PRESS RELEASE: The first phase of the strategy sees OZ Minerals' current South Australian assets remain connected to the electricity grid via a new high-voltage power transmission line, which will meet its operational requirements and enable its growth strategy for the region.
Agreements are being progressed with industry participants and the state government to facilitate the development and operation of the line, including ElectraNet to build, own, operate and maintain the new transmission line; and SolarReserve, a renewable energy developer, to cost share a section of the line's construction and operation.
The second phase will be progressively developed and includes procurement, to take place in the latter half of the year, and generation, which includes cost-saving initiatives and consideration of renewable energy options.
OZ Minerals chief executive Andrew Cole said: "In developing the strategy, we have addressed reliability, security and affordability for our current mining assets and enabled our ambitious growth aspirations for the region and beyond.
"The new transmission line will enhance security of power supply, reduce line losses and enable the execution of the Prominent Hill mine plan, Carrapateena operations and the exploitation of future optionality for district expansion at Carrapateena.
"The cost impact of the new line will be a 3% to 4% increase in Prominent Hill's Life of Mine All-In Sustaining Costs (AISC) from mid-2020 (previously guided at 2% to 5%), offset by a circa 1% cost benefit at Carrapateena. These cost estimates are based on SolarReserve's development of its solar thermal generation and storage facility near Port Augusta.
"The line will have the capacity for other users to draw power or input generation, which will improve the economics for other developments in the region and, as more users connect, OZ Minerals' operating costs will reduce proportionately."
He added: "Our approach to power procurement has vindicated our decision to sign a short-term, 18-month pricing agreement in 2017, as independent agencies are forecasting a downward trending power price market. As a result, we have flexibility to commit to short-term or long-term contract pricing, or a combination of both, and consider generation source options as they become more affordable."
The power strategy will also include a modest onsite solar generation plant at Prominent Hill, and OZ Minerals is working with a number of potential energy developers to explore and innovate new, additional renewable options across its assets.