Xstrata's Chile Energy Projects To Require $1.5 Billion Transmission Line

Date : 05/17/2011 @ 9:10PM
Source : Dow Jones News
Stock : Enel Generacion Chile S.A. American Depositary Shares (Each Representing 30 Shares of ) (EOCC)
Quote : 27.93  0.16 (0.58%) @ 4:02PM

Xstrata's Chile Energy Projects To Require $1.5 Billion Transmission Line

Xstrata (LSE:XTA)
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A nearly 800 kilometer transmission line for global diversified mining company Xstrata PLC's (XTA.LN) three hydroelectric projects in southern Chile will likely cost $1.5 billion, the head of the company's local subsidiary said Tuesday.

Xstrata's local energy subsidiary, Energia Austral, has three hydroelectric projects in the pipeline for the southern Aysen region of Chile, including the 640-MW Cuervo plant, which is awaiting environmental approval; the 375-MW Blanco and 54-MW Condor projects.

Energia Austral plans to submit the environmental impact studies for Condor and Blanco in July and August respectively and for the proposed transmission line in the first quarter 2012, Alberto Quinones, the subsidiary's chief executive, told reporters.

Quinones also said that Energia Austral was negotiating with the HidroAysen hydroelectric power project--a joint venture between Empresa Nacional de Electricidad SA (EOC, ENDESA.SN) and Colbun SA (COLBUN.SN)--to build their respective transmission lines side by side for around 600 kilometers.

HidroAysen, whose five generating units totaling 2,750-MW recently received environmental approval, has faced opposition because of plans to build a nearly 2,000 kilometer transmission line through vast swaths of pristine land and because of plans to dam the Baker and Pascua rivers.

By building the transmission lines next to each other, the companies aim to use the same land rights and consolidate the time needed for obtaining those rights.

HidroAysen--which may cost upwards of $7 billion to build, including the transmission line, according to industry analysts--will be the nation's biggest power generator in terms of installed capacity.

HidroAysen still needs to submit its environmental-impact study for the transmission line.

-By Anthony Esposito, Dow Jones Newswires; 56-2-715-8929; anthony.esposito@dowjones.com

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