Oyu Tolgoi Power Plant

Giles Parkinson writes about Rio Tinto starting to build solar power for their remotely located mining operations. They seem to plan a small 6.7 MW solar project at a place called Weipa in Queensland, Australia. There the solar will displace electricity generation with diesel generators.

As the article notes, it makes sense to get rid of the need to transport fuel over long distances. One of the people involved said:

“Transporting fuel long distances for generators is dangerous and subject to variable weather conditions – it is a costly, unpredictable arrangement that doesn’t make good economic sense.”

I was interested in this development since I have called for using solar power instead of coal at the Oyu Tolgoi copper and gold mine project in Mongolia since 2011.

So I checked what has been decided about this coal power plant project. The last information I could find says that the decision is still open. The “technical report” prepared in March 2013 says that Turquoise Hill is weighing their options, one of them being building a coal power plant themselves. And in their yearly report published in March 2014, they report an increased estimate of $0.89 per pound of copper, with the reason for that increase that the estimate now incorporates buying power from third parties. That of course means that for the very least plans to build their own coal plant are not yet final.

In contrast, in 2011 they published a detailed plan for such a coal plant, which said on page 40 that the power plant was expected to start delivering electricity in September 2013. Those plans don’t seem to have worked out.

Also, Bloomberg reported in March 2013 that now the idea was to locate a coal at the Tavan Tolgoi coal mine site, which makes sense, since it is easier to transport the electricity from there to Oyu Tolgoi than to transport the coal the other way.

Anyway, these delays are most welcome. They may very well be an interesting opening for installing something like the 6.7 MW project in Weipa at Oyu Tolgoi as well.