tretchikoff,i think sxp believe it is a better option for...

tretchikoff,

i think sxp believe it is a better option for shareholders and the project and its timescale may be a bit too much for sxp to chew so they have agreed to discuss specifics with linc.

read this article and it may give you an idea as to why linc are wanting to merge with sxp.

this paragraph is interesting because linc may be wanting to remove the potential "instability" that a jv with sxp may bring or be perceived by bhp to bring.

"The instability in the power generation sector adds to the challenges BHP faces in developing Olympic Dam."

heres the article,


BHP's Olympic Dam mine will need half SA's electricity
By Jeremy Roberts
March 27, 2008 01:00am

BHP Billiton will need nearly half of South Australia's current electricity supply to power its vastly expanded Olympic Dam copper and uranium mine.

The mining company wrote to potential suppliers this month revealing that power demand for the mine was expected to top 690megawatts when it reaches full production in 10 years.

This 30 per cent increase on previous forecasts for the mine, 600km northwest of Adelaide, is equivalent to nearly 42 per cent of South Australia's total electricity consumption and nearly half of Adelaide's power supply.

An industry insider yesterday described as "staggering" BHP's new power needs, which exceed previous forecasts by 170MW.

It would require the building of new power stations in the state at a time when incentives for business to invest in traditional power generation are clouded by efforts to combat global warming.

The new BHP forecast comes a week after the Rudd Government's Garnaut report on greenhouse emissions recommended power generators not be compensated in a carbon trading scheme.

South Australia has been an importer of electricity for several years, and its power distribution system was stretched to capacity to meet demand during the record heatwave earlier this month.

BHP is the state's largest single power consumer, taking 120MW. The company will use the aditional 570MW to power on-site mineral processing to separate uranium, copper and gold, as well as for the expanded Roxby Downs township, a larger airport and the new open-cut mining operation.

The instability in the power generation sector adds to the challenges BHP faces in developing Olympic Dam.

A company spokeswoman yesterday described the request for 690MW of power as an estimate.

"The expansion project remains in pre-feasibility and is yet to be approved," she said. But in correspondence to the state's power suppliers, dated March 5 and marked "commercial in confidence", BHP calls for expressions of interest to supply the power.

The correspondence was followed by in-person briefings on March 12, and asks suppliers to address three supply options: power generation at the Olympic Dam site, elsewhere in the state, or a combination of both.

The company says 60MW of the power would be used to run a desalination plant planned for the coast of the Upper Spencer Gulf, and to pump the water 320km north to Olympic Dam.

Providing the additional power within a 10-year timeframe will challenge South Australia's energy planners.

Gas-fired power stations normally take up to three years to build, industry sources said. Queensland's largest coal-fired power station, Kogan Creek in the western Darling Downs, which was opened last December, took four years to build.

Sourcing base-load renewable energy from "hot rocks" geothermal sources in the north of the state may become an option, but the technology has not yet been proved viable.

The South Australian Government has not imposed any mandatory requirements on BHP to source renewable energy.

South Australian Greens MP Mark Parnell said the lack of renewable energy sources for Olympic Dam would make the state a "greenhouse pariah".

"Our state risks being left with a huge carbon black hole as we become the greenhouse dump for one of the world's richest companies," Mr Parnell said.