Geothermal use makes more cents for Lihir
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.