Saturday, October 25, 2014
Text Size

Search our Site or Google

Welcome, Guest
Please Login or Register.    Lost Password?

Chile's power-supply crunch
(1 viewing) (1) Guest
Talk Economics
Go to bottomPage: 1
TOPIC: Chile's power-supply crunch
Chile's power-supply crunch 2 Years, 6 Months ago Karma: 263
There was an interesting report out of Bloomberg today on a looming electric power crisis in Chile. There are SEVERAL notable aspects to this development.

To begin with, Chile is one of the big "success stories" among developing nations as a commodity producer. It has had stable government (since it got rid of the U.S.-imposed Fascists). And it has been a large, reliable supplier - primarily with respect to copper, where it's the world's largest producer.

Yet even with all this "success", and with mining giants looking to develop more multi-billion dollar projects in that country we're seeing that Chile lacks the POWER CAPACITY to meet the (huge) energy needs of these projects, AND there is significant domestic political opposition to some of the PROPOSED power projects - including a HUGE coal-burning facility that the government wants to build.

Again we see the West's rape-and-pillage mentality. Forget about "balanced" development or "sustainable" development. Instead, FIND a victim willing to be exploited. Create HUGE projects to STRIP these countries of all their resources as FAST AS POSSIBLE - and who cares how much environmental devastation is left in their wake???

There is an ALTERNATIVE: the "junior mining" model. SMALL companies producing SMALL proejcts with SMALL environmental footprints. Work in COOPERATION with local governments and populations.

Meanwhile, what happens if rape-victims like Chile start to RESIST the economic "screwing" they get from the West?

Thanks to the CONSTANT manipulation/suppression of ALL commodity price, inventories are low for MOST of the world's key raw materials. Thus if any of the major rape-victims cease to COOPERATE with their Western rapists then the OBVIOUS outcome are supply crises.

And what happens when there is a supply crisis? Prices shoot up HIGHER than if there had never been any suppression in the first place.

As I continue to stress to readers: actions have CONSEQUENCES - even if sometimes those consequences take a while to show up. Evil/greed is always SHORT-SIGHTED, and thus always SELF-DESTRUCTIVE.

How do you get the HIGHEST possible commodity prices over the LONG TERM? By suppressing the price (and destroying inventories) over the SHORT TERM?

Ultimately these banksters are nothing but a pack of grossly overpaid "Wile E. Coyotes"...

"Power Shortage Hurts Chile’s $100 Billion Copper Push"

The biggest-ever pipeline of copper projects is under threat as Chile, the world’s top producer, struggles to contain rising opposition to new power plants.

At least 5,000 megawatts of capacity, including a $5 billion coal-fired plant proposed by Brazilian billionaire Eike Batista, are facing delays or have been shelved as companies including BHP Billiton Ltd. (BHP) and Anglo American Plc spend as much as $100 billion on copper and metals projects in Chile.

The country, struck by a power blackout as recently as this week, needs to boost capacity by 47 percent within 8 years to keep pace with consumption. Protesters from fishermen to university students oppose the plants, prompting miners to consider their own projects to help meet China’s copper demand.

“Chile will have to shelve many of the country’s mining investments due to the high cost and scarcity of electricity,” Joaquin Villarino, president of mining lobby group Consejo Minero, said in Santiago on April 19. Delays will jeopardize a “significant” part of the proposed mine investments, he said.

BHP Billiton, the world’s largest mining company, may solicit offers to build a power station in northern Chile, Peter Beaven, head of the Melbourne-based company’s base metals unit, said April 10. Teck is in talks with energy providers to build a power station in the Atacama Desert to supply its Quebrada Blanca mine, Santiago newspaper La Tercera reported April 21.

Chile needs to add 8,000 megawatts to its 17,000-megawatt power system by 2020, according to National Energy Commission estimates. The mining industry accounts for about a fifth of the country’s energy demands.

Transmission lines damaged by an 8.8-magnitude earthquake on Feb. 27, 2010 also need investment. The grid will be prone to blackouts for years to come, Chile’s former energy minister Rodrigo Alvarez said Feb. 17. The latest blackout struck this week as supply was cut from the capital Santiago to the southern region of Los Lagos on April 23.

Power prices on Chile’s central grid rose from about $100 a megawatt hour at the start of 2010 to more than $150 a megawatt hour at the end of 2011, according to the Energy Ministry.

“It is a challenge that the government is well aware of the need to ensure that economic growth is not constrained by a lack of power,” John MacKenzie, head of Anglo’s copper business, said in an April 10 interview in the Chilean capital.

Alvarez resigned after a conflict related to fuel subsidies in the southern region of Aysen. President Sebastian Pinera then appointed Jorge Bunster on April 3 as his fifth energy minister in two years.
Environmental Opposition

Opposition from environmentalists and community groups are slowing construction of power projects, including HidroAysen in Patagonia that would become the country’s biggest power generator, according to Villarino.

HidroAysen, which is being developed by Colbun SA (COLBUN) and Empresa Nacional de Electricidad SA, would generate 2,750 megawatts for Chile’s central grid. State-owned Codelco, the world’s largest copper producer, operates three mines in that region of the country. Last year’s approval of the project sparked protests that led to hundreds of arrests and millions of dollars in damage in public infrastructure.

HidroAysen still requires approval to build a 1,900- kilometer (1,180-mile) transmission line.

MPX Energia SA (MPXE3), controlled by Batista, faces delays to its project after fishermen won an injunction to halt its development. The plant will provide power to new mines proposed by Freeport McMoRan Copper & Gold Inc. and Teck Resources Ltd. (TCK/
GDF Suez

In 2010 Pinera asked GDF Suez SA (GSZ), Europe’s largest natural- gas network operator, to scrap plans to build a 540-megawatt coal-fired power plant on the coastal site of Barrancones after environmental opposition.

Xstrata Plc (XTA) has partnered with Australia’s Origin Energy Ltd. (ORG) to develop its Energia Austral hydroelectric project in southern Chile.

“Energy risk is significant and we need to ensure that the risks are properly mitigated,” Charlie Sartain, the head of Xstrata’s copper business, said in an April 17 interview.

Liquefied natural gas imports can be increased to Chile through the two LNG terminals already operating in the country, BHP’s Beaven said.

The government is taking a more prominent role in taking decisions to improve power supply in Chile, Codelco’s Chief Executive Officer Diego Hernandez said in an April 18 interview in Santiago. Previously, the government limited itself to regulating the sector, he said.
Economic Growth

Pinera aims to achieve average economic growth of 6 percent during his four-year term as part of a goal for Chile to become a developed nation by 2018. That plan is contingent on approving power projects, according to a Feb. 28 speech.

“If we don’t win this battle to have cheap, clean and safe energy, we won’t become a developed country,” Pinera said.

Chile will seek to “substantially” increase hydroelectric generation to solve the country’s shortages, Juan Manuel Contreras, executive secretary of the National Energy Commission said April 19. Chile has 9,000 megawatts of untapped hydroelectric power generating capacity, he said.

Chile’s gross domestic product expanded 6 percent last year and 6.1 percent in 2010, the fastest in more than a decade. Economic growth will slow this year to 4.1 percent as the euro- zone crisis reduces demand for exports, according to the median estimate of economists surveyed by Bloomberg.

The South American country can reduce consumption by 12 percent through power-saving measures, according to Deputy Energy Minister Sergio del Campo.
Renewable Energies

The country is considering a law that would set Latin America’s highest renewable energy goal and spur $10 billion of investments in clean power projects. Dozens of companies have applied to the environment regulator to build solar farms in the Atacama Desert, the driest place on earth.

The extra yield, or spread, investors demand to hold Chile’s bonds due in 2021 has fallen to 94 basis points from 116 basis points at the end of 2011. The country’s credit-default swap, a measure of the cost of insuring against default for five years, fell to 97 basis points from 132 basis points on Dec. 30. The benchmark equity index has gained 9.3 percent this year.

Mining companies are considering $100 billion of projects in Chile, home to the world’s largest copper reserves, according to data compiled by mining association Sonami. Peru, the world’s third-largest copper producer, may get $50 billion in mining investments over the next decade, according to the country’s energy and mines ministry.
Lower Quality Ore

More energy is needed as mining companies develop deposits with lower quality ore, as they need to move more earth to extract the same amount of copper.

Chile’s copper output has slumped this year due to declining ore at mines including Codelco’s flagship Chuquicamata that is a century old.

Codelco needs to spend more than $20 billion to boost output to 2.1 million metric tons by 2020 from about 1.7 million now, Hernandez said. Without those investments, Codelco’s output will slump to 800,000 tons a year in that timeframe as the company exhausts profitable ore at its mines.

China’s copper demand will probably grow more than 8 percent annually in the next five years, Andrew Harding, the head of Rio Tinto Group’s copper division, said in an April 17 interview.

Copper for three-month delivery rose 0.6 percent to $8,197.50 a metric ton on the London Metal Exchange by 10:42 a.m. local time, as all six main metals traded on the exchange gained. The metal has advanced 7.8 percent this year.
Jeff Nielson
Posts: 13369
User Offline Click here to see the profile of this user
Last Edit: 2012/04/25 08:38 By Jeff Nielson.
The administrator has disabled public write access.
Go to topPage: 1

Disclaimer: is not a registered investment advisor - Stock information is for educational purposes ONLY. Bullion Bulls Canada does not make "buy" or "sell" recommendations for any company. Rather, we seek to find and identify Canadian companies who we see as having good growth potential. It is up to individual investors to do their own "due diligence" or to consult with their financial advisor - to determine whether any particular company is a suitable investment for themselves.

Login Form