Chile: 9 companies bidding for 20 geothermal concessions

Alexander Richter 29 Aug 2009

The bidders of the geothermal tender for 20 concessions in Chile were announced this week. The final results are then expected to be released in November. The total investment in the new areas should reach US$ 120 million.

In a release by Chile’s Ministry of Mining, the bidders of the geothermal tender for 20 concessions were announced. The final results are then expected to be released in November. The total investment in the new areas should reach US$ 120 million, so BN Americas.

According to the release, “a total of 59 bids were received by the Ministry of Mines for 20 exploration concessions, under the fifth geothermal bidding process. This time there were 9 participating companies. This contest is a government effort to position Chile as a destination for international geothermal investment.

Secured by a legal framework that ensures clear and established rights and obligations for licensees, the 20 new areas for geothermal exploration offer a clear investment opportunity for companies wishing to take up this challenge, so the Ministry.

This time were 9 companies who participated in the call for tender for these exploration areas, including 5 subsidiaries of foreign companies with significant experience in the development of geothermal projects worldwide.

According to Law No. 19,657 and its regulations, the Ministry of Mines conducts the entire procedure of exploration concessions and geothermal exploitation, which in turn involves the development and solicitation of these areas.

The areas that were part of the tendering process: Tacora Volcano, Licancura 1, 2 & 3; Aucan I & II, St. Paul II, Brownies, Tuyajto 1, 2, 3 & 4; Juncalito 1 & 2, Laguna Verde, Colimapu , Calerias, Necul, Calabozo Y Sollipulli. The tender was finalized with the opening of the companies’ proposals on August 24th, 2009.

The strong growth in energy demand and the opportunity to use clean energy sources, indicate that power generation based on geothermal energy will play a significant role in the growth of electricity generation capacity in the medium and long term in Chile.

Today, the Government of Chile has the challenge of promoting the exploration of geothermal energy in the country, attracting businesses to invest in this sector and create conditions for the comprehensive exploitation of resources, capturing all the uses and potentials this energy source can deliver to the nation.

With this process the Ministry of Mines can ensure that ‘the alternative of geothermal generation in Chile’ is a process of development through free agents other than national and international markets, especially when the exploitation of geothermal permits not only produce electricity but also steam, hot water and heating.

Participating companies

Magma Energy Chile Ltda.: Chilean subsidiary of Canadian company Magma Energy Corp. geothermal energy, with a total financing of approximately U.S. $ 23,000,000 .-, has focused his efforts on the exploration, development and operation of geothermal projects worldwide. The company currently owns a geothermal plant in operation and a large portfolio of geothermal exploration prospects and development projects in Argentina, Chile, Nicaragua, Peru and western USA, and is expanding its portfolio of projects worldwide.

Polaris Energy Chile Ltda.: Chilean subsidiary of Polaris Geothermal Inc. Company listed on the Toronto stock exchange. The company develops geothermal energy projects in Latin America. Polaris is the owner of the San Jacinto geothermal concession in Nicaragua. The San Jacinto – Tizate project involves an investment of about US$ 270 million.

Ormat Andina SA: The Chilean Representative of Ormat Technologies, Inc. listed on the New York Stock Exchange. (NYSE: “ORA”), The company is dedicated to vertically integrate the entire process involving geothermal energy from the exploration fields to the installation of electric power plants from geothermal resource . The company has operations in various countries including New Zealand, Turkey, USA, Nicaragua, El Salvador, China, Japan and the Philippines.

Colbun SA: Colbún is a power generation company based in the Chilean capital. It has an installed capacity of 1274 MW of hydroelectricity and 1,236 MW of thermal sources (Total: 2,514 MW). The company is the second largest company in the market with 28% market share, supplying to the central grid. It has 20 power plants, distributed in central and southern Chile. Colbún delivers to customers, to electricity distributors, as well as large mining and industrial companies.

Energía Andina SA: A consortium by the state oil company ENAP (40%) and the mining company Grupo Luksic, Antofagasta Minerals SA (60%) founded to explore and develope geothermal energy projects. Currently Andina SA Energy is exploring the geothermal potential of the area Tinguiririca, Region VI.

Origin Energy Chile SA: Chilean subsidiary of Origin Energy of Australia, a leading integrated power company from exploration to power generation. With over 140 years of history in Australia, the company currently has 4,000 employees in Australia, New Zealand and the Pacific Islands, with more than 3 million customers and over 105,000 shareholders. Origin is one of the top 50 companies on the Australian Stock Exchange and operates in exploration, power generation and distribution.

Empresa Nacional de Geotermia SA: On April 6, 2005 ENAP signed an agreement with the Italian company Ente Nazionale per l’Energia Elettrica (ENEL) for the development of exploration projects and production of geothermal resources in Chile. The operation was carried out by signing a contract for purchase of shares with ENEL buying 51% of National Geothermal Energy Company (ENG), a company in which ENAP has the remaining 49%.

Serviland Minergy SA: Division of mining and energy projects company ECM Ingeniería SA. It is a Chilean-owned company with investments in coal mining projects and iron. Together with a Chilean crew and abroad it is for the first time active in geothermal.

HotRock Chile SA: The Chilean subsidiary of HotRock Limited, an Australian listed company, with the largest surface geothermal exploration in that country. It is one of the leading companies globally in clean energy through the acquisition, development and operation of geothermal projects.

According to Business News Americas, the exploration of those concessions could lead to new power projects worth US$ 1 billion. US$ 15 million have already been spent on exploration activities since Chile passed its first geothermal legislation and in the next 2 years US$ 45 million will go to new exploration in the country.

The final results are expected to be announced in November this year.

Source: Chile’s Ministry of Mining (in Spanish), BN Americas