Australian mining company Troy Resources Limited hopes to make operations at its Karouni gold project ‘green,’ by purchasing power from a reactivated Tumatumari hydropower facility.
“It is obviously of high interest to Troy since it will provide ‘green’ power replacing fuel oil,” Ken Nilsson, the firm’s Executive Director of Project Development told Stabroek News. “We are willing buyers just waiting for the supply to reach us,” he added.
Recently, Prime Minister Samuel Hinds said that there is a “great likelihood” that local firm Dynamic Engineering and Troy could reach a deal that would see the reactivation of the Tumatumari hydropower facility on the Potaro River. Stabroek News had reported previously that Dynamic Engineering Company Limited of Eccles was spearheading the rehabilitation of the long-defunct hydroelectricity station in Region Eight (Potaro/Siparuni) as part of a wider plan for industrial development in the area. Work had begun in 2010 but halted in early 2012, owing to financial difficulties.
Nilsson told Stabroek News that Dynamic Engineering, which is one of Troy’s contractors, brought the idea via the Prime Minister to Troy. He said his firm expressed an interest in purchasing power from the Tumatumari hydropower station and these discussions are continuing.
“Clearly it can’t supply all of Troy’s need but help sharing the load. Now it is more an issue of when can this power be available and at what cost,” Nilsson said. He noted that the power is of high interest to Troy.
Hinds, in a letter to Stabroek News, had noted that Dynamic Engineering was granted a licence to redevelop the Region Eight hydropower facility and the early business plan focused on producing wood and stone products in the area. “The startup mini-electricity utility at Mahdia was then pursued. We could offer only what the demand and readiness to pay of that market would be; no one could offer guaranteed quantities. That market seems not to have been enough to satisfy the financiers,” he said.
“With the knowledge of the Karouni gold mine coming on stream in the Kaburi area, the government encouraged both Dynamic Engineering and Troy Resources to get together on obtaining power from Tumatumari. My latest update from both parties is that there is a great likelihood that a deal of mutual benefit would be concluded and implemented,” the Prime Minister had stated.
The Australian company expects to begin producing gold at its large-scale Karouni gold project, at Kaburi, Region Seven, in June and expects its first sale in July.
Stabroek News reported last year that the Caribbean Development Bank (CDB) was willing to provide financing to upgrade and operationalise the Tumatumari hydropower facility but the funds needed was below the minimum the bank lends and the project was stalled as local institutions are unwilling to act as the intermediary.
The stalled project came up during a meeting of the Low Carbon Development Strategy (LCDS) steering committee, during which it was noted that the facility had great promise and was working up to 1990 and had provided 1MW of electricity and there is now a consortium to rehabilitate and get the plant to produce up to 2MW.
Dynamic Engineering had carried out extensive repairs on the Tumatumari hydro facility and conducted a preliminary test run, while parts sourced from overseas were installed. In December 2010, a preliminary test was done to demonstrate that the hydroelectricity station can operate with the main equipment that had been installed over the years; namely, the water turbine, gear box and other civil infrastructure. But it could not continue owing to the need for critical parts, which were later sourced and installed before the project dovetailed.
Dynamic Engineering executive Lloyd Rose had told Stabroek News that based on the successful completion of the first test, they would have moved to acquire the necessary financing to fully rehabilitate the station. He had said that some financing would be coming from the group of initial investors already involved in the project but they are also looking for other strategic investors as well as loan financing from the capital markets. Rose had declined to say what the estimated cost of the rehabilitation would be but revealed that just under US$100,000 had been invested up to February 2011.
The hydroelectricity station at Tumatumari Falls on the Potaro River was the first hydropower station in Guyana and was constructed by British Guiana Consolidated Goldfields Limited to power two large dredges for gold mining there and at Konawaruk in the mid-1950s. It was said that it had an installed capacity of 1500kW and used 2 x 750kW Francis turbines.
Following a prolonged workers’ strike, the operations were closed in the early 1960s but were put back into use in 1976 by the Guyana National Service to supply power to its administrative centre and other activities. Up to 1987, one turbine functioned. It is 241 feet above sea level.
