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Transaction/Case Details

Xstrata Copper completes sale of majority stake in Chile Hydro Project to Origin Energy

DATE CLOSED

April 3, 2012

BUSINESS SECTOR

Power

LEAD OFFICE

Toronto

VALUE

150 Million USD


OVERVIEW

On April 3, 2012, Xstrata PLC announced that its copper subsidiary (Xstrata Copper) has sold a 51% stake in a hydroelectric-development company in Chile to Origin Energy Ltd. for an undisclosed sum.

Xstrata will keep a 49% stake in the company, Energia Austral, which is working to develop three hydroelectric plants and a transmission system to inject power into Chile's Central Interconnected Grid. When in full operation, Energia Austral will have a total generating capacity of just over 1,000 MW.

In November, Energia Austral signed an agreement to develop a transmission project along with HidroAysen, a joint venture between Chilean power generators Empresa Nacional de Electricidad SA and Colbun SA.

Origin will progressively invest US$75 million over the next several years in Energia Austral's project-development costs for the completion of a detailed project feasibility study, and, if the project is deemed feasible, an additional US$75 million towards a final investment decision.

Xstrata will be entitled to deferred payments by Origin Energy when the project is operational and if certain revenue threshold targets are met.

Xstrata PLC, headquartered in Sug, Switzerland, was a multinational mining company. On May 2, 2013, Xstrata was fully acquired by Glencore, an Anglo–Swiss multinational commodity trading and mining company headquartered in Baar, Switzerland.

Origin, headquartered in Sydney, Australia, is an integrated energy company, focused on gas and oil exploration and production, electricity and renewable power generation and energy retailing.

McCarthy Tétrault LLP represented Xstrata, the seller, with a team led by Seán O'Neill.

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