Chilean-based copper mining group Antofagasta is set to acquire 40% stake in the 531MW Alto Maipo hydroelectric plant located on the Maipo River southeast of Santiago.

The company, through its subsidiary Antofagasta Minerals, has signed a binding agreement with AES Gener to acquire the proposed stake in project developing and operating company Alto Maipo.

In addition, the company has forged two 20-year power purchase agreement (PPA) to procure 160MW of power for its Los Pelambres operations. The first PPA is due to commence in 2015.

Commenting on the purchase, Antofagasta Minerals CEO Diego Hernández stated that the agreement is a significant part of company’s strategy to secure power for Los Pelambres and the company is also delighted to procure a long-term competitive energy price for its largest mining operation in Chile.

"We are also very pleased to create this alliance with AES, a global leader in electricity generation with considerable experience in Chile where it operates several run of river power plants in the Maipo River area, including one since 1923," added Hernández.

Antofagasta has obtained significant part of the total cost through debt finance, while the Company facilitating 40% of the equity of $300m.