Geo­ther­mal use makes more cents for Li­hir

The Weekend Australian - Travel - - Resources -

LI­HIR Gold Ltd says it will save sub­stan­tial en­ergy costs at its flag­ship Li­hir Is­land mine in Pa­pua New Guinea by us­ing its own ex­panded 56 megawatt geo­ther­mal power sta­tion.

Chief ex­ec­u­tive of­fi­cer Arthur Hood says us­ing geo­ther­mal en­ergy will save the com­pany $US40 mil­lion this year.

The mine has 23.6 mil­lion ounces of ex­ist­ing re­serves, which are suf­fi­cient for min­ing to con­tinue un­til about 2021, with 40 mil­lion tonnes of eco­nomic grade ore stock­piles — con­tain­ing 3.5 mil­lion ounces of gold — to be pro­cessed be­yond 2040.

The com­pany has re­ported a bot­tom line net loss of $US53.1 mil­lion ($A66.4 mil­lion) for the half year to June 30, due to the im­pact of losses re­lated to its now closed out gold hedge book and the early re­pay­ment of a gold loan.

The gold pro­ducer’s op­er­at­ing profit was $US94.7 mil­lion ($A118.34 mil­lion), a 45 per cent jump on the pre­vi­ous cor­re­spond­ing pe­riod, due to record gold pro­duc­tion and higher re­alised gold prices.

Hood says the com­pany will spend $US10 mil­lion ($A12.5 mil­lion) this year on geo­ther­mal ex­plo­ration and $US20 mil­lion ($A24.99 mil­lion) on sink­ing new geo­ther­mal wells.

‘‘ The pay­back on the cap­i­tal ex­pen­di­ture for the geo­ther­mal power plant is about two and a half years,’’ he says.

‘‘ Geo­ther­mal power costs us about one (US) cent per kilo­watt hour to pro­duce but with diesel power, you’re look­ing at 12-13 (US) cents per kilo­watt hour to pro­duce.

‘‘ It’s help­ing us to hold our ag­gre­gate costs down and as we in­crease pro­duc­tion, so we re­duce our unit cost of pro­duc­tion, so it’s a key ad­van­tage for us in the cur­rent mar­ket with ris­ing fuel prices.’’

The com­pany’s gold pro­duc­tion cost dur­ing the half year was $US282 per ounce, which com­pares favourably to $US312 per ounce in the pre­vi­ous cor­re­spond­ing pe­riod.

‘‘ Unit costs are com­ing down but not as far as we would like partly due to the ex­change rate and partly due to the fuel price, but even just hold­ing unit costs in place is a good vic­tory in the cur­rent mar­ket with ev­ery­body else’s unit costs go­ing up,’’ Hood says.

AAP

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