BHP Group signed new power supply contracts for its Spence and Escondida copper mines in Chile, which the company expects will cut energy costs by up to 20% and displace up to 3 million tonnes of carbon dioxide emissions, it said Oct. 21.
In its results for the six months ending in December, the company will make a provision of about US$780 million due to canceling existing coal contracts for the mines, Reuters reported.
The company awarded a tender to ENEL Generación Chile to supply 3 terawatt-hours per year for 15 years starting in August 2021 and for Colbún to supply 3 terawatt-hours per year for 10 years beginning in January 2022. The two mines will fully source their power from renewable energy sources in the mid-2020s.
"These new renewable energy contracts will increase flexibility for our power portfolio and will ensure security of supply for our operations, while also reducing costs and displacing [carbon dioxide] emissions," BHP Minerals Americas President Daniel Malchuk said.
In July, BHP pledged a US$400 million investment over five years to develop technologies to cut greenhouse gas emissions from its operations and those generated from the use of its resources.
Meanwhile, a 1,000-liter-per-second water desalination plant at the Spence mine is targeted to go online in 2020, which will reduce its reliance on aquifer-drawn water for operations.