Strandline seals energy agreement for Coburn with Contract Power Australia

Strandline Resources has executed a 15-year electricity supply agreement (ESA) with Contract Power Australia, a wholly owned subsidiary of Pacific Energy Ltd, to build, own, operate and maintain (BOOM) the power generation and LNG storage and regasification facilities for the Coburn mineral sands project in Western Australia.

Coburn’s purpose-designed power infrastructure is based on a low-cost, low-emission solution integrating natural gas-fuelled generation with state-of-the-art solar and battery storage technology.

The executed ESA, which follows Contract Power Australia being appointed preferred contractor at Coburn, enables Strandline to capture energy supply cost savings relative to the definitive feasibility study published in June 2020. This study anticipated a development capital for the project of A$260 million ($199 million), excluding financing costs.

Contract Power specialises in turnkey design, installation and operation of energy assets and has a strong track record of delivery in the mining sector of Western Australia, Strandline said.

Coburn’s power station will be located near the mineral separation plant. The power station is designed to be suitable for a maximum demand capacity of 15 MW and average consumed power of circa-10 MW. Natural gas will be supplied by others under an industry standard long-term LNG supply agreement and trucked to an on-site storage and re-vapourisation facility supplied by Contract Power. The LNG then feeds a set of engine generators on an N+1 basis and has circa-30% solar (renewable) penetration for the major stable loads. Generation is at 11 kV with step up to 22 kV for power transmission to the project loads across the mine site.

Coburn has a JORC compliant mineral resource of 1,600 Mt at 1.2% total heavy mineral (THM), classified as 119 Mt measured, 607 Mt indicated, and 880 Mt inferred. The ore reserve comes in at 523 Mt grading 1.11% THM for circa-5.8 Mt of contained heavy mineral, underpinning an initial mine life of 22.5 years at a mining rate of 23.4 Mt/y.

The contract is based on a 15-year BOOM commercial model with fixed and variable payment regime for power consumed over the term, Strandline said. The contract provides for incorporation of wind turbine and other new generation technology solutions under agreed commercial structures as and when they become commercially attractive to the project.

Strandline Managing Director, Luke Graham, said the execution of this major development and operational contract marked another key step in the company’s strategy to bring Coburn into production as well as establishing an important relationship with Contract Power, a leader in sustainable clean energy generation in Western Australia.