Hot on the heels of awarding its power plant contract for Coburn, Strandline Resources (ASX: STA) has appointed Woodside-EDL joint venture to supply LNG to the project’s hybrid plant.
Yesterday, Strandline revealed it had chosen Contract Power to build its proposed 32MW hybrid power plant that would operate using a mixture of gas and renewable energy to power mining at the Coburn mineral sands project in WA’s north.
The company followed up the news this morning with the selection of Woodside-EDL JV to supply trucked LNG to the hybrid plant over 10 years.
Woodside-EDL JV is a joint venture comprising Woodside Petroleum’s (ASX: WPL) subsidiary Woodside Energy and EDL LNG Fuel to Power.
According to Strandline, the joint venture provides Strandline with a long-term clean, reliable and affordable fuel solution for Coburn.
Woodside-EDL JV proposes to truck LNG via road train from Woodside’s Pluto LNG truck loading facility near Karratha.
Strandline noted the LNG contract enables it to source power for the project at less than the cost outlined in the definitive feasibility study that was released earlier this year.
The contract has also allowed for appropriate pricing review and adjustment mechanisms over the period.
Final contract terms will be ironed out to the satisfaction of both parties and Strandline’s lenders for Coburn’s development.
Strandline managing director Luke Graham said the contract establishes a long-term relationship between the company and two leaders in the energy sector.
“The company continues to move rapidly towards development of Coburn and these key contract appointments to well-credentialed suppliers provide delivery certainty,” he added.
Strandline’s Coburn is 240km north of Geraldton and hosts 29 million tonnes of contained heavy minerals in resources.
The updated definitive feasibility study released in June indicates development capital of $260 million is required to bring the project online where it is predicted to generate annual earnings before interest tax depreciation and amortisation of $104 million.
Life of mine is estimated at 22.5 years, with $2.3 billion forecast in total EBITDA over this period.
Underpinning this will be annual production of 222,000t of heavy minerals comprising 34,000t of premium zircon, 54,000t of zircon concentrate, 110,000t of ilmenite and 24,000t of rutile.