Generating a plan for power

Posted: Wednesday, January 12, 2005

Northern Dynasty Minerals Ltd. and Homer Electric Association have launched a detailed study of a power development plan for the Pebble gold-copper-molybdenum deposit north of Lake Iliamna.

The two companies had indicated last month that a study was in the offing. In a press release Tuesday, they announced the formal agreement to jointly assess the technical, economic and environmental feasibility of a phased development approach to delivery of electrical energy to build and operate the mine at Pebble.

According to the companies, the phased approach contemplates an efficient startup and the possibility of ramping up mine production to a milling rate of 200,000 tons per day. The energy review will become part of an overall feasibility study of the Pebble Project that NDM expects to complete later this year.

The power development plan now under study consists of two stages, the company said.

The first would connect the mine to the Railbelt electrical grid, either by 210 miles over overland transmission line or 45 miles of submarine cable across Cook Inlet linking to 70 miles of overland cable to the Pebble site, the company said. A possible benefit of the line would be access to electrical energy for area villages and other consumers along the route. Northern Dynasty and HEA say they plan discussions with local communities.

The second stage could entail HEA building additional generating facilities. HEA spokesperson Joe Gallagher said Tuesday that the cooperative expected to spend about $90,000 on the power development study and hoped to have it completed by the end of the first quarter this year, or around April 1.

As to whether HEA will need to construct new generating facilities, Gallagher said that would depend on what the study indicates the current capacity can deliver. HEA's current customer demand is 65 megawatts, though it has delivered as much as 93 megawatts.

"If 200 megawatts is required for mine operations, some new capacity most likely would be required," Gallagher said. "As to what form that would take and where it might be located, we don't have the answers to that yet."

Gallagher did say that energy from coal, oil, natural gas and Bradley Lake Hydroelectric Dam would all be considered as possible sources of more electricity.

Homer Electric Association is one of six cooperatives serving the Alaska Railbelt grid. HEA currently has some 20,000 members and supplies electricity to 28,000 meters, including to heavy industry, towns, rural areas and remote villages covering 3,166 square miles.

Northern Dynasty anticipates a large-scale, open-pit mining operation at the Pebble site. Last November, the company said it was studying three production rate scenarios: 100,000 tons per day, 100,000 tons per day ramping to 200,000 tons per day in year six, and 200,000 tons per day. Electrical demand would rise with production rates.

Currently, NDM is conducting a comprehensive drilling operation at the Pebble site and engaging in engineering and environmental-socioeconomic work that will help complete the overall feasibility study in 2005.

According to NDM, "continuing studies indicate that the Pebble resource is large enough to potentially utilize the largest, most cost-effective and efficient grinding equipment currently available," the company said. "Consequently, one of the prime alternatives under investigation is an ultimate production rate of up to 200,000 tons per day (70 million tons per year)."

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