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Alaska mine power options down to three Placer Dome tightens scope of power options for Donlin Creek mine; one on-site and two off-site options being considered Patricia Liles Petroleum News Contributing Writer
Placer Dome, operator of the remote Donlin Creek gold deposit in southwest Alaska, has narrowed its consideration of electric power options from 11 to three scenarios in its preparation of a pre-feasibility study for the large-scale mine project. Two off-site options and one on-site option to generate up to 70 megawatts of electric power needed for a large hard-rock mine at Donlin Creek are now being considered in more detail by Placer Dome, according to the company’s project manager, Gregg Bush. In a May 24 interview with Petroleum News, Bush said the company requested “expressions of interest” from local and international energy firms for options to provide power to the remote project. “We received very enthusiastic responses,” he said.
The on-site generation being considered is either a diesel or LPG-powered generation plant.
One of the off-site generation options involves building a transmission line connecting Donlin Creek to Alaska’s existing Railbelt power grid.
The third option being considered is building a coal-fired power plant at Bethel and building a transmission line up the Kuskokwim River, a scenario advocated by Calista, the region’s Native corporation.
After narrowing the focus of power options, Placer Dome requested specific cost details and the related scope of work needed in those top three considerations. Bush said the company requested that information be provided by Sept. 15, so it can be incorporated in Placer Dome’s pre-feasibility study for the Donlin Creek mine project. That study should be complete in late September or early October, Bush said.
On-site requires barging, lots of storage Electric power for the remote gold mine is a key obstacle for its successful development. Because Donlin Creek ore is associated with a sulfide material, extracting gold involves an autoclave process, which requires adding oxygen and heat to crushed ore. That ups the ante for power needs, with estimates of peak needs at 70 megawatts of power.
Installing and operating diesel generators to meet that power need would require about 30 million gallons of fuel each year, Bush said. That’s in addition to about 15 million gallons of diesel that would be used annually by the mine’s dirt moving equipment. The barge shipping season for the Kuskokwim River is about 122 days per summer, according to Placer Dome’s partner in the project, NovaGold Resources. In its previous analysis of the Donlin Creek project, NovaGold estimated that seven tug and barge deliveries per week would be required during the shipping season.
Bush said Placer Dome is leaning towards shipping LPG, or propane, to Donlin Creek for fuel to power on-site generation, rather than diesel. Propane requires lower-pressure storage and handling equipment, Bush said, and its cost is usually comparable to diesel. LPG has lower per unit power generation capability, so about 60 million gallons of LPG would be required, he said. “We’re looking at some underground storage,” Bush added. Transmission line from Railbelt One of the off-site generation options involves tying Donlin Creek into Alaska’s existing power grid that serves the Railbelt communities. “It would not necessarily have to connect in Nenana, but that would be the logical place to bring the line across the terrain,” Bush said. That tie-in access point at Nenana could keep the transmission line on the north side of the Alaska Range, eliminating a crossing point for the state’s central dividing line of mountains, Bush noted.
But power generation capacity on the Railbelt is already relatively tight, particularly in the northern portion of the state. A December 2003 report by the Alaska Energy Policy Task Force states that Railbelt energy studies predict electric power generation needs could grow 39 percent from 2008 through 2028. Deficiencies in generation capacity are projected in areas of the Railbelt other than on the Kenai Peninsula, the study said.
Power generation capacity in the Fairbanks area currently is 183 megawatts, according to the Interior’s electric supplier, Golden Valley Electric Association. Golden Valley plans to build another gas-fired power plant in North Pole, adding another 47 to 120 megawatts of power generation in the Interior by early 2006. It also produces 25 megawatts of coal-fired power in Healy, fed north by two transmission lines that run between Healy and Fairbanks.
Nenana is about halfway between Healy and Fairbanks. Golden Valley counts in its generation capacity 20 megawatts of power from the hydroelectric plant at Bradley Lake. That power is supplied to the Interior by the Alaska Intertie, which can carry 75 megawatts of power north from Willow to Healy, then to Fairbanks via one of the two northern transmission lines. Demand growing quickly Golden Valley set a new record for its peak demand of electricity this January: 192.9 megawatts. Electric demand in the Interior is expected to increase dramatically in the near future, even without Donlin Creek.
Large new consumers in Fairbanks such as Wal-Mart, Home Depot, Lowe’s and the expanded Westmark Fairbanks Hotel will bump the immediate draw of power. Another 30 megawatts of demand for Golden Valley power is expected in the near future from large-scale industrial projects and a residential increase in Fairbanks-area military personnel. Development of the national missile defense system at Fort Greeley, construction of the Pogo gold mine northeast of Delta Junction and electrification of some pump stations on the trans-Alaska pipeline system all are expected to increase Golden Valley’s demand. Calista favors coal-fired plant at Bethel The third power option Placer Dome is considering is some version of a coal-fired power plant in Bethel, advocated by the region’s Native corporation, Calista Corp. Calista’s non-profit subsidiary, Nuvista Light & Power, released a draft feasibility study this spring recommending construction of a 100-megawatt-plus power plant at Bethel, either on two barge structures or on land south of town.
A connecting 138-kV transmission line would be built from Bethel to Donlin Creek, an estimated 191 miles, to provide the mine with power. (See story in May 9 issue of Mining News.) Timing of that large-scale project, estimated to cost about $370 million, could provide a logistical hurdle, according to the Nuvista report.
“Realistically it will be difficult to construct (the coal-fired plant and transmission line) prior to 2010,” the tentative date for Donlin Creek’s mining start. Placer Dome has hired consultants to look at the Nuvista proposal, from the mine developer’s perspective, Bush said. “They are looking at what our cost and construction criteria are, separating our needs from those of the obvious community benefits from that study.”
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