Newmont Mining says it has completed the Tanami power project, in the Northern Territory of Australia, safely and on schedule.
The project included the installation of two power stations, a 66 kV interconnected power line, and a 450 km natural gas pipeline. The pipeline was built and will be maintained by Australian Gas Infrastructure Group, while the power stations were constructed and will be operated by Zenith Energy. Capital costs are estimated at approximately $245 million with annual cash lease payments over a 10-year term beginning in 2019.
The successfully completed project is expected to provide the Tanami gold mine a safe and reliable energy source while lowering power costs and carbon emission by 20%, Newmont said. The project is expected to generate net cash savings of $34/oz from 2019 to 2023, delivering an internal rate of return of greater than 50%.
Newmont Chief Executive Officer, Gary Goldberg, said: “In addition to lowering costs and carbon emissions, the completed Tanami power project will pave the way to further extend the life of the operation.
“Consistent execution and delivery remain the hallmark of our ability to generate free cash flow and create long-term value for our shareholders and other stakeholders. Completion of the project coincides with Tanami pouring its 10 millionth ounce of gold on the back of record production of 500,000 oz last year. This achievement is a testament to the skill of our team as well as our valued partnership with the Walpiri people, the Traditional Owners of the land.”
Tanami is Australia’s second largest underground gold mine and one of the most cost competitive gold producers in the world, according to Newmont. Newmont’s continued exploration work at Tanami has created the potential to extend mine life beyond 2028, with additional upside through a possible second expansion project the company expects to make a full funding decision on in the second half of 2019. Last year, more than 800,000 oz of gold resources were converted into reserves from Tanami’s Auron orebody.