Dual-listed Danakali has announced that Colluli Mining Share Company (CMSC) has appointed Aggreko as its preferred power supply contractor for a 12 MW heavy fuel oil (HFO) power plant at the Colluli sulphate of potash project in Eritrea.
A 12.36 MW thermal HFO solution was chosen as the most effective option for Module 1.
Aggreko will provide the funding for the power solution, which Danakali says provides certainty over the delivery of this preferred solution.
Aggreko will also provide the full scope of support services for the supply, commissioning and maintenance of the power plant and then transfer it to CMSC.
The costs of the power solution provided by Aggreko over the five-year contract period is lower than those set out in the front-end engineering design study, Danakali points out.
The agreement with Aggreko is subject to the conclusion of ongoing negotiations to optimise the scope of works, contract pricing and execution; and board approval of the final investment decision.
"We are very pleased to announce the appointment of Aggreko as our single power provider. With 55 years of experience in delivering high-quality, reliable service to a large number of projects we are confident they have the capabilities to provide our power needs for Colluli.
"At the early stages of the project development, the HFO solution will provide us with flexibility and reliability, and as confirmed by the Solar Energy Industries Association, Colluli will have a relatively small impact on the environment.
"Going forward, once project development is in more of a steady state, we will look to diversify our energy sources towards renewables available in the Danakil region, as per our commitment to sustainable and environment-friendly solutions,” says Danakali CEO Niels Wage.