MercoPress. South Atlantic News Agency

Energy hungry Chile faces the challenge of new sources

Canadian miner Falconbridge is evaluating a project to build a 600 million US dollars hydroelectric power plant in southern Chile. The project, known as Energia Austral, would involve the construction of a 740 MW hydroelectric power generating plant on the Cuervo river in Chile's Aysén region.

The company said in a statement issued in Santiago that the project would be built on lands already owned by the company in the Cuervo river area, which have no use for cattle breeding or tourism but have "great hydroelectric potential".

Falconbridge, which merged with Noranda in mid-2005, is one of the world's leading producers of copper, nickel and zinc. The mining industry is Chile's top energy consumer.

Noranda had originally planned to build three hydroelectric power plants in the Aysén area to supply its Alumysa aluminum plant project. The plan was scuttled when the government, under pressure from salmon farmers and environmental groups, decided not to allow the aluminum plant to be built there.

Chile is in dire need of additional energy supplies. Last month, Foreign Affairs Minister Alejandro Foxley acknowledged that meeting the nation's 2006 energy needs would be difficult.

"We must accelerate the diversification of the Chilean power matrix," he said.

Over the last decade, Chile has become increasingly dependent on foreign energy suppliers. Twenty-five years ago, the country imported 30% of the energy it consumed, but today this figure is 60% and in 2009 it will reach 70%.

However, energy company Endesa España is already contemplating the construction of four dams on the Baker and Pascua Rivers, in the southern Aysén area of Region IX.

The projects have upset many local residents involved in the salmon farming, tourism and livestock industries. Environmentalists have been fighting the energy project since it was first presented to the government October last year and claim the government favors transnational development over more environmentally friendly projects.

Goeff Burt - The Santiago Times - News about Chile