Nevada miners support power usage bill

Denver — A coalition of mining companies, power companies and resort casinos has filed suit in the Nevada state Supreme Court, seeking passage of a bill that could affect how large electricity-users buy their power.

Bill 661 would allow large power-users, including mining companies, to buy electricity on the open market rather than depend on local utility companies.

The mines may not get lower prices right away, says Russ Fields, president of the Nevada Mining Association, which supports the bill, but the proposed legislation would provide greater price flexibility. It would also pave the way for construction of a proposed power plant near Carlin, to be operated by Houston-based El Paso.

In February, Newmont Mining (NEM-N) signed a letter of intent with El Paso for 150 MW from the 480-MW station, which would be built on Newmont’s TS Ranch. The gas-fired station would power gold operations on the nearby Carlin trend and be at the receiving end of an inter-state Ruby pipeline, allowing for receipt of natural gas from Utah and Colorado.

Newmont, which is the state’s largest single user of energy, lobbied hard for passage of the bill. To power the autoclaves, ball mills and roasters at its various operations around northern Nevada, the major draws 110 MW from Sierra Pacific Power, the state’s largest energy provider. It buys an additional 65 MW from the nearby Wells Rural Electric Co.

Newmont wants to be able to negotiate with other providers, now that Sierra Pacific has upped its electricity rates in response to California’s energy crisis.

“The bill allows us to take greater control of our power costs, which are second only to labour,” says Mary Korpi, Newmont’s Nevada spokesman.

Not surprisingly, Barrick Gold (ABX-N) also lobbied for the bill. The major saw its power costs hit US$60 million for the year, up from US$43 million in 2000. Barrick is another of Sierra Pacific’s largest users, drawing 110 MW. Placer Dome (PDG-N), which operates three mines in Nevada, and AngloGold (AU-N), which operates the Jerritt Canyon mine, also supported the bill.

Under the bill, power users who draw more than 1 MW would be free to seek their power on the market after April 2002.

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