Kinross announced on February 14 an agreement to acquire two hydroelectric power plants in Brazil to secure long-term, low-cost power for our Paracatu mine.
Kinross agreed to acquire the Barra dos Coqueiros (BCQ) and Caçu power plants located in Goias – a neighbouring state of Paracatu that is approximately 660 km west of the mine – for $257 million in cash. For more information, see our release here.
The power plants are expected to provide 70% of Paracatu’s power and lower production cost of sales per ounce by approximately $80 over life of mine. The acquisition is expected to eliminate approximately 70% of future power purchases, reduce power tariffs and reduce market exposure for a key input in an environment where costs are expected to rise.
“This transaction represents a compelling opportunity that allows Paracatu to lower its cost of sales over the life of mine,” said J. Paul Rollinson, President & CEO. “I’m excited about the expected benefits this acquisition will bring to a long-life, cornerstone asset.”
The BCQ and Caçu have been in operation since 2010 and have operating concessions that expire in 2037, five years after Paracatu’s expected mine life of 2032. Additional infrastructure is not required for the plants to provide power to Paracatu due to Brazil’s well-developed infrastructure and existing market mechanisms for the transmission and utilization of power.
Kinross also self-generates power at Tasiast, Kupol and Dvoinoye.