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Arauco Has a Stalled Wind Plan in Biobío but Affirms "Long-Term Commitment to Chile"

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• This refers to the $250 million Viento Sur project. The forestry company states that, in any case, they are evaluating the construction of another wind farm in the same region, though its environmental permitting process has not yet begun.

At forestry company Arauco—linked to the Angelini group—they assure that the announcement of a $4.6 billion investment in Brazil does not mean the firm is withdrawing from Chile. On the contrary, the company affirms it has an "unrestricted and long-term commitment to Chile."

This is despite facing obstacles in the country to develop certain projects, such as the $250 million Viento Sur wind farm in Biobío, which received its Environmental Qualification Resolution (RCA) in 2022. Additionally, security issues, arson, and theft affecting the entire forestry sector limit its expansion in Chile.

Nevertheless, Arauco highlights ongoing investments in Chile, including a new OSB panel production line worth approximately $92 million. Another wind farm in Biobío, called Viento Lomas, is in the early stages of public consultation and may soon begin its environmental permitting process.

Ministers' Committee

The Viento Sur wind farm was reviewed in late January this year by the Ministers' Committee, which upheld it and rejected a claim against the project filed by individuals and an indigenous community. However, the company is still awaiting the committee's final approval resolution.

Still, the ministerial body indicated at the time that it would modify the RCA ex officio, incorporating "clarifications and conditions proposed by the SEA," as recorded in the committee's January meeting minutes.

Among the conditions mentioned, the plan must include wind turbines and navigation lights following recommendations from the "Guide for Environmental Impact Assessment of Wind and Power Transmission Line Projects on Wild Birds and Bats" by the Agricultural and Livestock Service. Additionally, turbine blades must be painted to enhance visibility for birds.

At the same time, the monitoring plan for "flying fauna" must be adjusted from monthly to biweekly frequency.

Meanwhile, the minutes note that, considering the General Water Directorate's ruling, before constructing "Structures N° 57 to 61," the developer must prove to the DGA that they are not within the riverbed. This requires evaluating the 100-year flood levels of the El Guindo and Palihue streams. If they are within the riverbed, the company must obtain the relevant environmental permits from the DGA.

The Environmental Impact Study for the Viento Sur project was submitted to the SEA in early 2019.

Financing

The $4.6 billion pulp plant project approved by Arauco's board in Mato Grosso do Sul, Brazil, is expected to generate around 14,000 jobs at peak construction.

This investment surpasses the Modernization and Expansion of the Arauco Plant (MAPA) in Biobío, which involved $2.85 billion. It’s worth noting that MAPA was cleared for implementation in 2017 after the Supreme Court approved its environmental permitting, six years after initial studies began.

Arauco will finance the Sucuriú plant in Brazil—scheduled to begin operations by late 2027—through debt, a capital increase, and internal resources.

In late 2023, Arauco reported a major sale of forests—primarily in Paraná, Brazil—that were not strategic for the company or necessary for the Sucuriú project. The sale totaled around $1.1 billion, which will help fund the Mato Grosso do Sul pulp plant.

Arauco entered Brazil in 2002, expanding its panel business and acquiring assets from Masisa, among other steps.

Source: subscription edition ofEl Mercurio