Tag Pacific (ASX:TAG) should trade higher after signing a contract withn First Solar, Inc., a global photovoltaic systems provider, to construct a solar power plant for Rio Tinto (ASX:RIO) Alcan’s Weipa bauxite mine in North Queensland.
The Weipa project involves the construction of a 1.7 megawatt solar farm at a cost of $4 million. A possible second stage, worth $17 million, is planned by First Solar but is not included in this contract.
The solar project will be the first of its size in Australia for a remote mining site.
Construction will commence immediately scheduled to be completed in the first half of 2015.
Tag's MPower business provides power systems for critical applications, and the Weipa project demonstrates its capability to integrate renewable energy into remote off-grid power stations.
Tag’s involvement comes after it acquired certain assets of Ingenero Pty Ltd, an Australian solar power company that was placed into receivership in July.
The assets included an experienced project team, with the capability to win and manage large-scale solar projects such as Weipa, and intellectual property.
By picking up this construction role, Tag has cemented an important first step in the delivery of large-scale solar power projects for the mining sector, and developing a meaningful revenue stream in this area.
Tag has invested in a diverse range of companies and activities that have been brought together primarily to operate under the banner of MPower.
Revenues for the most recent financial year were $54.3 million, and the company is capitalised at around $11 million.
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