Progress on goethermal power projects in South Australia has been disappointingly slow, however Petratherm continue to plug away trying to generate interest in a renewable energy precinct supplying power to Olympic Dam and adjoining mine sites. Recharge News reports - Geothermal group spells out green vision for South Australia.

Petratherm claims new tests reveal that wind and solar could play a big part in its vision of a 600MW Clean Energy Precinct in the north of the Australian state.

Assessments from consultancy Garrad Hassan Pacific reveal wind speeds of up to 8 metres per second at a height of 100 metres – offering the potential to host a 300MW wind farm – and a solar resource of 20 mega-joules per sq metre daily.

Adelaide-based Petratherm expects to complete the first 300MW stage of the project based on wind and gas generation. The second stage would see the deployment of large-scale geothermal energy from Petratherm’s ongoing South Australian Paralana project, supplemented by solar. The total cost of the project – located 300km northeast of Port Augusta – is estimated to be A$1.5bn ($1.57bn).

Petratherm says it is in discussions with key investors locally and overseas over potential technology and joint-venture partnerships. “It’s still early days for the precinct, but we remain firmly on track to combine new power generation facilities across gas, wind, solar and geothermal to eventually produce 600MW of reliable, competitively-priced electricity to meet anticipated demand from large mining developments in SA,” says Petratherm managing director Terry Kallis.

Petratherm sees robust demand growth from very large mines 270km east of the proposed site of the Clean Energy Precinct, including BHP Billiton’s Olympic Dam – eventually tipped to be the biggest in the world – and OZ Mineral’s Prominent Hill and Carapateena mines. Between them they are estimated to have a total potential demand in excess of 700MW.

Giles Parkinson at The Climate Spectator has a look at geothermal energy company Petratherm’s proposal for a renewable energy complex to power BHP’s Olympic Dam mine (the world’s largest if / when the expansion project is completed) - Cheap and green energy for miners.

It may seem somewhat audacious for a company with a market value of $16 million to propose a world-leading energy project nearly one hundred times its value. But, says Petratherm managing director Terry Kallis, if you don’t dream, you don’t get. And he just happens to think he’s sitting on a unique opportunity.

Kallis, on Wednesday, outlined his vision for a $1.5 billion clean energy precinct in the outback of South Australia that would take advantage of the unique combination of geothermal, solar and wind energy resources, the intersection of major gas pipelines, and the proximity of the world’s largest mine and other major developments.

The big opportunity is, of course, to service the massive energy demands of BHP Billiton’s proposed Olympic Dam expansion – which could be more than 700MW at that site alone – as well as other mine proposals or expansions such as Prominent Hill and Carrapateena. Mine managers do not normally think along the lines that Kallis has proposed – they will simply build a new transmission line if a connection is close enough, or build enough gas or diesel to ensure the operations keep going 24/7.

However, BHP Billiton have shown that they are willing to consider all options. As we reported in May, the world’s biggest mining company is effectively hedging its bets around the supply of energy and, after conducting a detailed analysis, is willing to concede that geothermal and solar power have the potential to offer the cheapest form of emissions reductions by the end of the decade, if not earlier, and the cheapest form of energy.

Kallis’ idea is to show BHP the path to get there, and to keep their options open as long as possible, so that they can take advantage of the opportunities when the new technologies are bankable, and can deliver at the costs anticipated. Kallis, of course, has great interest in this, because his company proposes to supply the geothermal energy – and Olympic Dam is too good an opportunity to let slide. "We want to make sure we don’t lose the opportunity to get geothermal into that market," he says.

Kallis proposes to create a clean energy precinct on the Moolawatana cattle station around 50km north of Petratherm’s Paralana geothermal prospect, and just over 200km from Olympic Dam. The plan calls for an initial 300MW of capacity – mostly gas sourcing fuel from the passing Moomba-Adelaide gas pipeline, and wind – and have that ready by 2016, around the time Olympic Dam would need it. The wind resource is not officially documented, but the cattle station’s name comes from the local indigenous word for “windy place", so Kallis expects that should not be a problem.

The idea is then to add another 300MW or so of geothermal and solar energy as those technologies mature by the end of the decade, and around the time Olympic Dam would be contemplating its next stage of expansion. The mixture of those four energy sources should provide the miner with the confidence of a secure supply. Kallis says they will be able to deliver attractive hybrid products that lower electricity costs and improve reliability, while also reducing carbon emissions.

Kallis has aligned himself with some unnamed parties – presumably gas, transmission and technology people – and plans to open formal talks with BHP with the view to obtaining a power purchase agreement. Failing that, they will talk to the local utility. Petratherm is, of course, in no position to fund this project, but as it has done by bringing in TruEnergy and Beach Petroleum to partner in its geothermal development, Kallis anticipates there will be no shortage of potential partners.

Of course, Kallis is not the only one to dream of creating a new energy precinct based around the needs of a large mining operation. The so-called “green grid" proposal to unlock huge wind resources in South Australia’s Eyre Peninsula is still awaiting the opportunity to proceed and will rely mostly on an upgraded connection to the eastern seaboard and the Copperstring project in Queensland, a project that was noisily supported by local member Bob Katter and hoped to link Townsville and Mt Isa and open up a string of renewable energy plays in wind, solar and biomass along the way.

However, such was the length of the transmission line that the fate of Cooperstring rested on the support of a single end user in Mt Isa, in this case Xstrata. Despite support from the Queensland state government, the Swiss-based Xstrata board plumped for the easy, not necessarily cheaper, option of a gas fired power station, and Copperstring is now dead. BHP, at least, is alert to the options, and as the country's biggest company with the world's biggest mine, would be aware of strong signal it would send to the broader economy.

The SMH has an article on the rare earth potential embedded within BHP's Olympic Dam mine - Let's not waste a rare earth opportunity.

Over the past two decades, China has dominated global production and satisfied 90 per cent or more of global demand. But recently, China announced that it would severely restrict its exports of REEs due to rising problems with its mines. There is evidence of polluted waterways and radiation exposure affecting not only workers, but entire communities.

The minerals which contain REEs invariably contain some thorium and uranium, both radioactive elements. It’s not the sort of stuff you want to manage poorly, as China recently admitted.

While lack of supply due to China’s restrictions might be a short-term problem, the key long-term issues are what volume of REE resources actually exist, and how can the mining and processing be managed – especially the radioactive waste.

Surprisingly, on both fronts we can be justifiably positive.

In the past, the world had little use for REEs, so miners never bothered to look for them. Given the strong expected growth in REE demand for gadgets and green technology, however, there has been a global scramble over the past year to identify REE deposits. Mining companies are now looking very hard for any trace of REEs – and they will continue to find them.

According to Geoscience Australia, Australia has 59.4 megatonnes of sub-economic REE resources in addition to its 1.65 megatonnes of economic REEs. Some 53 Mt of the sub-economic variety can be found in the giant Olympic Dam orebody in South Australia.

At the moment, the metals extracted from Olympic Dam include copper (valued at $671 billion), uranium ($287 billion), gold ($134 billion) and silver ($15 billion). Compare this with the estimated value of the REEs in the same orebody – a whopping $4,195 billion. That’s four times Australia’s current GDP.

In its current expansion plans, BHP Billiton (owner of the Olympic Dam site) is ignoring this remarkable value. The miner considers REE extraction to be “uneconomic" and claims the technology isn’t available, despite it being similar in most steps to the current processing at Olympic Dam.