Hudbay Minerals (TSX, NYSE: HBM) has reached a major milestone towards reaching its long-term emissions goals by securing a "consistent and guaranteed" renewable energy supply for its Constancia copper operations in Peru.
On Thursday, the diversified miner announced the signing of a new 10-year power purchase agreement ENGIE Energía Perú, one of the country's largest energy power generation and energy infrastructure companies. The energy contract will come into effect January 2026.
According to Hudbay, the new contract provides "improved flexibility in power supply levels and lower contracted costs" as compared to the existing power supply contract. It functions on a consumption basis, ensuring the company’s costs are variable based on actual usage, with no minimum spend or penalty for usage below the contracted rate.
The new contract also aligns with the company's greenhouse gas (GHG) emissions reduction initiatives, as it includes the granting of renewable energy certificates (RECs) to Hudbay as an assurance of the supply of renewable energy dedicated to Constancia’s electricity consumption. These RECs will be applied to Hudbay’s energy consumption to enable the company to have a 100% carbon-neutral energy supply.
As a result of the application of these RECs, total Scope 1 and Scope 2 GHG emissions at Hudbay’s global operations are expected to decline by 40% during the life of the contract, the company said, positioning itself well to achieve its 2030 climate change target of a 50% reduction in GHG emissions.
“We are proud of this achievement as it places Hudbay firmly in reach of achieving a 50% emissions reduction by 2030 and on track for net zero by 2050. Additionally, Hudbay’s low carbon footprint production will continue to produce the metals needed for the global transition to a low-carbon future," Peter Kukielski, Hudbay’s president and CEO, commented in a news release.
Earlier this month, the company expanded its copper asset portfolio with the US$439 million acquisition of Vancouver's Copper Mountain Mining (TSX: CMMC), which would make it the third-largest copper miner in Canada.