UPDATE 1-Chile suspends Endesa's planned $1.4 bln thermo plant
* 740-MW project's environmental impact study rejected
* Endesa says to appeal to govt over decision
* Energy woes hammering world top copper producer (Adds analyst comment, details, link, share price)
SANTIAGO, June 25 (Reuters) - A Chilean environmental commission suspended energy firm Endesa's $1.4 billion, 740-megawatt Punta Alcalde thermoelectric project planned for the mineral-rich north of the world's top copper mining nation, the company said on Monday.
Endesa said it would appeal to the government over the decision to reject Punta Alcalde's environmental impact study, the latest blow to a mega project in power-starved Chile.
Environmental groups are increasingly opposing power projects ranging from coal-fired thermoelectric plants in Chile's northern Atacama, the world's driest desert, to hydropower dams in the wild southern Patagonia region.
The two coal-fired 370-megawatt units are planned by Endesa in Chile's Atacama region, close to Antofagasta Minerals' Los Pelambres mine, the Cerro Casale project owned by Barrick Gold and Kinross, and Lumina Copper's Caserones mine.
"With such a massive rejection, I think it will be hard to revert (the decision)," said Hugh Rudnick, professor and energy analyst at the Universidad Catolica in Santiago.
Years of under-investment, a destructive 8.8 magnitude earthquake in 2010, droughts and the country's long, thin shape have degraded Chile's power grid, drawing increasing fire from energy-intensive mining firms.
Other energy and mining projects in the Atacama region are also reeling from legal setbacks.
Chile's top court suspended a key permit for Canadian miner Goldcorp Inc's $3.9 billion El Morro copper-gold project in April and is due to rule on Batista's MPX Energia and giant German utility E.ON's $5 billion Central Castilla in coming weeks.
"If Castilla is rejected (the Atacama region) would be in a fairly complicated situation... they'd have to turn to diesel, maybe even natural gas," Rudnick said.
A spike in lawsuits against key energy projects is increasing already steep power prices and inhibiting investment, deputy energy minister Sergio del Campo told Reuters in an interview earlier this month.
Environmental groups say many of the massive energy projects would harm air quality, destroy pristine Patagonian areas or pollute often-scarce water supplies.
"Punta Alcalde's environmental impact study wasn't able to fulfill the minimal requirements requested by public health authorities," said Cristian Gutierrez, the director of the Oceana environmental group.
"Places like Huasco (where Punta Alcalde is planned) have turned into highly industrial areas that could be considered 'sacrifice areas' given the environmental pollution local residents and the environment are exposed to."
Chile aims to boost copper output from last year's 5.24 million tonnes to over 7 million tonnes by 2020, but key expansion projects and new deposits require more energy.
The country's power matrix has a capacity of 17,000 megawatts and the government aims to add another 8,000 megawatts by 2020.
Shares in Endesa were trading 0.06 percent lower in early afternoon trade, outperforming a 0.82 percent fall on Santiago's blue-chip IPSA index. (Reporting and writing by Alexandra Ulmer; Additional reporting by Antonio de la Jara; Editing by Sofina Mirza-Reid and Tim Dobbyn)
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