities used in everything from constructing buildings and delivering electricity, to developing jet engines and mobile phones. We are one of the top five global producers of copper, thermal and metallurgical coal, ferrochrome, zinc and nickel and we also produce silver, lead, platinum, gold, cobalt and vanadium.
Founded in 2002 and headquartered in Switzerland, we operate in over 20 countries and employ over 70,000 people at more than 100 operations and projects around the world. We work in a responsible and sustainable way, with an entrepreneurial spirit and dynamic approach. For more information, visit www.xstrata.com
About Xstrata Copper
We are the fourth largest global copper producer and one of the world’s largest producers of smelter, refined and recycled copper, including from third party materials. The copper we produce is essential to our modern society, being used extensively in electronic, consumer and building products, and with its use in green-technologies, anti-microbial applications and ability to be recycled, it is playing a vital role in our sustainable future.
Headquartered in Brisbane, Australia, we have operations and projects in eight countries and employ over 20,000 people. We play an essential role in the communities in which we live and work, by providing jobs, training, infrastructure, income for suppliers and support for social development. We are present in Chile through our Lomas Bayas copper mine and Altonorte Metallurgical Complex in Antofagasta Region, our 44% interest in the Collahuasi joint venture in Tarapacá Region and our 49% holding in the Energía Austral hydroelectric project in Aysén Region. For more information, visit www.xstratacopper.com
About Energía Austral
Energía Austral is developing three hydroelectric plants and a transmission line in southern Chile’s Aysén Region. The three plants, Cuervo, Blanco and Cóndor, have the potential to provide approximately 1,000 MW of clean energy to Chile’s Central Interconnected Grid (SIC). Energía Austral has offices in Puerto Aysén, Coyhaique and Santiago. Asset Chile acted as financial adviser to Xstrata Copper in this transaction. For more information, visit www.energiaaustral.cl
About Origin Energy
Origin Energy (ASX: ORG) is the leading Australian integrated energy company focused on gas and oil exploration and production, power generation and energy retailing. A member of the S&P/ASX 20 index, the company has around 5,600 employees and is a leading producer of gas in eastern Australia. Origin is Australia’s largest energy retailer servicing 4.4 million electricity, natural gas and LPG customer accounts and has one of the country’s largest and most flexible generation portfolios with more than 5,310 MW of capacity, through either owned generation or contracted rights. Origin’s strategic positioning and portfolio of assets provide flexibility, stability and significant opportunities for growth across the energy industry. Through Australia Pacific LNG, its incorporated joint venture with ConocoPhillips and Sinopec, Origin is developing one of Australia’s largest CSG to LNG projects based on Australia’s largest 2P CSG reserves base.
In New Zealand, Origin is the major shareholder in Contact Energy, the country's leading integrated energy company, operating geothermal, thermal and hydro generation facilities and servicing electricity, gas and LPG customers across both the North and South islands. Origin also operates several oil and gas projects in New Zealand and is one of the largest holders of petroleum exploration acreage in the country.
Origin has a strong focus on ensuring the sustainability of its operations, is the largest green energy retailer in Australia and has significant investments in renewable energy technologies. For more information go to www.originenergy.com.au