Antofagasta Plc on Jan. 20 said its Minera Los Pelambres unit agreed to transfer its 40% stake in the Alto Maipo hydroelectric project to the project's 60% owner, AES Gener SA, the Chilean arm of U.S. power group AES Corp.
In exchange, the company will receive electricity for the Los Pelambres copper-molybdenum project in Chile at lower rates as part of a 110-MW, 20-year power supply deal with Alto Maipo.
The Chilean miner started talks with Gener and lenders in October 2016 following the forecast of up to a 22% total cost overrun at Alto Maipo, which had an original budget of US$2 billion, Reuters reported.
Antofagasta CEO Iván Arriagada said the arrangement will provide Los Pelambres with access to a reliable source of electricity at competitive prices.
The transaction is still subject to final approval from the project's lenders.
Los Pelambres' carrying value of the Alto Maipo project was US$356 million.