The construction of Chile's 8.8MW Aguas Blancas solar park is to be delayed for 12 months due to falling iodine prices, according to its owner Etrion.
The Aguas Blancas solar park was scheduled to begin construction this quarter in the Antofagasta region in northern Chile, with a 15-year power purchase agreement with Atacama Minerals Chile. The 8.8MW solar park was to be completed by July 2014, powering the Aguas Blancas iodine mine owned by Atacama Minerals.
But Atacama Minerals, owned by Canada-based mining company Sirroco, has announced operations and expansion of the mine are to be suspended due to softening iodine prices, so the solar park will also be delayed.
A reduction of operations is expected to continue until a restart in 2015, with expansion to continue shortly afterward.
Independent power producer Etrion owns 100% of the Aguas Blancas solar park, investing approximately US$5 million, about 30% of the total project cost. The project was financed via a long-term non recourse project loan. Once complete the solar park is expected to generate US$2.8 million in revenue a year.
Metals and minerals market researcher, Roskill, predicted global iodine prices will continue to fall to 2017 due to increased production in South America.
Roskill estimates there was an 8% rise in Chile’s iodine production for 2013, and prices were expected to drop at the end of 2013 and the start of 2014. Overall prices are expected to slowly rise till 2017 in Chile.
The Chilean environmental authority, Servicio de Evaluación Ambiental (SEA) approved Etrion’s environmental impact statement for Aguas Blancas solar park 29 May 2013. The solar park is to supplement the Interconnected System of Norte Grande grid, in Chile to supply the mine and local residents. Mining is a core part of Chile's economy with mining companies, (such as the CAP Group and SunEdison) proving popular in supporting the finance of solar projects in Chile, because of solar energy offering a more reliable, alternative energy source for large energy consumers such as mines.
Etrion is also partnering with Total on Project Salvador, a 70MW solar photovoltaic power plant in Chile that will initially operate on a merchant basis. Finance was secured last month, with 70% through non-recourse project debt from the Overseas Private Investment Corporation (“OPIC”). Construction of Project Salvador started in December 2013.