Wind Energy for Chile’s Mines. BHP Billiton and Pacific Hydro to develop 100 megawatt windfarm in Northern Chile – BHP has first option to buy.

SANTIAGO, Nov 19 (Reuters) - Mine giant BHP Billiton and Pacific Hydro said on Monday they signed an agreement to develop wind power in excess of 100 megawatts in Chile's northern mining region.

BHP Billiton (BHP.AX: Quote, Profile, Research) and Pacific Hydro (PHY.AX: Quote, Profile, Research) said in a joint statement construction would begin in late 2009 and would feed into the northern power grid (SING), which mainly serves Chile's mining industry.

Pacific Hydro will do the studies, engineering, construction and operation of the resulting Aeolic (wind) projects, while the miner will have the first option to buy the energy.

"Energy is one of our big operational challenges and to confront it we have developed a plan that assures supplies of energy from conventional sources, and is complemented by sources, such as Aeolic energy," said Diego Hernandez, president of BHP Billiton's base metals division.

Chile's northern mining region has been hit by energy shortages after cuts in supplies of Argentine natural gas forced generators to use costlier fuels like diesel.

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