Northern Star lights up KCGM with power grab

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Northern Star Resources has solidified the power supply to Kalgoorlie Consolidated Gold Mines (KCGM), taking the option to purchase Newmont Corporation’s power business.

The option formed part of Northern Star’s $1.17 billion acquisition of a 50 per cent interest in KCGM, which was confirmed in early 2020.

As part of the acquisition, Northern Star paid $25 million for the option to pay $95 million for Newmont’s power business – GMK Investments – which owns Newmont Power and NP Kalgoorlie.

NP Kalgoorlie owns 50 per cent of Goldfields Power, which is the holder of the Parkeston power station in Kalgoorlie.

Northern Star managing director Stuart Tonkin said the 110-megawatt (MW) power station opened a few doors for the company.

“The purchase means our Kalgoorlie power supply will now form part of our studies into ways to meet our commitment to becoming carbon-neutral,” Tonkin said.

Newmont president and chief executive officer Tom Palmer said the sale would allow for greater focus on more important Newmont assets in Australia.

“Australia is a critical contributor to Newmont’s global portfolio of world-class assets, located in top-tier jurisdictions,” Palmer said.

“With the sale of this non-core asset, we will continue our regional focus on delivering long term value at our Boddington and Tanami operations and advancing our future project pipeline through active exploration campaigns.”

Northern Star listed a few specific benefits of buying the power station from Newmont.

These included infrastructure and power security to support the requirements of KCGM; lower power costs at KCGM; and further options for Northern Star to implement renewable energy.

The wider Kalgoorlie area also receives power from the Parkeston power station through its connection to the south-west interconnected system, highlighting the station’s reliability.

The power station will play a part in Northern Star’s push to becoming a two million ounce per year gold producer, ahead of a feasibility for its expansion anticipated for the June quarter of 2022.

KCGM comprises the Golden Pike, Morrison, Oroya Brownhill and Fimiston South operations, and forms part of Northern Star’s Kalgoorlie production centre.

The Kalgoorlie production centre also includes the Carosue Dam and Kalgoorlie Operations. 

In October, Northern Star displayed its commitment to renewable energy with a 3.3MW expansion to its re-deployable solar farm at the Carosue Dam gold mine in Western Australia.

This built upon an existing 1MW solar farm commissioned at the start of 2020 and will be further expanded in 2022, bringing the operation’s total solar capacity to 6.3MW.

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