Hillgrove Resources is set to transform its Kanmantoo open pit mine into a pumped hydro facility in the Adelaide Hills region of South Australia.

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Kanmantoo open pit mine gets a new lease of life as a pumped hydro facility

Mining at Kanmantoo, whose mine life was extended from 2016 to 2019 nearly five years ago, is now winding down.

The copper mine was in operation from 1970 until 1976, but work by Hillgrove since 2004 has proved up an additional indicated and inferred mineral resource of 34.5 million tonnes grading 0.6 per cent copper and 0.1 grams of gold a tonne.

Earlier this year, Hillgrove entered into binding agreements to sell the right to develop, own and operate the Pumped Hydro Energy Storage (PHES) project at its Kanmantoo mine to AGL Energy Limited for AU$31 million.

The PHES project is expected to have generating capacity of 250MW and eight hours of storage, making it the largest storage capacity in South Australia.

The South Australian Minister for Energy and Mining, Dan van Holst Pellekaan sees this as an exciting pumped hydro project aligned with the Marshall Government’s policy of matching storage capacity with renewable energy resources to deliver cheaper, more reliable and cleaner electricity for South Australian households and businesses.

“I congratulate Hillgrove Resources and AGL for their agreement and look forward to the project developing in coming months and years,” said Mr van Holst Pellekaan.

In 2017 Hillgrove commenced investigating the merits of a PHES project at the Kanmantoo site. The rationale for the project was then and remains to be the fundamental changes occurring in the National Electricity Market (NEM), including the withdrawal of coal fired generation; significant increases in gas costs impacting the cost of gas-fired generation and the significant increases in the development of intermittent renewable generation, both wind and solar.

Consequently, cost effective storage was required in the NEM and in South Australia to deal with volatility in electricity prices and the reliability of supply.

Steven McClare, Managing Director Hillgrove, said the Company was delighted to work with AGL on the delivery of this project.

“This will transform a former mining site into one of the lowest cost electricity storage projects in Australia, at a time when synchronous generation and bulk storage is critically needed. Although the progression of the PHES will prevent long term mining of the portion of the underground exploration target directly beneath the existing pit, the Board determined the AGL PHES offer represented a lower risk and higher value proposition to shareholders,” commented Mr McClare.

*Article published in the July-September 2019 issue of The Asia Miner

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