Xstrata & Transelec Negotiate Cuervo River Dam Project

Xstrata, a Swiss mining company planning to build a hydroelectric dam in Chile’s far southern Region XI, has entered into negotiations with Canadian-owned electricity transport company Transelec, the Chilean business daily Estrategia reported this week.

The Swiss company, a substantial player in Chile’s mining industry, hopes to build a 600-MW dam on Region XI’s Cuervo River. The project has not yet been approved by Chile’s National Environmental Commission (CONAMA), which rejected an Environmental Impact Study Xstrata submitted earlier this year (ST, March 22).

Xstrata is by no means the only multinational interested in the energy potential of Patagonia’s powerful, glacier-fed rivers. Spanish electricity giant Endesa, working in collaboration with Chilean energy company Colbún, also has big plans for the area. With their so-called Aysén Project, the Endesa and Colbún plan to build five dams that would together generate some 2,750 MW.

The question for all three companies is how to transport that energy from Region XI (Aysén) to energy hungry central and northern Chile. For Endesa and Colbún, the answer is a US$1.5 billion, 2,000-km. transmission line, to be built by Transelec. Up to now, however, it’s been reported that the carrying capacity of such a power line would be limited to roughly the amount of electricity Endesa and Colbún plan to generate. The transmission line, in other words, would not be able to accommodate Xstrata or any other company with plans to dam Patagonia’s rivers.

An article published Tuesday in Estrategia, however, suggests otherwise. Reporting that Xstrata and Transelec have begun preliminary negotiations, the article went on to suggest that by employing a so-called quadripolar system, the Canadian company could theoretically accommodate Xstrata’s 600-MW contribution. If that is indeed the case, Xstrata could avoid having to build a second, parallel transmission line.

Here is the full article.