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(Alliance News) - Australia's Resolute Mining Ltd has signed a power supply agreement for a new power station at the Syama gold mine in Mali, it said on Wednesday.
The agreement has been signed with FTSE 250 temporary power generation provider Aggreko PLC. The deal will see Resolute develop a new solar hybrid power station at Syama.
Resolute first announced the planned new plant at the end of November, when it announced heads of terms had been signed with Aggreko. The gold miner said the new plant will help reduce power costs by around 40%.
Resolute Chief Executive John Welborn said: "Aggreko is the right partner to support our power ambitions at Syama. I am delighted work has commenced and that we will deliver the power cost savings we have promised at Syama.
"A key component of our cost reduction strategies at Syama is the provision of lower cost power. We can now look forward to significantly lower energy costs, in line with our life-of-mine feasibility study expectations, as we focus on maximising the efficiencies of our new automated underground mine. Together, these initiatives, will allow us to deliver lower unit costs as well as providing an environmentally friendly, capital efficient expandable power solution for Syama."
Resolute expects the first phase of the power station to be completed in 2020. Stage two will depend on when the existing tailings storage facility at Syama is decommissioned, which is expected in 2023. The second part of new plant will be built on the site of the tailings facility.
Shares in Resolute were 5.4% higher on Wednesday morning in London at a price of 61.68 pence apiece. Aggreko was down 1.1% at 834.80p.
By George Collard; georgecollard@alliancenews.com
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