Northern Star will soon own more power after buying Newmont’s power business from its Australian division for US$95 million.
The move comes after the former paid $25 million for a 50% interest in Kalgoorlie Consolidated Gold Mines (KCGM), which afforded it the option to obtain the business from Newmont.
Northern Star now has a sale agreement with Newmont Australia to take over all shares of GMK Investments, which is a 100% owner of Newmont Power and NP Kalgoorlie – the latter of which, in turn, holds a half interest in Parkeston Power Station owner Goldfields Power.
Parkeston additionally supplies electricity to the Kalgoorlie area through a connection to the South-West Interconnected System.
Northern Star said the acquisition provides it with “significant synergies and value” including infrastructure and power security to support the requirements of KCGM; lower power costs at KCGM; and further options for Northern Star to implement renewable energy.
The cost of the option, it confirmed, will be taken off of the final purchase price, and it will thus pay the $70 million balance at the completion of the deal, expected next month.
Northern Star MD Stuart Tonkin said the purchase will give it greater control over its power supply in Kalgoorlie.
“The purchase means our Kalgoorlie power supply will now form part of our studies into ways to meet our commitment to becoming carbon-neutral,” he added.