MAC: Mines and Communities

Xstrata inks deal with Transelec for power line - Transelec verá línea transmisión a Xstrata en Chile

Published by MAC on 2008-07-14


Benjamin Witte

9th July 2008

Mining Company's Patagonia Dam Project Continues To Draw Criticism

Xstrata Copper - via a local affiliate called Energia Austral - has reached an agreement with Canadian-owned Transelec Chile SA to develop a transmission line that would stretch from Chile's far southern Region XI to the central part of the country. Xstrata Copper is a branch of Swiss-based mining conglomerate Xstrata. Xtsrata and Transelec announced the deal Wednesday. If it is eventually approved by Chile's National Environmental Commission (CONAMA), the line would transport electricity from three dams Xstrata plans to build in Region XI, an area of Chilean Patagonia also known as Aysen.

"We picked Transelec for its vast experience in the study, design, construction and operation of electric transmission systems, as well as for its deep knowledge of the Chilean market," said Energia Austral General Manager Alberto Quiñones.

Energia Austral, a newcomer in Chile's electricity market, plans to build hydroelectric dams along Aysen's Cuervo and Blanco Rivers and in Lago Condor. The largest of the dams, planned for the Cuervo, would have an installed capacity of some 600 MW, making it one of the largest such facilities in the country. The Blanco River dam would add 360 MW. In total, the roughly 1,100-MW project is expected to cost just over US$1 billion. The price tag does not include the cost of the planned transmission line.

"It gives us great satisfaction to move forward with this project, which will allow us to bring into the generating market a new player, one that boasts the backing, the strength and the good practices that characterize Xstrata worldwide," said Transelec General Manager Andres Kuhlmann.

At this point Transelec is not offering any concrete information about the planned transmission line other than to say it will study its options over the next three years. From there the company expects to build the line over the course of 40 months, meaning it could be ready to begin supplying energy to Chile's Central Power Grid (SIC) by 2014.

"(Transelec) has simply signed an agreement to design a transmission solution for Energia Austral," Transelec press officer Claudio Vera told the Patagonia Times.

One of the big - and as of yet unanswered - questions surrounding the agreement is how the proposed transmission line will mesh, if at all, with Transelec's plan to build a power line for HidroAysen, which like Xtsrata is looking to build several large-scale hydroelectric dams in Region XI.

HidroAysen, a joint entity created by Italian-Spanish electricity giant Endesa and Colbun, a Chilean company, is hoping to build two dams on Aysen's Baker River and three on the Pascua River. Together the five dams are expected to have an installed capacity of some 2,750 MW. Endesa and Colbun have a deal with Transelec to build a 1,200-mile transmission line connecting the HidroAysen dams to the SIC. If approved by CONAMA, the estimated US$1.5 billion power line would be the world's longest.

The question surrounding Transelec's newest deal, then, is whether the company would have to build a separate, possibly parallel line to accommodate Xstrata's 1,100 MW, whether both lines could be strung along the same towers, or whether it will manage to transport all 3,850 MW with just one line.

All three companies - HidroAysen, Xstrata and Transelec - have received heavy criticism from social and environmental groups worried that the various electricity projects will damage the largely untouched Aysen region, known for its natural beauty. The dams, argue groups like Puerto Aysen's Association of Artisan Fishing Organizations (AGOPA), will ruin the various river valleys involved. The transmission line, furthermore, will involve massive clear-cutting and threatens to open up Patagonia to further industrial encroachment.

"They say this project is for the benefit of Chile, but we think it's only good business for the companies. It's bad business for Chilean Patagonia," said AGOPA member Julio Cantin. "It only benefits the pockets of certain businessmen. The electricity, furthermore, isn't even for Aysen. It's for the mines in the north."

"I'm a native of Patagonia," Cantin added. "I'm the offspring of pioneers to this region. And my parents and grandparents didn't make all those sacrifices just so we could give Chilean Patagonia away and help a bunch of foreign companies line their pockets."

Xstrata acquired the rights to the Cuervo and Blanco Rivers in 2006 when it bought out Falconbridge, which obtained the rights through a merger with Canadian-owned Noranda. During the 1990s, Norande planned to use the rights to power a controversial aluminum smelting plant (the Alumysa project) it was hoping to construct in the area.

Transelec is Chile's top electricity transport company and already boasts some 8,000 kilometers of transmission lines spread out between Arica (Region XV) and Chiloe (Region X). The company is controlled by Canada's Brookfield Asset Management. Other partners include a pair of public-sector Canadian pension funds: the CPP Investment Board and British Colombia Investment Management Corp (BCIMC).

CPP and BCIMC's investment in Transelec is opposed by the Council of Canadians, the country's largest citizens' organization. The Council of Canadians insists government retirement funds should not invest in companies that carry out environmentally questionable projects.

Transelec verá línea transmisión a Xstrata en Chile

Reuters 9 de julio, 2008

SANTIAGO - Transelec, la mayor firma de transmisión eléctrica de Chile, desarrollará la línea que transportará la energía que produzcan las tres plantas hídricas que espera construir Energía Austral, filial de Xstrata, en el extremo sur chileno.

Energía Austral informó el miércoles en un comunicado que su gerente general, Alberto Quiñones, y el de Transelec, Andrés Kuhlmann, suscribieron un acuerdo con el que se dará inicio a los estudios del sistema de transmisión, que inicialmente establecerá alternativas de trazado, de diseño e ingeniería básica. "Por medio de un acuerdo firmado hoy, Energía Austral le encomendó a Transelec el diseño de la solución de transmisión para inyectar al Sistema Interconectado Central (SIC) la energía que la primera estudia generar en la región de Aysén," dijo la filial de Xstrata .

"Se trata de un bloque de energía cercano a los 1.100 megavatios, correspondiente a la capacidad instalada que aportarían las centrales Río Cuervo, Río Blanco y Lago Cóndor, ubicadas en la comuna de Aysén," agregó.

Transelec está a cargo, además, del desarrollo de una línea de transmisión para un proyectado megacomplejo hidroeléctrico que las generadoras Endesa Chile y Colbún están implementando en la misma región de Aysén, una zona boscosa de intensas lluvias. Energía Austral había dicho que está evaluando invertir unos 900 millones de dólares sólo en la construcción de la línea de transmisión para sus centrales Río Cuervo, de unos 600 megavatios; Río Blanco, de 360 megavatios; y Lago Cóndor, de 54 megavatios.

"Se estima que la primera etapa del proyecto, consistente en el desarrollo de estudios y la gestión de permisos, debiese concluir en el primer trimestre de 2011, para continuar con un proceso de construcción de alrededor de 40 meses," dijo la firma.

La inversión total en las tres centrales, que la empresa espera estén listas en el 2014, supera los 1.000 millones de dólares.

Energía Austral aún no ha descartado utilizar la línea que la sociedad HidroAysén, de Colbún y Endesa Chile, mandará a construir para transportar la electricidad de su megaproyecto, que contempla la construcción de hasta cinco centrales.

(Reporte de Mónica Vargas, Editada por Patricia Vélez)

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