Chile Court Blocks MPX Energia’s Castilla Power Project

Chile’s Supreme Court blocked the construction of a proposed coal plant by Brazil’s MPX Energia SA (MPXE3) on the northern coast of the South American country.

The court ordered MPX to resubmit an environmental impact study that considers the construction of a port and the power plant as a single project, Judge Sergio Munoz said in a statement today. MPX, which had filed separate studies on the port and the plant, will “reassess its business plan,” it said in an e-mailed statement today.

MPX, controlled by Brazilian billionaire Eike Batista, proposed the $5 billion project to boost regional power supplies as mining companies including Teck Resources Ltd. (TCK/B) and Barrick Gold Corp. (ABX) plan new mines in Chile’s Atacama region. Chile has been hampered by power blackouts since an 8.8-magnitude earthquake struck in February 2010.

MPX rose 1.8 percent to 11.91 reais in Sao Paulo trading today, reducing a year-to-date decline to 6.6 percent.

MPX planned to develop the project with EON AG, Germany’s largest utility. The project, with capacity of 2,100 megawatts, is part of a planned installation of 11,000 megawatts in Chile and Brazil by the EON-MPX venture. MPX is 48.1 percent owned by Brazilian billionaire, according to data Bloomberg compiled. EON, which acquired an 11.7 percent stake in MPX by July, plans to expand in South America through their venture.

To contact the reporter on this story: Matt Craze in Santiago at

To contact the editor responsible for this story: James Attwood at

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