PERTH (miningweekly.com) – Lithium developer Liontown Resources has tapped Zenith Energy for the supply of power to its Kathleen Valley project, in Western Australia.

The ASX-listed company has issued Zenith with a letter of award for the supply of power to Kathleen Valley for a period of 15 years, on a build-own-operate basis.

Zenith Energy will finance, design, construct, own, operate and maintain a 95 MW hybrid power station at Kathleen Valley, which is expected to coincide with process plant commissioning 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 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.

Once fully constructed, the hybrid power station is currently expected to have the largest off-grid renewable capacity of any mining project in Australia.

"Awarding the power supply contract is another important milestone for Liontown and the development of Kathleen Valley. We continue to deliver on our environmental, social and governance credentials by taking real action to reduce the project’s carbon emissions from the outset,” said Liontown MD and CEO Tony Ottaviano.

“We are delighted to partner with Zenith Energy, an experienced and highly competent power producer, following completion of a thorough competitive tender and commercial negotiation process. We believe Zenith Energy is an ideal partner to deliver an industry-leading hybrid power station to meet Liontown’s energy needs and requirements for a high-capacity renewable solution. When fully constructed, this hybrid power station will enable Liontown to exceed our target of achieving at least 60% renewable energy at poroject start-up and beyond.”

The letter of award allows Zenith Energy to commence 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.

The parties have also agreed to use their best efforts to finalise a binding power purchase agreement within 90 days of the date of the letter of award.

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.

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.

Liontown is fully funded for the construction of Kathleen Valley with a A$300-million debt facility with automotive major Ford, and following a A$463-million capital raise at the end of last year.