Oz Minerals moves on plans for ‘world’s largest’ off-grid hybrid project

ASX-listed miner Oz Minerals confirmed it will initially source 80% of the energy needs for its West Musgrave Project through an off-grid hybrid renewable power solution after announcing it had given its final investment approval to develop the massive copper-nickel project in Western Australia (WA).

Oz Minerals said ~80% of the energy needs for the copper and nickel mine being developed in WA’s east, near the South Australian and Northern Territory borders is to be delivered via an optimised mix of solar PV and wind generation, supported by a battery energy storage system. This will be backed up by diesel-fuelled generation.

While no specifics about the size of the individual elements of the system were made available, Oz Minerals said the renewable power solution would have a nominal 50 MW base case power supply with room for expansion.

“Once complete, it will be one of the world’s largest, off-grid hybrid projects,” the miner said.

The renewables-based power solution is to be delivered via a power purchase agreement with an independent power producer and Oz Minerals chief executive officer Andrew Cole said the agreement includes provision for expansion with the company committed to developing a roadmap to 100% renewable generation.

“In addition to the ~80% renewable energy sourced from wind and solar for power generation, the project scope includes a pathway to net zero scope 1 emissions by 2038,” he said. “The pathway is aligned with the potential transition to an electric haulage fleet at the first engine change out, together with exploring other initiatives to reduce diesel and the application of offsets.”

Oz Minerals plans to start production at the West Musgrave site in late 2025 when it predicts the nickel market – which has been buoyed by demand for battery metals needed for decarbonisation and electrification – will enter a sustained period of undersupply.

“No other metals will have the same intensity of use as the world shifts to cleaner energy and electrification, electric vehicles, wind farms and solar panels,” Cole said.

West Musgrave is expected to produce an average of 35,000 tonnes of nickel in concentrate and 41,000 tonnes of copper in concentrate in each of its first five years, with production of 27,000 tonnes of nickel and 33,000 tonnes per annum over its 24-year mine life.

Oz Minerals chair Rebecca McGrath said global electrification is set to drive significant demand for these core metals.

“The board’s approval of West Musgrave is a fundamental step towards realising Oz Minerals’ strategy to evolve into a modern minerals producer set to supply global copper and nickel markets as the world moves into the de-carbonisation and electrification era,” she said. “We can see the enormous potential of this project.”

As well as producing both nickel and copper concentrate, Oz Minerals is also working on plans to add value by processing minerals on site.

“We also have a study underway into downstream nickel processing via mixed hydroxide precipitate (MHP) to further process the concentrate, increase product grade, reduce volume for transport and add further value to the project,” Cole said.

The Adelaide-based miner is also looking at partnering with electric vehicle and battery makers which are no longer content with offtake agreements, preferring to lock in supply through part ownership of mines.

“We are also considering the option to selldown a minority interest in the project to a strategic partner building on the significant in-bound interest we have received over the past six months,” Cole said.

The West Musgrave mine will add to the gold copper mines Oz Minerals has in South Australia at Prominent Hill and Carapateena and its Santa Lucia gold copper mine in Brazil.