Landmark power supply contract for Karara

Gindalbie Metals subsidiary, Karara Energy has finalised a long-term powe...

  Gindalbie Metals subsidiary, Karara Energy has finalised a long-term power purchase contract with Western Australian electricity utility Verve Energy, which will underpin the supply of power to the Karara Iron Ore Project in Western Australia’s Mid West region.Western Australian Minister for Energy, Francis Logan has granted Ministerial Approval for the contract, which is a key ingredient in the development and future operation of the Karara Project. The project is being developed through a joint venture company, owned equally by Gindalbie and leading Chinese iron and steel company AnSteel.The contract provides price certainty for the consumption of up to about one million megawatt-hours (MWh) per annum of base load power over an initial 15-year period, which is sufficient to meet the power requirements of the Karara Iron Ore Project.Gindalbie’s Managing Director, Garret Dixon said the finalisation of the contract between Karara Energy and Verve Energy represented a further important milestone in the development of the Mid-West’s iron ore resources. “It locks in a secure and reliable long-term source of power, which will underpin the Karara Iron Ore Project,” Mr Dixon said.“Power is one of the Project’s largest operating costs. The Gindalbie Board, and our Joint Venture partner AnSteel, are convinced that this power supply agreement with Karara Energy represents by far the best option for this project and delivers significant benefits over the long term,” he said. Verve Energy’s Managing Director, Shirley In’t Veld also welcomed the completion of the mutually beneficial contract.Mr Dixon said the Karara Joint Venture was pleased to be working collaboratively with the Western Australian Government in the development of new infrastructure for the Mid-West region.“The establishment of Karara Energy and the agreement to source power from Verve Energy will guarantee a baseload customer to underpin the new power infrastructure required to service the many projects already underway in the Mid-West region,” Mr Dixon said. Gindalbie and AnSteel recently completed a Bankable Feasibility Study (BFS) for the Karara Iron Ore Project, which includes the mining and processing of the 1.43 billion tonne Karara magnetite deposit and mining and transportation of the 27.1 million tonne Mungada Hematite resource. The power supply contract secures a key input to the Karara Iron Ore Project, which has an initial production profile of 8mt/annum of high-grade concentrate and pellets together with 3mt/annum of hematite lump and fines.