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Barrick: Power-plant conversion to natural gas to cut costs, greenhouse gases

Kitco News

Barrick: Power-plant conversion to natural gas to cut costs, greenhouse gases

(Kitco News) Barrick Gold Corp.'s (NYSE: GOLD; TSX: ABX) Pueblo Viejo power plant is expected to receive its first natural gas in the first quarter, with the company saying this will be a win-win situation – both lowering its operating costs and also cutting greenhouse gas emissions.

Pueblo Viejo, located in the Dominican Republic, entered into a 10-year supply agreement with AES Andrés DR, SA last May for natural gas and construction of a gas pipeline from the AES terminal to the mine’s Quisqueya I power plant.

“The conversion of Quisqueya I to natural gas will help reduce Pueblo Viejo’s power generation costs by some 30%,” said Mark Bristow, president and chief executive officer of Barrick. “Greenhouse gases will also be cut by 30% and nitrogen oxide by 85%, and the mine’s dependence on oil will be significantly decreased.”

Further, the gas pipeline is facilitating the conversion of other power plants in the region, which will translate into further reduction in greenhouse emissions and lower energy costs within the Dominican national grid, Barrick said. Other power producers in the area have announced the conversion to natural gas of an additional 525 megawatts, the company added.

Pueblo Viejo is a joint venture 60% owned by Barrick and 40% by Newmont Goldcorp. Production began in 2012. Output in 2019 is projected at 550 to 600 gold ounces at all-in sustaining costs of $610 to $650 an ounce.

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