Enel Generación Chile, the local unit of the Italian utilitygiant, signed a 10-year renewable power supply agreement with the local unit of mining conglomerate Anglo American, the biggest corporate deal of its kind in Chile.

The transaction calls for Enel to supply 3 terawatt (TW)hours /yr of renewable electric power - about 4% of total annual electric power demand in Chile, where mining is a key pillar of the economy. Enel has 4.5GW of installed renewables capacity including 600MW wind and 500MW solar.

Anglo American says the deal will allow its Chilean operations to reach 100% renewable power supply, which will cut its emissions by 70%.

With 1.5GW wind and over 2GW of solar PV out of 23GW total installed capacity, Chile is very close to its 2025 target of making non-hydro renewables supply 20% of its electricity. Currently renewables account for 18% of total power supply and the country has set its aims even higher to reach 70% supply by 2050.

Additionally, Chile has set in motion a plan to decarbonise its economy and shutter all 5GW of coal-fired capacity by 2040.

Enel didn’t say whether the deal would require it to build new renewables capacity.

Chile is one of world’s leading producers of copper, lithium and other mining products, which account for around 10% of its GDP and over 40% of its exports.

Since 2017, several mining companies have signed renewable energy PPAs and investment in solar or wind facilities. Last year, Chilean mining group Empresa Nacional de Minería de Chile (ENAMI) with Spanish construction company Acciona announced it will build solar PV plants to supply its mining activities from 2022.

Wind

Enel Chile will supply renewable power to Anglo-American