Tuesday, October 11, 2011

Olympic Dam up, CopperString down

The proposed expansion of BHP's Olympic Dam project has now received environmental approvals. The sheer size of the project beggars imagination. I just wanted to record the link for later reference and discussion.

While Olympic Dam is up, CopperString is down. Ever heard of it?  I actually hadn't.

In the period immediately after the Australian Federal elections when independent MP Bob Katter was spruking the idea of a North Queensland energy corridor, I took the whole thing with a grain of salt. Turns out I was wrong, there was a little more to it than that.

On 3 September this year on Crikey, Bernard Keane and Wendy Bacon in Bob Katter, energy corridors and conflicts of interest got their knickers into a real twist over the whole project. It turns out that the energy corridor, map below, had more substance than I realised.

Well, Bernard and Wendy need not have worried. The project's viability heavily depended on a decision by Mt Isa Mines as to electricity sourcing.

Xstrata had been mulling three strategies to ensure future energy supply for its Mt Isa mining operations: the extension of the current sole supplier, the gas-fired Mica power station (an idea it dumped a while ago); go for another gas-fired station; or participate in the CopperString project that would link Mt Isa with the grid at Townsville via a 1000km transmission line, and unlock a series of renewable energy projects, including wind, solar, biomass and geothermal found in between.

Now hopes of building one of Australia’s largest renewable energy hubs in north Queensland appear to have been dashed after Xstrata signed a deal with AGL Energy to build a gas-fired power station in Mt Isa.

There was something very Queensland about the whole thing, remember the Cape York Space Port?, but that doesn't make the idea wrong.

One of the really big problems now starting to emerge in Australia is the growing gap between structures and capital assets based on previous economics and those likely to hold in the future. But that's a matter for another post. 

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