11/06/2009 - 00:00

Newmont, TransAlta at odds over power

11/06/2009 - 00:00

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INTERNATIONAL gold mining company Newmont is set to become an electricity retailer in Western Australia in its own right, despite objections by one of its joint venture partners, TransAlta Energy.

Newmont, TransAlta at odds over power

INTERNATIONAL gold mining company Newmont is set to become an electricity retailer in Western Australia in its own right, despite objections by one of its joint venture partners, TransAlta Energy.

The Economic Regulation Authority last Friday granted Newmont AP Power an electricity retail licence to supply "large use" commercial and industrial customers in the South West Interconnected System.

It granted the licence despite objections from the Australian subsidiaries of Canadian energy company TransAlta Corporation.

Newmont and TransAlta are the joint owners of Goldfields Power Pty Ltd, which owns and operates the 110-megawatt Parkeston power station in Kalgoorlie.

Parkeston's major customer is another Newmont entity, Newmont Power Pty Ltd, which on-sells power to Kalgoorlie Consolidated Gold Mines.

KCGM, in turn, operates the famous Super Pit gold mine under the joint ownership of Newmont and Barrick Gold.

In its submission to the ERA, TransAlta Energy (Australia) noted that Goldfields Power supplies electricity to Newmont Power under a confidential power purchase agreement.

"The (agreement) imposes on (Newmont Power) clear obligations of exclusivity in relation to this electricity supply," TransAlta's submission stated.

"TransAlta is concerned that if the ERA grants the licence to Newmont AP, it will lead to a breach of the (agreement) by (Newmont Power).

"This will have negative impacts on TransAlta's business in the region"

TransAlta argued that granting the licence would, therefore, be contrary to the public interest.

TransAlta general manager Aron Willis declined to elaborate on the company's submission.

However, it implies Newmont Power is looking to purchase electricity from an alternative supplier.

A second objection was lodged by TransAlta's wholly owned subsidiary, Southern Cross Energy, which operates four power stations in the Goldfields region with a combined capacity of 245 megawatts. The details of this submission remain confidential.

In a written ruling, ERA chairman Lyndon Rowe noted the two objections but concluded that approval of Newmont AP's retail licence would not be contrary to the public interest. The ERA did not elaborate.

Newmont's Australian assets include the Tanami and Jundee gold mines, its interest in KCGM, and its Boddington gold mine, currently under development.

In 2006, Boddington signed a long-term agreement with Rick Stowe's Griffin Energy to buy about150MW megawatts of power each year.

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