Copper miner explores standalone energy options in Australia

By James Regan

SYDNEY (Reuters) - Oz Minerals (OZL.AX) could build standalone renewable power plants to ensure uninterrupted electrical supplies to its copper mines, managing director Andrew Cole said on Tuesday, a move that would protect it from blackouts of the type seen last year.

Cole said he was open to developing independent sources of energy - solar, wind and thermal - to mitigate the uncertainty in price and availability of electricity in South Australia state, which is notorious for sudden power outages.

"We're certainly looking at those technologies for our current operations, our projects and future projects," Cole told Reuters. "It makes more sense to use a combination of techniques to give you a sustainable supply of power," he said.

Oz Minerals is not the only one in Australia weighing standalone renewable power sources for industrial sites.

Fellow copper miner Sandfire Resources (SFR.AX) last year installed Australia's largest off-grid solar and battery storage facility in the country, while Sun Metals invested A$183 million ($143 million) to build a solar farm to run its zinc refinery.

Besides worries about power failure such as September 2016's statewide blackout, Oz Minerals' contract with an energy provider to supply power for its flagship Prominent Hill mine expires at the end of 2018. It has also yet to sign a supply contract to deliver power to a second mine under development.

Last year's blackout cut power for nearly 24 hours after a series of storms and lightning strikes, halting production at BHP's Olympic Dam copper mine for nearly two weeks and forcing Oz Minerals to stockpile copper ore at its Prominent Hill mine.

BHP Billiton (BHP.AX), which lost $105 million as a result of the outage, has since told Oz Minerals it would not renew an agreement allowing Oz Minerals to use power lines that connect the Olympic Dam site to the state's power grid.

Power makes up about 10 percent of operating costs for Oz Minerals, much lower than for BHP, which in addition to mining, operates a smelter at Olympic Dam.

Australia's government on Tuesday rejected calls to set a clean energy target, instead scrapping aid for renewable projects and adopting a fuel-neutral energy policy it said could keep the country's lights on and cut power prices.

($1 = 1.2762 Australian dollars)

(Reporting by James Regan; Editing by Tom Hogue)