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Batista’s MPX Wins Approval for $4.4 Billion Chile Project

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Feb. 25 (Bloomberg) -- MPX Energia SA, the power company controlled by Brazilian billionaire Eike Batista, won approval to build a $4.4 billion coal-fired electricity plant in northern Chile as the country seeks to overcome energy shortages.

Regional Governor Ximena Matas approved the Castilla project in a meeting earlier today with the national environmental authority, Rio de Janeiro-based MPX said today in a statement. The power plant will be Chile’s largest, equivalent to a fifth of installed generation capacity, the company said.

Castilla will be built on the Pacific Coast 700 kilometers (435 miles) north of Santiago and provide 2,100 megawatts of energy to Chile’s central power grid. Chile’s government lowered grid voltages earlier this month to avoid rationing as a drought sapped the country’s hydroelectric power-generation capacity.

“Chile needs energy to grow and Castilla will be, without a doubt, a structural development for the country in the next decade,” MPX said.

Minas CCX, a unit of MPX, will sell coal from mines in Colombia to Castilla, according to MPX’s website. MPX owns 40 million metric tons of coal in open-pit mines and a further 1.6 billion tons of underground reserves, it said.

GDF Suez last year agreed with Chile’s President Sebastian Pinera to relocate a $1.1 billion coal-fired power station in Chile’s Atacama region to protect nature reserves. Pinera said Aug. 26 said he would change legislation to make it more difficult for similar projects to get approval.

Opposition Groups

Opposition groups held protests during the meeting at the governor’s office in Copiapo, Chile, earlier today.

Energy and Minister Minister Laurence Golborne said Feb. 22 that Chile, the world’s largest copper producer, needs to approve energy projects to help achieve economic growth of 6 percent a year over the next decade and to eradicate poverty.

Empresa Nacional de Electricidad SA, controlled by Italy’s Enel SpA, and Colbun SA also seek environmental approval to build a $7 billion hydroelectric dam in Chile’s Patagonia region.

To contact the reporters on this story: Matthew Craze in Santiago at mcraze@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net

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