Burnstone power supply secured

I-Net Bridge | Mon, 08 Jun 2009 15:29
[miningmx.com] -- Eskom has undertaken to supply power to Great Basin Gold's Burnstone mine project, relieving an ongoing concern to the company and its investors.

Great Basin said the two parties acknowledged the strategic importance of the project to the development in the Dipalaseng Municipality in Mpumalanga, where it is developing a shallow, long-life mine at a cost of R2bn over the 19-year life of the project.

The company has accepted a R119m rand official budget quotation for a new supply of power to the Burnstone Mine, said Great Basin.

This quotation outlines the project for the supply of power to Burnstone, which will be completed in time for the commissioning of the metallurgical process plant that is currently under construction.

Eskom's 2008 announcement, outlining a backlog in keeping up with the national power demand, and its subsequent drastic power conservation scheme came at the time when the Burnstone project had entered mid-stage construction.

"Eskom pledged support to the project after Great Basin Gold engaged with the utility on the matter as part of its risk mitigation strategy," the company said in a statement to the JSE.

The power utility committed to Burnstone's phased power demand requirements, subject to the terms of the budget quotation, which involves the refurbishment of an existing line, and construction of a new section of a power line to Burnstone.

This process is jointly managed by the two parties to coincide with project completion.

"Eskom's support to Burnstone is of strategic importance to allow the project to be developed to its planned production levels," Great Basin said.

In combination with the approval of the Burnstone mining right and environmental management programme in October 2008, the project now has the key elements in place for project development.

"We are pleased by Eskom's support and welcome their positive attitude towards a project that will see the first new gold mine in South Africa in many years," said Great Basin president and CEO Ferdi Dippenaar.

"Securing sufficient permanent power supply to the Burnstone Mine has been an ongoing concern to the company and its investors. In addition to the supply to the mine, Eskom has planned to upgrade the regional infrastructure which will bring economic development and wealth to a community with high levels of poverty and unemployment," Dippenaar said.