TSX-listed Ivanhoe Mining has invested in South African energy and helium producer Renergen and will power the Platreef polymetallic project in South Africa with this energy.
Ivanhoe invested approximately US$13 million, or 4.35% interest in Renergen shares. The agreement will allow Ivanhoe an exclusive right to negotiate an off-take agreement for electricity. Ivanhoe will also have the option to subscribe to up to 55% of shares in the company.
The Renergen energy will be sourced by the Virginia gas and solar hybrid-power facility, which will be commissioned in May.
The South African project will be powered by solar power, combined with liquefied natural gas. Construction on the solar plant will begin in April, and will have a capacity of 5 MW. The plant will be commissioned early next year.
This new source of energy will support mine development and construction activities. It will also be used to charge electric vehicles on site.
"Having a reliable source of clean, renewable electricity from a solar-powered plant at the Platreef Mine is an important step in our journey toward net-zero carbon emissions," co-chief executive Robert Friedland said.
Natural gas also produces 50% fewer emissions than coal-fired plants, he added.
The mine, expected to enter its first phase of production in the September quarter of 2024, will require approximately 30MW of electrical power. Phase 2 of production will require 100MW.
Ivanhoe Mining owns 64% of the palladium-rhodium-nickel-platinum-copper-gold project via its Ivanhoe subsidiary, while South Africa's Black economic empowerment structure owns 26%. The remaining 10% is owned by a consortium of Japanese companies, which include ITOCHU and JOGMEC.
In 2021, South Africa amended its energy plant licensing threshold to open the way for mining companies to invest in their own plants.
South Africa's energy grid has been under significant stress in recent years, largely due to widespread failures of its electricity public utility Eskom.