MELBOURNE (Reuters) - BHP Billiton Ltd plans to spend millions of dollars in a venture with a Canadian power company to promote carbon capture technology to help shore up coal demand.
BHP, the top global miner and biggest exporter of coal used in steel plants, and Canada's Saskatchewan Power [SSPOW.UL] said on Thursday they planned to set up a center to support research and cut the costs and risks facing new carbon capture and storage (CCS) projects worldwide.
BHP declined to reveal the exact amount to be invested in the venture, saying terms have yet to be agreed.
"To achieve the type of goals that we're looking to achieve, it would be a multimillion dollar contribution over several years," said Graham Winkelman, a senior manager for environment at BHP.
SaskPower opened the first large-scale CCS project at a coal-fired plant a year ago, aiming to capture 90 percent of the carbon emissions from the Boundary Dam plant after a C$1.35 billion ($1 billion) overhaul.
CCS technology is seen as essential to the future of fossil fuel-fired power plants amid the global push to limit emissions of greenhouse gases to curb climate change.
"SaskPower have said given their experience on Boundary Dam, their next CCS project is likely to be 20 or 30 pct cheaper than the first version," Winkelman told Reuters.
The partnership with SaskPower is part of a twin strategy by BHP to promote the cleaner burning of fossil fuels, while at the same time promoting renewable energy technologies such as battery storage.
Both angles will promote demand for the metals, coal, oil and natural gas that BHP produces.
The central Canadian province of Saskatchewan is also where BHP is developing a multibillion dollar potash project.
Reporting by Sonali Paul; Editing by Tom Hogue