A Canadian based-senior gold mining company, with a portfolio encompassing projects in the U.S, Brazil and Russia, has announced the acquisition of two power plants to secure long-term, low-cost power for its Brazilian operation.
Kinross Gold Corporation has agreed to acquire two hydroelectric power plants in Brazil for a total of $257 million. The plants will be used to supply power to the companies Paracutu mine, significantly lowering production costs.
The acquisition is expected to allow Kinross to significantly lower operating costs at Paracatu by eliminating approximately 70% of future power purchases. In addition, Brazilian legislation provides reduced power tariffs to companies that generate their own power supply.
Both plants expected to supply approximately 70% of Paracatu’s future power needs. The remaining 30% of Paracatu’s power demand is expected to continue to be fulfilled by third party suppliers under fixed term power purchase agreements. The operating concessions for both plants expire in 2037, five years after Paracatu’s mine life is expected to end.
Paracatu is an open-pit mine and is expected to process approximately 55 million tonnes of ore per year, and is the largest gold mine in Brazil and amongst some of the largest in the world.