Tag Archives: Sheffield Resources

Woodside Energy and EDL to help power up Thunderbird mineral sands project

Sheffield Resources says the joint venture that manages the Thunderbird mineral sands project in Western Australia has secured a supply of LNG for at least five years from subsidiaries of Woodside Energy Group Ltd and EDL.

Kimberley Mineral Sands, owned 50:50 by Sheffield Resources and Yansteel, has executed a binding five-year agreement, with the ability for the parties to extend for a further five years, with Woodside Energy (LNG Fuels & Power) Pty Ltd, a subsidiary of Woodside Energy Group Ltd (Woodside) and EDLLNG Fuel to Power Pty Ltd (EDL) for the supply and delivery of approximately 650 tj/y of liquefied natural gas (LNG) to the project.

LNG will be supplied by the Woodside/EDL joint venture (WEJV) from Woodside’s Pluto LNG Truck Loading Facility, near Karratha in Western Australia, and transported to the KMS LNG storage facility by WEJV. WEJV will own and operate a purpose-built road tanker fleet to safely and reliably deliver the LNG to Thunderbird.

The agreement enables flexible, long-term gas supply to KMS for power generation, Sheffield said, adding that it was subject to a number of customary conditions precedent, including KMS making a final investment decision toward the development of Thunderbird, following the completion of project financing of Thunderbird.

Sheffield Resources Executive Chair, Bruce Griffin, said: “We are extremely pleased KMS have established a strong relationship with Woodside and EDL as they support KMS by delivering a low cost, efficient energy solution for Thunderbird. Thunderbird construction is continuing to advance at a significant pace and remains on track for first production in early 2024.”

A bankable feasibility study released earlier this year outlined a A$484 million ($314 million) Stage 1 project using a Single Mining Unit Plant that underpinned a 10.4 Mt/y mining operation and a processing plant design feed rate of 170 t/h. The Stage 2 project saw a duplication in year five of Stage 1 mining underpinning a 20.8 Mt/y mining operation and an increase in the processing plant feed rate to 290 t/h.

Earlier this month, Pacific Energy signed a 15-year Power Purchase Agreement with KMS, wherby Pacific Energy will design, build, own and operate a 16 MW high efficiency gas power station combined with 2 MW of battery storage and an on-site LNG storage and re-vaporisation facility with 10 days’ storage capacity for the Thunderbird project.

Pacific Energy secures hybrid power PPA for Thunderbird mineral sands project

Pacific Energy says it has signed a 15-year Power Purchase Agreement with Kimberley Mineral Sands (KMS) for the Thunderbird mineral sands project in Western Australia.

Under the agreement, Pacific Energy will design, build, own and operate a 16 MW high efficiency gas power station combined with 2 MW of battery storage and an on-site LNG storage and re-vaporisation facility with 10 days’ storage capacity.

The agreement accommodates the future addition of solar energy and the parties will commence working on this augmentation as soon as possible to create a larger hybrid power facility, Pacific Energy says.

Pacific Energy CEO, Jamie Cullen, said: “We are extremely pleased to have been selected to deliver an efficient power generation and gas storage solution for KMS’ flagship Thunderbird project.”

Sheffield Resources Executive Chair, Bruce Griffin, added: “We look forward to KMS expanding their relationship with Pacific Energy, and for the support from Pacific Energy to deliver a stable and efficient energy solution for Thunderbird. We welcome this important milestone step in establishing Thunderbird as the next major mineral sands producer in the near future.”

Construction is due to commence in December 2022.

KMS is owned 50:50 by Sheffield Resources and Yansteel.

A bankable feasibility study released earlier this year outlined a A$484 million ($325 million) Stage 1 project using a Single Mining Unit Plant that underpinned a 10.4 Mt/y mining operation and a processing plant design feed rate of 170 t/h. The Stage 2 project saw a duplication in year five of Stage 1 mining underpinning a 20.8 Mt/y mining operation and an increase in the processing plant feed rate to 290 t/h.

Pictured above: the Thunderbird process plant layout (power generation & storage area inset)

GR Engineering to build Thunderbird mineral sands processing plant

GR Engineering Services has been awarded an engineering, procurement and construction (EPC) contract with Thunderbird Operations Pty Ltd (TOPL) for a mineral processing plant and associated facilities for the Thunderbird mineral sands project in Western Australia.

TOPL is a wholly owned subsidiary of Kimberley Minerals Sands Pty Limited (KMS), which is 50% owned by Sheffield Resources Limited (ASX: SFX) (Sheffield) and 50% owned by YGH Australia Investment Pty Limited. The contract sum is A$179.5 million ($134.3 million).

GR Engineering will commence limited work under the contract until being issued with a full notice to proceed, ahead of a final investment decision being made by KMS to pursue the development of the project, it said. The final investment decision is expected in mid-2022 with project delivery scheduled to occur over an approximate 18-month period.

In May 2021, GR Engineering restarted early engineering and design works for the project and has been progressing critical path design and procurement activities. The company has a long-standing relationship with the project since 2017.

Geoff Jones, Managing Director, said: “We are extremely pleased to have been engaged to perform a key role in the development of the world-class Thunderbird mineral sands project. GR Engineering has been associated with the project over a number of years and it is exciting to see this project progress to the next stage of development.”

In a bankable feasibility study released on the same day as this announcement, Sheffield Resources outlined a A$484 million Stage 1 project using a Single Mining Unit Plant that underpinned a 10.4 Mt/y mining operation and a processing plant design feed rate of 170 t/h. The Stage 2 project saw a duplication in year five of Stage 1 mining underpinning a 20.8 Mt/y mining operation and an increase in the processing plant feed rate to 290 t/h.

Sheffield Resources’ Thunderbird mineral sands project to use LNG

Sheffield Resources has secured a 15-year agreement with Woodside Energy and Energy Developments Pty Ltd (EDL) for the supply and delivery of 1,950 TJ/y of liquified natural gas (LNG) to its Thunderbird mineral sands project in northern Western Australia.

LNG will be supplied from Woodside’s Pluto LNG truck loading facility, near Karratha in Western Australia (pictured), and transported to Thunderbird’s LNG storage facility by a newly formed joint venture between Woodside and Energy Developments. The JV will own and operate a purpose-built road tanker fleet to safely and reliably deliver the LNG to Thunderbird. This is customary with other gas logistic arrangements in place for the towns of Broome, Derby and other communities in the Kimberley region, according to Sheffield.

“The advantage of using LNG at Thunderbird is three-fold, providing Sheffield with a low-cost, low-emission fuel source that is ideally suited to the ilmenite low temperature roast (LTR) process proposed for the Thunderbird processing plant,” Sheffield said.

As previously announced, Sheffield has secured infrastructure funding support from the Northern Australia Infrastructure Facility (NAIF).

“Part of the A$95 million ($68 million) financing package will be allocated to the proposed Thunderbird LNG storage and power station facilities, which will be constructed and operated under separate agreement with third parties,” the company said.

“This arrangement will enable Sheffield to capture long-term gas supply cost savings relative to the bankable feasibility study (BFS) published in March 2017. The BFS assumed an outsourced LNG storage and power station facility model on a build own and operate basis.”

The NAIF funding arrangements enable in-sourcing of LNG storage and power station facilities to take place, providing significant reduction in operating costs compared with the BFS assumptions, according to the company.

The agreement is subject to several customary conditions precedent, including the company making a final investment decision toward the development of Thunderbird.

Sheffield Resources Managing Director, Bruce McFadzean, said: “The project is now fully permitted and construction ready, with offtake and financing agreements in place. We look forward to continuing our relationship with Woodside and EDL as we move toward development during 2019.”

Back in November, Sheffield signed up GR Engineering Services to build a 7.5 Mt/y mineral processing plant and associated facilities at Thunderbird.

Sheffield signs up GR Engineering for Thunderbird mineral sands project

Sheffield Resources has awarded the engineering, procurement and construction (EPC) contract for the building of a 7.5 Mt/y mineral processing plant and associated facilities at its Thunderbird mineral sands project in Western Australia to GR Engineering Services.

The contract sum is around A$366.3 million ($264 million) with commencement of work subject to GR Engineering being issued with a full notice to proceed. This, in itself, is dependent on Sheffield satisfying remaining financing conditions ahead of a final investment decision being made to pursue the development of the project.

GR Engineering’s award comes after it was engaged as preferred tenderer in October 2017 to progress early works on the project. The company has substantially progressed detailed design and procurement activities during this time, GR Engineering said.

Delivery is scheduled to occur over approximately two years from the date of site mobilisation, which is anticipated in the June quarter of 2019, following the wet season.

GR Engineering’s scope of work under the contract extends to the engineering design, procurement, construction, commissioning and testing of all process and non-process infrastructure for the project, including a wet concentrate plant, mineral separation plant, low temperature roasting plant, administration buildings, bore fields and high voltage power distribution in addition to all civil scope items. It will also provide operations support for a six month term post-completion.

Sheffield also secured a A$240 million seven-year loan from Taurus Funds that will be used to reduce the miner’s operating costs by at least A$7.5 million every year over a 42-year life of mine, it announced. This means it has been able to accumulate A$335 million of loan facilities to enable the project to proceed.

Sheffield says its bankable feasibility study shows Thunderbird is a technically low risk, modest capital expenditure project positioned to generate strong cash margins from globally significant levels of production over a mine life of 42 years.

The company is targeting initial production in the December quarter of 2020.

Northern Australia Infrastructure Fund boosting mine development

A new investment mandate for the Northern Australia Infrastructure Fund (NAIF) is helping more projects get off the ground sooner, NAIF Executive Director Peter Ross told delegates at the International Mining and Resources Conference 2018 (IMARC) in Melbourne.

Ross said the fund’s investment mandate, introduced in April, was proving significantly more flexible.

“We are now able to provide up to 100% of the debt finance for a project – up from 50% previously, and we can now also consider smaller projects below A$50 million ($35 million) in value, where they meet other criteria,” Ross said.

Since its establishment in 2016, the NAIF has grown its portfolio. It has moved from having five projects in due diligence in 2017 to making investment decisions on six projects in the last financial year.

“Our loan portfolio now stands at A$264 million, on Northern Australian projects valued at A$969 million,” Ross said.

“In addition, we have another A$750 million of loans that are conditionally approved. In total, the NAIF expects to soon be supporting projects valued at A$2.3 billion, which will provide thousands of jobs in Northern Australia and deliver long-term benefits for the region.”

As might be expected in Northern Australia, resource projects feature prominently in the NAIF portfolio. Since June 2017 a third of the projects considered for due diligence by the fund have been resources-related.

Of the six projects sanctioned, three are resource related.

Sheffield Resources’ Thunderbird mineral sands project (pictured) secured A$95 million in finance to develop its LNG power station and reticulation, and upgrade road and port infrastructure to support the project in WA’s West Kimberley Region.

The NAIF has also signed off on a A$95 million facility for the Onslow Marine Supply Base, and A$15 million for the upgrade of the Pippingarra Road, a 70 km public road to access the Pilgangoora lithium-tantalum mine being developed by Pilbara Minerals, near Port Hedland.

Ross said as word spread of the NAIF’s capacity, project enquiries were increasing. The NAIF has experienced a 320% increase in projects undergoing due diligence since September 2017.

Apart from being an infrastructure project in Australia’s north, to secure NAIF support a project must also have the capacity to repay or re-finance on commercial terms, be of public benefit, and demonstrate it has an effective indigenous engagement strategy.