Genmin de-risks Baniaka iron ore operation with power supply agreement for renewable hydroelectricity
Genmin noted the power supply agreement pricing will be less than US10c per kilowatt hour – reflecting the lower cost of hydroelectricity.
Genmin’s (ASX: GEN) proposed Baniaka iron ore operation in West Africa’s Republic of Gabon has been de-risked further after the company revealed it had secured 20 years of renewable hydroelectricity for the operation.
A memorandum of understanding has been signed with Gabon’s state-owned facility Société de Patrimoine du Service Public de l’Eau Potable, de l’Energie Electrique et de l’Assainissement for the supply of 30 megawatts of renewable hydroelectricity from the Grand Poubara hydropower station.
The power will be supplied for up to 20 years, with Genmin noting the price reflects the generally lower cost of hydroelectricity generation at less than US$0.10 per kilowatt hour.
Under the current MoU, 30MW of power is guaranteed by Poubara, with the agreement also providing for this to increase up to 50MW.
Genmin will construct, own and operate a dedicated transmission line from Poubara to Baniaka which is 30km away.
Genmin managing director and chief executive officer Joe Ariti said the company had been committed to purchasing clean renewable energy from Poubara for Baniaka from the start.
“Our vision is to become Gabon’s first iron ore producer, and in doing so deliver high-grade, greener iron ore products to global markets – promoting reductions in Scope 1 and Scope 3 carbon emissions in iron making.”
Advancing Baniaka
Located in south-east Gabon, Baniaka covers 881 square kilometres and is Genmin’s flagship project.
The project hosts 12 major prospects of varying maturity and a pre-feasibility study is underway. The study is evaluating the economics of developing a bulk, open pit mining operation at Baniaka to produce 5 million tonnes a year of iron ore products. The study will also assess expanding this to 10Mtpa.
In January this year, Genmin revealed a third non-binding offtake MoU had been signed for Baniaka ore.
China’s second largest privately-owned iron and steel maker Jianlong has agreed to purchase 1.5Mtpa of fines from the project and a further 500,000tpa of lump.
This MoU is for two years.
All-up, the three MoU offtake agreements account for 6Mtpa of iron ore from Baniaka over two to three years.