TORONTO—Kinross Gold Corp. says it is buying two hydroelectric plants in Brazil for $257 million to secure a low-cost power supply for its Paracatu mine.
The Toronto-based mining company says its subsidiary Kinross Brasil Mineracao has agreed to acquire the Barra dos Coqueiros and Cacu hydro power plants located on the Claro River in a neighbouring state about 660 kilometres west of Paracatu.
Kinross says the deal is expected to allow it to lower operating costs at Paracatu by eliminating about 70 per cent of future power purchases.
In addition, Brazilian legislation provides reduced power tariffs to companies that generate their own power supply, Kinross says.
Due to reduced tariffs, the company says it expects savings of approximately $15 per ounce, which is included as part of the total expected savings of approximately $80 per ounce of production cost of sales over the life of mine.
The acquisition is expected to close in approximately three to six months, subject to regulatory approvals and other conditions.