PERTH (miningweekly.com) – Lithium developer Liontown Resources has struck a binding power purchase agreement with independent power producer Zenith Energy to supply electricity to the Kathleen Valley project, in Western Australia.

Zenith Energy will finance, design, construct, own, operate and maintain a 95 MW hybrid power station at Kathleen Valley for an initial term of 15 years from commercial operation of the hybrid power station, which is expected to coincide with the commissioning of the process plant in the first half of 2024.

The hybrid power station will include wind generation from five wind turbines each capable of generating 6 MW. A 16 MWp fixed axis solar photovoltaic (PV) array coupled to a 17 MW/19 MWh battery energy storage system (BESS) will provide additional clean energy, supported by highly reliable synchronous condensers that provide critical system stability and resilience. The thermal power component will comprise 27 MW of gas generation and 5 MW of diesel standby generation.

“Finalising the power purchase agreement marks another important milestone for Liontown and the development of Kathleen Valley, paving the way for the construction of one of the largest off-grid wind-solar-battery storage facilities of its kind in the Australian resource sector. This reflects our unwavering commitment to delivering on our environmental and social governance (ESG) credentials and establishing industry-leading carbon emissions from the outset,” said Liontown MD and CEO Tony Ottaviano.

Zenith Energy has progressed the necessary planning, legal, engineering and design works, as well as placing orders for long lead items, each of which is required to facilitate the delivery of the hybrid power station in line with the Kathleen Valley project schedule.

Meanwhile, Liontown has secured approval for a A$25-million guarantee facility from Export Finance Australia (EFA) as part of the security package under the power purchase agreement, which will underpin the timely construction of the hybrid power station at Kathleen Valley. Provision of the facility is subject to a number of conditions which are customary for facilities of this nature, and finalisation of facility agreements.

“Zenith Energy’s commitment to deliver a high-capacity hybrid power solution includes incentives to produce renewable power over thermal power and, together with a renewable energy guarantee, sets us up to meet our renewable energy target of 60% at start-up.

“Securing the A$25-million guarantee from EFA assists to reinforce Liontown’s position as a new globally significant producer and exporter of lithium integral to the transition to a low-carbon future,” said Ottaviano.

The 2.5-million-tonne-a-year Kathleen Valley operation will produce 500 000 t/y of spodumene concentrate, and in year six of operations, Liontown would look to increase he project capacity to 4-million tonnes a year, delivering 700 000 t/y of spodumene concentrate, within six years.

Based on this production scenario, the Kathleen Valley operation is expected to have a mine life of 23 years, and will generate life-of-mine free cash flows of A$12.2-billion.