Alexco probably won’t pay for transmission line

Alexco's Bellekeno mine won't likely be contributing any money to the construction of Mayo B or the new transmission line between Pelly and Stewart Crossing.

Alexco’s Bellekeno mine won’t likely be contributing any money to the construction of Mayo B or the new transmission line between Pelly and Stewart Crossing.

The electrical infrastructure is being built to supply new mine customers over the next decade, but Alexco isn’t required to chip in any money because of its circumstances.

The Keno City mine is too small and doesn’t need to invest in electrical infrastructure because it’s already linked to a power line, said officials from Alexco and the Yukon Energy Corporation.

“It’s a different situation from Minto because the infrastructure grew up with the mine here,” said Robert McIntyre, vice-president of corporate affairs and communications at Alexco, from Vancouver.

“Minto is a mine off in the middle of nowhere; they had to run a spur line over it.”

The Minto mine, owned by Capstone and operational since 2007, had to pay $7.2 million to Yukon Energy to help build the transmission line between Carmacks and Pelly Crossing.

The copper mine then had to pay the entire cost of building a spur line from the transmission system to its site northwest of Carmacks.

Yukon Energy isn’t certain yet whether it will ask Alexco to help pay for new electrical infrastructure like Minto.

“Yukon Energy is in the process of negotiating a power purchase agreement with Alexco, so I can’t say definitively what Alexco will or will not be required to contribute to Mayo B or the transmission line,” Janet Patterson, Yukon Energy’s spokesperson, said in an e-mail.

“That being said, there is a difference in circumstance between the Minto mine and Alexco in that the Keno mine is located on/near the existing grid (we provided it with power when it was operating previously), whereas Minto was not on the grid and so we needed to build a new line to provide it with service,” she said.

There’s a transmission line running right up to Bellekeno, a silver and lead mine slated to begin operation next year.

Alexco doesn’t have to pay even if it can’t open without the new transmission line.

“We’ve been talking over it for a while,” said McIntyre.

“We’re saying that the thing we’d like to see is the interconnection between Pelly and Stewart.”

That will bring power onto the Mayo-Dawson grid, where the mine is located.

“It’s the next guy in that’s going to need new generation,” said McIntyre. “We just need that surplus from the existing infrastructure.”

The only electrical infrastructure Alexco needs to build is about 1,500 metres of line and a step-down transformer that will convert electricity from a 65 Kv line to a 41-60 Kv line, said McIntyre.

The other reason Bellekeno doesn’t need to fund the power lines is that it’s too small, he said.

“We’re a 250 ton-a-day operation, maximum 400 ton-a-day,” he said. “Minto is about 3,500 and they want to go to 5,000.”

SDLqIt’s about one-tenth the size of Minto.”

In all, Bellekeno will likely need 1.3 megawatts of energy. Minto consumes around four megawatts.

Yukon Energy proposed to connect the Yukon’s two grids and build Mayo B – a five-megawatt expansion of the current Mayo hydro power facility – in 2006 after its projections for mining electrical demand exceeded its supply.

Alexco is currently negotiating a power purchase agreement with Yukon Energy that would determine the price of energy for the industrial consumer.

“The PPA is near done; we’re down to the details,” said McIntyre.

Minto’s agreement with Yukon Energy includes a firm power rate of 10 cents per kilowatt hour.

Yukon Energy is still looking to fund about half of its transmission line between Pelly and Stewart Crossing and Mayo B expansion.

It needs $35 million from government and industry to pay for the line, said president David Morrison in a letter to the editor last week.

Alexco has already received its quartz mining licence and it is currently applying for a water licence.

Construction of the mill will begin in January and continue for seven to eight months.

Contact James Munson at

jamesm@yukon-news.com

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