BHP announced that the company is preparing a provision of roughly $780 million for the cancellation of existing coal contracts. Daniel Malchuk, President of BHP Minerals commented “new renewable energy” contracts would increase flexibility for the firm’s power portfolio and “ensure the security of supply for our operations, while also reducing costs and displacing CO2 emissions.”
Adding “deliver an estimated 20 per cent reduction in energy prices” at the Escondida and Spence sites.
It’s good for the environment, it’s good for emissions, but it’s also great business, Malchuck told reporters in London.
Enel Generacion Chile now has a 15-year contract for 3 terawatt-hours (TWh) per year that is set to start on August 2021. Alongside this, 10-year contracts for 3 TWh, have been agreed with Colbun set to start in January 2022.
The deals have been made in an effort to improve environmental impact. From 2022 the deals are set to displace 3 million tonnes of carbon dioxide each year in comparison to the use of current fossil fuel contracts. BHP is one among many energy companies that are beginning to mine renewable energy.
BHP has not confirmed the price of the new contracts but has commented it is the most extensive signed by a corporate customer in Chile.
The announcement comes at a time where many companies and countries are becoming conscious of the use and benefits of green energy. Recently Google invested $2bn in Global Renewable Energy and in the UK the use of renewable energy overtook the use of fossil fuels for the first time.