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Minining invests in geothermal project in Argentina to offset fuel cost

Minining invests in geothermal project in Argentina to offset fuel cost Veladero Gold Mine, San Juan, Argentina (source: Barrick Gold Corp.)
Alexander Richter 22 Mar 2013

Gold mining giant Barrick Gold Corp. invests $12 million in Los Despoblados geothermal project by Geotermia Andina in San Juan province in Argentina.

The world’s largest gold mining company, Barrick Gold Corp. is looking to geothermal to supply power to its gold mine at Veladero in Argentina.

In October 2012, the company signed a Letter of Intent with Geotermia Andina on the development of the Los Despoblados geothermal power project in San Juan, Argentina, as previously reported on ThinkGeoEnergy.

Currently about 30 million liters of fuel are transported annually to the mining operations at Veladero providing a power generation capacity of about 12.5 MW.

Now the company invests up to $12 million into the project. About $2 million will be invested in the initial exploration phase, involving the drilling of gradient holes. Additional $10 million will then be invested in exploration wells that will be drilled to a depth of 1,000-1,500 meters.

The project partners, local utility EPSE (Energia Provincial Sociedad de Estado) and Geotermia Andina.

The initial work funded by Barrick will then determine if the resource is sufficient to build a geothermal power plant, in which Barrick would then hold a 70% stake. The estimate for the project expect a size of between 8 and 14 MW. The low end of 8 MW would cover about two thirds of the electricity demand and reduce the diesel fuel consumption by 19.2 million liters annually.

If one would assume that a liter of diesel costs $1, than Barrick could recoup its $12 million investment in less than a year, quite a dream scenario. A similar project at a gold mine on Lihir Island in Papua New Guinea, proves that this is a win-win scenario for both the development of the plant, but in particular the economics and environmental credentials for any mining operation.

The decision on wether to go forward with the project will follow after the initial phases at the earliest next year. The plan could then be operational in 2014. (realistically though I would assume a little later than that)

Source: Justmeans