Tag Archives: power supply

Wärtsilä takes on power plant performance contract at Lihir gold mine

Wärtsilä is to help optimise the performance of the Lihir gold mine’s 170 MW power plant, in Papua New Guinea, as part of a 10-year tailored guaranteed asset performance agreement signed with Lihir Gold Ltd, part of Newcrest Mining.

The agreement has shared business case incentives based on key performance indicators (KPIs), which reduce operational cost and enhance power availability, supporting the mine’s production targets, according to Wärtsilä.

The 10-year agreement, worth over €150 million ($183 million), was signed in October and is targeted to take effect from the end of the March quarter. The expected revenues for 24 months of operation, some €20 million, have been included in Wärtsilä’s order book in the December quarter.

Lihir’s 170 MW power plant provides a critical electricity supply to run the operations of the mine. It has 22 Wärtsilä engines, of which the last one was commissioned in 2013.

The incentivised KPIs will lead to an increase in revenue and a reduction in operational cost, according to Wärtsilä, with the partnership enabling Lihir Gold to focus on gold production while Wärtsilä takes care of optimising the power plant performance.

The agreement will also provide the customer with maintenance and parts cost predictability, including a reduction in working capital.

The agreement includes full technical support, real-time monitoring of the equipment from Wärtsilä’s Expertise Centres, condition-based maintenance and asset diagnostic reporting, operational advisory support, as well as all planned and unplanned maintenance of the generator sets and auxiliaries. The agreement KPIs with shared incentives are based on fuel and oil consumption and power availability, with the option to adjust these KPIs by mutual agreement should the market change.

Daniel May, Manager – Power, Utilities, Projects & Engineering, Lihir, Newcrest Mining, said: “During the initial market engagement process, it was determined that Wärtsilä’s experience, track record and capabilities in Papua New Guinea made them the best partner to further develop the partnership agreement that has now been signed. This is a flexible solution that delivers incentives and benefits to both parties.”

Henri van Boxtel, Energy Business Director, Wärtsilä Energy, added: “This agreement takes a holistic approach to the plant’s operations and maintenance, and reflects the importance of the strategic partnership between Wärtsilä and the customer. By linking the availability and performance of the power generating plant to the mine’s productivity, we are establishing a flexible and beneficial business case that promotes efficiency and delivers real value over the entire lifecycle of the power plant. We are at the same time aiming to increase the reliability of the electrical supply, which can help raise the mine’s output.”

The total installed base of Wärtsilä’s power generating equipment in a number of projects in Papua New Guinea is 381 MW, of which 170 MW has been supplying power to Lihir Gold.

Aggreko stabilises power supply for Kinross at Tasiast gold mine

Aggreko has helped Kinross Gold shore up its power supply at the Tasiast gold mine in Mauritania, providing a turnkey heavy fuel oil (HFO) solution that has given the company time to review its longer-term energy needs.

The Tasiast mine is one of the largest open-pit gold mines in Africa, located in the remote north western region of Inchiri in Mauritiana.

As an off-grid mine it needed to have its own power supply and was being powered by a 25 MW HFO Wartsila power plant, with an additional 10 MW of diesel, both of which Kinross own, Aggreko said.

“The diesel technology was ageing, very inefficient and prone to regular breakdowns, which was incurring Kinross huge maintenance costs,” Aggreko explained.

Furthermore, the company had recently completed phase one of an expansion of the mine. This included the installation of a new SAG mill to increase the rock crushing capacity by 50% – from 8,000 t/d to 12,000 t/d – however, the power generation capacity had not been upgraded. This meant the redundancy available on site was significantly decreased once the mine expanded and heightened the risk of power failures.

The life of mine was expected to be at least another decade away in 2029 too, and, with the diesel price volatility impacting operations, Kinross needed to think about power for the mine over the longer term, as well as what it could do to alleviate the cost implications it was suffering, short term, Aggreko said.

It engaged Aggreko to explore the options.

To address the immediate issues, Aggreko offered a solution that was easy to integrate into the team’s current power mix, it said.

“Replacing the existing diesel plant with 13 MW of Aggreko’s HFO power meant we could reduce their reliance on diesel, and they could keep the old diesel sets as additional redundancy for emergencies,” the company said.

“We synchronised with their existing Wartsila HFO plant and integrated the systems smoothly with no interruptions to their operations – ultimately safeguarding production.”

With Aggreko providing a turnkey solution, the company didn’t need to worry about operating or maintaining this new plant, it said.

Delivering the plant on time was also crucial for Kinross, Aggreko said.

With eight months of planning, the contract was signed in June 2019. This requested Aggreko to deliver and commission the plant by the last day in November of the same year.

“Putting our deep experience of operating in Africa to use, specifically our knowledge of local importation and logistics challenges, we delivered the project not only on time, but also on budget,” Aggreko said.

Aggreko concluded: “Kinross have reliable, guaranteed power 24/7 to ensure their gold production is unaffected by power issues or further shutdowns, and it’s given them the breathing space and time to review longer-term power options for the remaining life of the mine.

“The solution we put in place to use HFO also made the fuel management easier using one fuel across both their existing Wartsila plant and the new plant, which was also more cost effective.”

Tasiast produced 391,097 ounces of gold equivalent in 2019, according to Kinross. For the second consecutive quarter, the mine achieved record quarterly production and a record average throughput rate of 16,100 t/d in the March quarter, as the mine continued to benefit from the phase one expansion.

The company is also in the middle of a phase stage expansion at the operation, which could see throughput capacity increase to 24,000 t/d by mid-2023.