BHP Billiton to call for bids on 150MW SING supply in Jun

Australian mining company BHP Billiton (NYSE: BHP) plans to launch an international tender in June on a contract for up to 150MW electricity supply from 2006 that could reach up to 210MW by 2008, BHP said in a statement on Tuesday. BHP needs the power to cover its electricity needs for mining operations in Chile's northern SING grid, the statement said. BHP operates the Escondida, Cerro Colorado and Minera Spence mines in the SING but Spence already has its power supply assured through a firm contract with generator Edelnor for 90MW. Natural gas shortages in the SING due to Argentine gas export restrictions could mean that the winning bidder would have to build a coal-fired plant to supply BHP's needs, newspaper Diario Financiero quoted power sector sources as saying. "The decision to invest is not so easy because in three more years natural gas will be fully available again and we will have made the mistake of investing in coal plants, only to leave them unused later on," an anonymous source at one generator said. A long-term power supply contract of 15-20 years would make investment in a coal-fired plant viable, but BHP's last contract with Edelnor was for only six years, the paper reported. Another option is that Peru could supply gas through a pipeline interconnection with Chile, currently being studied by Belgian group Suez-Tractebel, which would supply gas-fired power plants in the SING.