MPX and MMX Signed Addendum to Energy Supply Contract

OREANDA-NEWS. May 4, 2012. MPX and MMX announced that they have signed an addendum to the energy supply contract announced on September 12, 2011.

Under the terms of the addendum, from January 2014 through December 2018, MPX will supply power to MMX’s Serra Azul unit via its trading subsidiary MPX Comercializadora de Energia, through a Free Market bilateral contract, at a price of BRL 102/MWh (as of November, 2011), according to the schedule below:

The initial energy supply through MPX Comercializadora de Energia, which took an opportunity to buy power in a down market moment, benefiting both parties, will enable MPX to seek new commercial opportunities for the additional power that can be generated, with no need for additional gas, by closing the cycle (i.e., adding boilers and a steam turbine) at TPP Parnaнba – Phase II. This is in keeping with MPX’s ongoing strategy to capture opportunities in the power market and use its trading arm to maximize the value of its assets.

From January 2019 until May 2029, the terms of the original energy supply contract remain unchanged. MPX’s TPP Parnaнba will supply MMX with 200 average MW, at a base price of BRL 125/ MWh (as of May 2011), using a self-production structure.

The amended schedule is summarized below:

The advantage of a self-production agreement compared to a bilateral contract of electric power purchase and sale in the Free Market is related to the exemption from energy sector charges, which, currently, amount to approximately BRL  40/MWh.

An addendum was also signed with other parties replacing the 5-year supply of 30 average MW under a self-production contract by a Free Market bilateral contract with MPX’s trading subsidiary MPX Comercializadora de Energia, beginning in January, 2013.