HISTORICALLY, diesel, natural gas and grid electricity have powered mining operations in WA, but the demand for LNG is growing fast and for good reason.
EVOL LNG has been supplying liquefied natural gas (LNG) to fuel remote mines in WA since 2008.
Its trucked LNG offering has become the preferred choice for remote mines that are located within 1000km of its Kwinana LNG plant, yet don’t have the power demand or mine life to underpin construction of a gas pipeline or powerlines.
LNG offers significant cost savings and emission benefits compared to diesel, and is less capital intensive and less contractually onerous than lengthy gas pipelines or powerlines.
Diesel-fuelled mining operations have been fully exposed to the volatile international oil price (rising from US$27/bbl in 2016 to US$86/bbl in 2018) and the Australian dollar exchange rate, making energy and mining costs extremely difficult to forecast.
In contrast, LNG contracts are typically escalated with CPI, which has risen just 2.5pc over the same period, and with the diesel price above 75 cents per litre (after rebate), LNG-fuelled mine sites are saving up to 30pc on their fuel costs.
If greenhouse gas emission regulations are introduced, this would be another factor to strengthen the case for LNG, which has 25pc lower carbon emissions compared to diesel. LNG can also be neatly paired with renewables in hybrid power stations to deliver even better environmental performance.
EVOL LNG’s longest-standing customer, Darlot gold mine, has benefited from fuel savings of more than $24m compared to diesel over the past 10 years.
Other existing LNG powered mines in the Goldfields and Mid West include Carosue Dam, Daisy-Milano, Mt Marion, Deflector and Dalgaranga.
As a locally produced fuel, compared to imported diesel, the use of LNG in the mining sector is reducing operating costs, cutting emissions, creating jobs and supporting the local economy.
It’s a win-win for WA and the environment.
