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Negotiations to construct power line worth N$100m underway

Mon, 9 February 2015 06:49
by Charmaine Ngatjiheue
Business




Craton Mining & Exploration is now negotiating with NamPower for a power line worth N$100 million to its proposed Omitiomire copper oxide mine project near Hochveld in the Khomas region.
The intention is to build a 132 kV overhead power line which will run in a northerly direction towards Omitiomire from a T-off on the Auas-Gobabis power line.  
Chief Operating Officer (COO) of Craton, Andre Genis said in addition to the 70km power line, electrical substations at both the T-off from the Auas-Gobabis power line and at the proposed Omitiomire mine will be required, adding that the power line is needed as there is no bulk power in the area, only a rural distribution network which has no spare capacity.
It could, in future, be used to amplify the current power supplies in the area and could also provide for other future development in that area.
“The power line route is still under negotiation by NamPower and the selection of the final route is subject to an environmental impact assessment (EIA), including a public participation process,” said Genis.  
 Genis added that Craton is also investigating the upgrading of the most suitable access road to the proposed mine as good road conditions are a concern as much to it as to other road-users.
There was an intention to upgrade sections of the current most suitable access road to a standard that can better survive in the rainy season, and Genis added that they are also considering a diversion of the M53 road around the mine, which will also require an EIA. However, the existing road will not be obstructed until the local diversion has been completed.
Genis further noted that it is unlikely that the construction of the Omitiomire mine will start before the end of 2015.

“An appeal has been lodged against the Environmental Commissioner for the issuing of the environmental clearance certificate and the long-term access to the Omitiomire farm still needs to be finalised. We have made an offer to buy the farm and are still awaiting a response,” he noted.
The mining licence for the Omitiomire copper oxide mine was issued in September 2014 and it is located about 140 km northeast of Windhoek. It will be a modest‐sized operation focusing on the near surface oxidised copper ore. The mine needs an investment of N$440 million for the construction and development.
The project recently received its mining license valid for 20 years that is applicable for the initial phase of the project from the Ministry of Mines and Energy and also received its Environmental Clearance Certificate from the Ministry of Environment and Tourism.
The construction of the copper oxide phase was expected to kick off late 2015 into early 2016 as funding and the Omitiomire farm being an estate needs to be finalised.
Craton was formed in 2007; it is the Namibian subsidiary of International Base Metals Limited (IBML) of Australia. It holds the Exclusive Prospecting Licence No 3589 (EPL 3589) for the area containing the Omitiomire copper deposit, which contains a total of some 700 000 tons of copper in the resource.
Thus far, Craton has spent more than N$200-million in Namibia on salaries, training and services with concomitant improvements of skills and living standards of the work force.
Craton intends to mine the oxidised copper resource to a depth of 50 meters. The three pits to be mined, would feed a 40 000 tonne per month ore processing plant. The mine will produce a total of 25 570 tonnes of copper over a mining life of about seven years.  
It also has seven exploration licenses in areas such as Kamanjab and south of Rehoboth and to add on, the mother company, IBML, through its wholly‐owned subsidiary, Tandem Resources, has an exploration joint venture with a subsidiary of African Mining Capital on Epembe, north of Opuwo in the Kunene Region, prospecting for tantalum and niobium.

N$40m spent thus far on feasibility studies for Solar Hybrid Power Plant

Arandis Power (Pty) Ltd has spent approximately N$40 million on feasibility studies for the N$3 billion Hybrid Power Plant project, Managing Director, Ezio Vernetti confirmed.
The Hybrid power plant project declared generation capacity will be 120MW and this will be achieved with 8 Heavy Fuel Oil powered engines manufactured by Wartslia of Finland and by a ninth “solar PV engine” of 50MW peak output.
Vernetti said this amounts to approximately 20% of Namibia’s current energy requirement.
Vernetti added that all the bankable feasibility studies have been carried out and demonstrate that the project is fully feasible and bankable.
“Arandis Power has secured 100% of the funding for the project and has obtained full Environmental Clearance and is in possession of a Generation Licence,” added Vernetti.
Although the construction of the project was supposed to commence before the end of 2014, it has not started because NamPower has temporarily suspended negotiations with Arandis Power on the Power Purchase Agreement (PPA). The construction was expected to be completed in about 22 months.
This was due to NamPower being in need of time to complete its tender award on the 250MW thermal project.
Vernetti added that in that tender, the company Xaris Energy was selected by NamPower as the Preferred Bidder and Arandis Power is the Reserve Bidder.
However, Arandis Power is urging NamPower to carry out parallel negotiations with the company on the 120MW project while deliberations are taking place on the 250MW initiative.
“Delays are exclusively connected to the NamPower 250MW tender as indicated above,” said Vernetti.
Vernetti further noted that Arandis Power’s “Golden Goal” has always been to find the most cost-effective and most sustainable way to reduce the cost of power generation over the 25-year PPA lifespan.
“In thermal power generation (coal, gas, heavy fuel oil, diesel), approximately 80% of the cost of electricity comes from the cost of fuel. Arandis Power’s “Golden Goal” is not technology driven but outcome driven; we want to reduce the cost of fuel in power generation,” said Vernetti.
Namibia does not yet have any indigenous hydrocarbon fuel, and Kudu gas is still not available. Arandis Power analysed therefore the most cost effective source of fuel for power generation in Namibia is HFO (heavy fuel oil) which is a residual (left over) fuel from the oil distillation process as opposed to an expensive distillate (or refined) fuel such as diesel or petrol. Vernetti further noted that the HFO fuel supply chain can be implemented effectively in Namibia at competitive and cost-effective levels as opposed to a complex and expensive LNG (liquid natural gas) supply chain which require large power plants as off takers (ideally above 500MW).
The uniqueness of the Arandis Power hybrid power plant is that it associates in one fully integrated system, an HFO thermal generation capability with a powerful solar PV capability.
“We wish to use the solar PV instrument exclusively as a fuel saving mechanism for its HFO driven power station. This hybrid system has been tried and tested in many small scale power plant dedicated especially to mines in South Africa and Australia, but never before at a utility scale; Namibia would the first project in the world of this size,” said Vernetti.  The system would save NamPower roughly between N$150 million and N$200 million per year on fuel purchases just by using Namibia’s most abundant energy source which is the sun.
“A further originality is that while the solar fuel saving component saves fuel during the day, the thermal HFO component assures a stable electricity output and a 24/7 generation capability which renewables such as wind and conventional PV cannot offer. This is very important when considering Namibia’s industrializing drive and economic development objectives also advocated in Vision 2030,” added Vernetti.
This power plant will be a first in Africa on such a large utility scale, the merger of photovoltaic (PV) electrical generation and traditional thermal heavy fuel oil generation offers manifold advantages to the national grid and to the end consumer.
The power plant is expected to create 65 new permanent jobs in Arandis but will employ over 600 people during the 22 month construction period.