Study bolsters plan for 30-MW Ulindi 2 at DR Congo gold mine

Canadian gold miner Banro Corp. has completed a feasibility study of its Twangiza Gold Project in the Democratic Republic of Congo (DRC), finding the proposed 30-MW Ulindi 2 hydropower project to be more expensive than earlier estimates, but still an economic benefit to gold mine operations.

Banro said January 26 that the feasibility study found the Ulindi 2 project would cost US$133.8 million, including a contingency of US$20.1 million, to be funded in whole or in part by third-party financing. The price tag is higher than the total US$94.8 million estimated in a pre-feasibility study completed last year. (HNN 7/8/08)

Banro said Knight Piesold Ltd. of Canada, which performed hydropower studies as part of the overall gold mine feasibility studies, found capital costs for a hydro project were higher than for a comparable diesel-powered plant. However, it found that operating costs would be significantly lower, giving the Twangiza project a competitive advantage.

In addition, the hydro project has the potential to obtain carbon emissions credits that can provide revenue to offset the original capital investment. The hydro plant also has residual value after the closure of the gold mine.

�Going the hydroelectric route not only complements Banro's environmental friendly policies, but also presents an opportunity to reduce costs over the life of the Twangiza project,� Banro President Mike Prinsloo said. �The access to its own stand-alone hydropower plant, supplying a cheaper form of power, is a distinct competitive advantage for the Twangiza project.�

Prinsloo said Banro would seek third-party funding for all or part of the hydro plant, which would be repaid on a kilowatt-hour rate over the first ten years of the project. He said the hydropower cost of 8.4 US cents per kWh compares favorably to the 54 US cents per kWh for diesel generation.

Knight Piesold previously studied both Ulindi 1 and Ulindi 2 sites on the Ulindi River in eastern DRC's South Kivu Province. Ulindi 2 would utilize a 600-meter natural drop in the river over a distance of 18 kilometers. Banro previously said studies indicated Ulindi 2 could accommodate a significantly larger project if required.

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