UPDATE 2-GasAtacama, mines reach provisional energy deal

(Adds comment from GasAtacama Chief Executive)

By Pav Jordan

SANTIAGO, April 2 (Reuters) - Chile's GasAtacama, a major electricity supplier to the country's northern mining region, said on Wednesday it reached a provisional deal to supply power to a clutch of big mining firms amid an energy squeeze.

The deal was struck with BHP Billiton (BHP.AX: Quote, Profile, Research), state-owned Codelco and Collahuasi, which is owned by global miners Xstrata Copper (XTA.L: Quote, Profile, Research) and Anglo American (AAL.L: Quote, Profile, Research), GasAtacama and the mining firms said in a joint statement.

"The deal will take effect from March 1 until December 31 of 2011, or an earlier date depending on certain conditions of the deal taking place."

Under the deal, valued at between $600 million and $900 million depending on oil prices between $90 and $120 a barrel, GasAtacama and its shareholders will shoulder 26 percent of the total cost of supplying energy to miners who consume 90 percent of the electricity in the northern grid, or SING.

Mining firms will stump up the 74 percent balance proportional to their consumption, but only if the other miners drawing on the SING sign onto the deal in coming weeks.

"This initiative, led by BHP Billiton, Codelco and Collahuasi, seeks to incorporate the remaining clients of the SING, especially the mining companies, so that they sign the deal before April 21 2008," mining companies and shareholders of GasAtacama, Endesa and Southern Cross, said.

GasAtacama is in the midst of a financial crisis because it cannot cover high generating costs at contracted prices after Argentina cut supplies of low-priced natural gas to Chile and it was forced to use more expensive fuels to generate power.