Resolute Mining Limited (ASX:RSG) (FRA:RSM) expects to save around 40% in power costs at its Syama Gold Project in Mali after executing an agreement for the development of a 40-megawatt independent solar hybrid power plant.
A Joint Development Agreement (JDA) has been signed with Ignite Energy Projects Pty Ltd, a leading financier, developer and operator of power projects in Africa.
Combination of technologies
The Syama Solar Hybrid Power Plant will combine solar, battery, and heavy fuel oil (HFO) technologies.
When constructed, this innovative project is expected to be the world’s largest off-grid, fully integrated hybrid power plant for a standalone mining operation.
Resolute’s managing director and CEO John Welborn said the company was pleased to announce the JDA, which followed a comprehensive global evaluation process seeking the most cost-effective, environmentally-friendly power solution.
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“Resolute aims to be a leader in mining innovation and to promote responsible and sustainable positive economic growth in Africa,” he said.
“The partnership with Ignite Energy to develop a low-cost solar hybrid power solution for Syama will establish the company as a global leader in energy solutions for the mining sector.
“The project is entirely consistent with our ongoing efforts to use innovation and technology to optimise and enhance our Syama operations and deliver exceptional outcomes for our shareholders.”
Syama’s new power plant will replace the existing historical 28MW diesel-fired power station and is expected to be fully operational by the end of 2020.
The power solution will be funded and constructed under an Independent Power Producer (IPP) model.
This will see Ignite Energy, under the terms of an exclusive Power Purchase Agreement, being responsible for design, construction, ownership, funding, and operation of the new facility on an exclusive basis.
Power will be supplied to Resolute on a guaranteed basis subject to a maximum tariff over a term of between 12 and 20 years.
Reduced reliance on diesel
In addition to higher efficiencies of the solar hybrid solution, the replacement of Resolute’s existing diesel generated power plant will reduce reliance on, and exposure to, diesel prices.
The facility will also provide significant environmental benefits including lower carbon emissions as a result of solar power generation and the greater efficiencies of integrated battery storage hybrid technology and improved engine technologies.
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Welborn said: “The scale of this project will be a world-first – a unique combination of solar, battery, and HFO storage and generation capacity which will provide Syama with long-term low-cost electricity with minimal capital requirements.
“The Syama Solar Hybrid Power Plant will deliver long-term electricity cost savings of up to 40% at Syama while reducing carbon emissions and providing tangible benefits to local Mali communities.
“The project is a key component of delivering the expected sub-US$750 per ounce all-in-sustaining-cost for Syama Underground Gold Mine.”
Syama’s Solar Hybrid Power Plant will comprise an advanced combination of modern Solar PhotoVoltaic (PV) generation, HFO based generation and battery-based energy management system.
HFO fuel costs can be up to 50% lower than diesel with larger modern generating units substantially more efficient than Resolute’s current engines.
Substantial cost reduction
The addition of a component of sustainable environmentally friendly low-cost power from Solar PV and the use of batteries to provide spinning reserve and manage loads more efficiently are projected to result in a substantial reduction in power costs.
The addition of a new lower-cost power solution was incorporated into an updated definitive feasibility study for Syama.
It was a key component in the reduction of life of mine all-in sustaining cost for Syama Underground Gold Mine.