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Wesfarmers’ Evol and Adaman sign LNG deal for Kirkalocka mine

Adaman Resources will power its Kirkalocka gold mine with liquefied natural gas (LNG) supplied by Wesfarmers subsidiary Evol LNG thanks to a new arrangement between the companies.

Evol LNG will supply the gas to fuel the mine’s 14.5 megawatt power station owned by Zenith Energy — from September 2019.

As part of the agreement, Evol will also build and maintain a modular LNG storage and vaporisation facility at the Kirkalocka site.

The modular design of the facility, which will be owned by Evol throughout Adaman’s operations, will help to allow for fast installation and expansion should the site continue to grow in future.

The Kirkalocka mine, 75 kilometres south of Mount Magnet in the Mid West region, has been inactive since 2008.

Adaman purchased the mine last year and has secured $55 million in funding to restart the project.

The project produced 283,000 ounces from 2002 to 2008 under previous operators Equigold and Lihir.

Replacing the mine’s formerly used diesel setup is expected to provide environmental and economical benefits for the company including the minimisation of the mine’s carbon emissions, according to Evol LNG and wholesale manager Nick Rea.

“LNG produces 25 per cent less carbon dioxide emissions than diesel, and during the initial six years of operation, the mine will avoid 50,000 tonnes of greenhouse gas emissions by fuelling its power station with LNG instead of diesel,” Rea said. “This is the equivalent of keeping around 3000 cars off the road.”

Adaman Resources chief executive officer Craig Bradshaw added the company estimated it could save $13 million over the next six years based on the current diesel price by making the switch to LNG.

“Utilising LNG as an alternative to diesel-fired generation will significantly reduce our energy costs and exposure to volatile diesel prices,” he said.

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