NextSource Materials has awarded a power supply contract to independent power producer CrossBoundary Energy (CBE) for the long-term supply of solar and thermal generation to power the operations of its Molo graphite project in Madagascar.

The contract is for a 20-year term and has been designed to scale with the production output of the Molo mine, where delivery of power will increase in lockstep with all future expansion capacity requirements, NextSource said.

A subsidiary of CBE in Madagascar is developing the project and will build, own and operate the Molo hybrid energy power plant at no capital cost to NextSource, it said. The plant will be located adjacent to the Molo mine site and is expected to be operational at the same time as the Molo mine is due to be commissioned in the June quarter of 2022.

“Through this contract, NextSource will initially be able to source up to one third of the Molo mine’s total electricity needs from renewable solar energy,” NextSource said. “NextSource and CBE are committed to optimising the solar component throughout the contract to increase the percentage of renewable energy to a majority.”

The hybrid energy power plant will comprise a 2.5 MW solar PV energy system, a 1 MWh battery energy storage system (BESS) and a 3.3 MW thermal energy system (diesel generators) that will supply all the electricity requirements for the Molo mine and processing plant. The thermal energy system will be used in combination with the solar plant and BESS to provide uninterrupted power supply and ensure 100% power availability to the mine, NextSource said.

The renewable energy services provided by CBE will be supplied exclusively to NextSource and provide guaranteed energy cost savings, according to the mine developer. This rate will lower expected energy costs on a per kWh basis versus the expected cost per kWh rate based on thermal power alone, as modelled in the company’s 2019 Molo feasibility study. This study outlined a phased development approach at Molo with Phase 1 producing 17,000 t/y over the first two years of production and Phase 2 producing a total of 45,000 t/y by year three. Earlier this year, the company announced the initiation of a technical study for an expanded Phase 2 production capacity of at least 150,000 t/y of SuperFlake® for Molo.

NextSource added: “The hybrid plant will contribute significantly towards NextSource’s adherence to its environmental, social and governance principles. It will also achieve the company’s broader initiative to reduce its environmental footprint through the deployment of renewable energy infrastructure to reduce emissions and work toward its goal of a carbon-neutral energy system.”

NextSource President and CEO, Craig Scherba, said: “Deployment of clean, renewable and sustainable power sources to reduce emissions is a cornerstone of our operational strategy and will reduce our expected energy costs over the life of our project.”

Matthew Fredericks, Head of Mining at CrossBoundary Energy, added: “We worked closely with the NextSource Materials team to design a custom solar hybrid solution for the Molo graphite facility. This power system will reduce the mine’s total cost of electricity, lowering its all-in sustaining costs, as well as minimising its carbon emissions. CBE is proud to be awarded this second project opportunity in Madagascar and honoured for NextSource Materials’ selection of our flexible, collaborative approach to sustainable energy solutions for African mines.”

Earlier this year, CBE announced two additional hybrid renewable energy projects, the first for Rio Tinto’s QMM ilmenite operation in Madagascar, and the second for Eramet’s mineral sands mine, Grande Cote Operations, in Senegal. In total, CBE is now delivering 40 MW of solar and wind generation and 20 MWh of battery energy storage capacity for African mines.