Hillgrove Resources, AGL pull plug on planned pumped hydro energy storage at Kanmantoo mine

Photo: File.
Photo: File.

Hillgrove Resources and AGL have pulled the plug on a $31 million plan for a hydro-electric facility at Kanmantoo.

The mining company had been trying to renegotiate a deal with the energy provider, under which it was to have handed over control of the giant pit at its dormant copper mine so it could be used as a dam.

The pumped hydro energy storage project had been due to be completed by 2024.

Hillgrove had hoped to stall the handover while it considered further mining in underground tunnels beneath the pit, even at the cost of a $4 million payment from AGL.

On Friday the two companies announced they would scrap the deal entirely.

In a statement, Hillgrove said it had gained permission to begin underground mining, and planned a new program of drilling to measure how much ore might be left in the area.

"Hillgrove and AGL could not reach agreement on a way forward that enabled Hillgrove to commence underground mining and AGL to progress development of the PHES (pumped hydro-energy storage) simultaneously," the statement said.

"Hillgrove ... will now progress the approved additional drilling program, mine design, optimisation and feasibility studies for an underground mining project beneath the giant pit, and continue advancing its regional exploration."

The company did not indicate whether it was likely to re-hire some of the 120 workers it let go when its open-cut mining operation wound up last year.

Wholesale markets executive general manager Richard Wrightson said AGL remained committed to developing energy storage projects, including pumped hydro and batteries, but that the Kanmantoo plan had not worked out.

"The signing (of the agreement) was the start of a multiple-stage process to progress the project, and the agreements were subject to a number of conditions which needed to be satisfied within specified timeframes," he said.

Because those conditions had not been met, he said, the parties had ended the deal "without any ongoing obligation on either party".

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