Nick Rea Archives - International Mining

Ora Banda Mining and Wesfarmers’ liquified natural gas business, EVOL LNG, have signed a new long-term agreement to bring LNG to the Davyhurst gold mine in Western Australia’s Goldfields region.

The gold mine is aiming to restart production in January 2021 after being placed into care and maintenance in 2018.

Ora Banda’s definitive feasibility study (DFS) for the Davyhurst Restart project outlined a production target of 418,000 oz of gold over an initial five-year mine life based on an ore reserve of 460,000 oz (6.1 Mt at 2.4 g/t Au) from six deposits within 50 km of the existing 1.2 Mt/y plant. The plant is being refurbished by GR Engineering Services.

EVOL LNG’s Manager, Nick Rea, said the business had proven its winning LNG solution to the mining industry over the past 12 years with its customer base continuing to grow.

“We are excited to support the Davyhurst mine back into production,” he said. “Ora Banda is now our ninth mining customer and we are keen to provide them with the benefits and value that are afforded to EVOL LNG’s customers.”

EVOL LNG will build, own, operate and maintain the on-site LNG storage and vaporisation facility at the mine. The facility will use EVOL LNG’s modular design, which, the company says, allows for fast installation and expandability if the mine’s energy requirements increase in the future.

Ora Banda Mining’s Managing Director & CEO, David Quinlivan, said: “Ora Banda’s agreement with EVOL LNG has enabled the company to secure a stable long-term energy solution for Davyhurst on terms consistent with those outlined in the DFS. The use of LNG as the primary fuel source for the Davyhurst power station also provides significant
environmental benefits.

“The company estimates its power generation greenhouse gas emissions will be reduced by approximately 25,000 t during the initial five years of operation when compared to conventional diesel power generation.”

The mine will use EVOL LNG to fuel a 7.5 MW gas-fired power station, with supply planned to commence from December 2020.

The LNG will be supplied from EVOL LNG’s Kwinana production facility in Western Australia, which was expanded earlier this year. Planning is underway for the next expansion to meet the growing market demand.

Adaman Resources’ owned Kirkalocka gold project, in Western Australia, is set to be powered by LNG after the asset owner and EVOL LNG signed a agreement.

The long-term arrangement, between EVOL and Adaman Resources’ wholly-owned subsidiary Kirkalocka Gold SPV Pty Ltd, will see EVOL LNG fuel Zenith Energy’s 14.5 MW power station, with supply planned to commence from September 2019.

The gold mine, around 70 km south of Mt Magnet in the mid-west region of Western Australia, is set to restart operation after more than a decade, with the mine’s new owners refurbishing the processing plant and increasing its capacity to over 2.2 Mt/y.

EVOL LNG and Wholesale Manager, Nick Rea, said the use of LNG as an alternative to diesel will help minimise the mine’s carbon emissions.

“LNG produces 25% less CO2 emissions than diesel, and during the initial six years of operation, the mine will avoid 50,000 t of greenhouse gas emissions by fuelling its power station with LNG instead of diesel. This is the equivalent of keeping around 3,000 cars off the road,” Rea said.

EVOL, part of Wesfarmers Chemicals, Energy & Fertilisers, will build, own, operate and maintain the on-site LNG storage and vaporisation facility at the mine, it said. “The facility will use EVOL LNG’s modular design which allows for fast installation and expandability to suit the mine’s growing energy requirements,” the company added.

Adaman Resources’ Chief Executive Officer, Craig Bradshaw, said EVOL LNG will provide environmental, financial and economic benefits for the company.

“Utilising LNG as an alternative to diesel-fired generation will significantly reduce our energy costs and exposure to volatile diesel prices. Based on the current diesel price, we estimate our energy costs to be reduced by more than A$13 million ($9 million) during the first six years of operation,” he said.

EVOL’s Rea said Kirkalocka was the company’s third major contract in the mid-west in recent years; he sees huge potential for growth in this region.

“The scarcity of gas pipelines and absence of grid power would otherwise force off-grid mines to use diesel for power generation, but we are able to provide a much better solution with LNG. It’s clean, safe, reliable and lower cost than diesel.

“We have proven ourselves to the mining industry over the last decade, with seven mine sites now powered by EVOL LNG,” he said.

Ora Banda’s Davyhurst gold mine restart to be powered by LNG

Adaman’s Kirklalocka gold project to be powered by LNG