BHP Signs Renewables Deal in Chile; to Record $780 Million Provision on Coal Contracts

   By Rhiannon Hoyle 
 

SYDNEY--BHP Group Ltd. (BHP.AU) said it has signed four new renewable-power agreements to meet energy demand for its Chilean copper operations and will record a roughly US$780-million provision linked to the cancellation of existing coal contracts.

BHP said the new renewable energy contracts for its Escondida and Spence mines in Chile will be value accretive even including the provision, which will be recognized in its financial results for the first half of fiscal 2020.

"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 CO2 emissions," Daniel Malchuk, president of BHP Minerals Americas, said in a statement. The four contracts are estimated to reduce energy prices for the two operations by roughly 20%, he said.

The separate contracts agreed by Escondida and Spence include 10- and 15-year terms with ENEL Generación Chile and Colbun, and are due to start early next decade, BHP said.

Write to Rhiannon Hoyle at [e-mail]

(END) Dow Jones Newswires

October 20, 2019 19:26 ET (23:26 GMT)

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