Private company Geo40 Ltd, which has been supported by some high profile Australian mining executives, is now moving to begin commercial extraction of silica from geothermal fluids from geothermal power operations in New Zealand.
The company this week said that in cooperation with Contact Energy Ltd (NZX & ASX: CEN) and the Ngati Tahu Tribal Lands Trust it will be applying its technology to recover silica.
The Geo40 technology to extract silica from geothermal fluid will be used at Contact’s Ohaaki power station.
Once extracted, silica will be sold to manufacturers for use in everyday consumer goods, such as paint, providing an environmentally-sound source of silica that would otherwise require amounts of carbon-intensive energy to make.
GEO40, formerly known as Environtech, said the potential volume of high grade silica sourced from Ohaaki would be up to 10,500 tonnes per annum, most of which will be exported overseas.
Commenting, Contact’s chief generation officer James Kilty said: “Geothermal energy is a proven source of renewable energy and this partnership builds on geothermal’s already impressive environmental credentials.”
“It’s part of our de-carbonisation strategy. Our focus is on using innovative ways to support customers to shift off carbon-intensive inputs by maximising the benefits of the abundant renewable resources in New Zealand,” Kilty added.
The website guide2.co.nz said that for Contact, the operational benefits are significant as silica builds up in the geothermal pipes over time, and removing it would significantly reduce equipment maintenance costs and increase the overall life-span of a geothermal plant.
Also removing silica allows a plant to extract more heat from the geothermal fluid, making it more efficient to run.
The website said the deal provides financial and social benefits to Ngati Tahu Tribal Lands Trust. The partnership will provide an ongoing revenue stream to the Trust, and the processed fluid will restore clarity to the Ohaki Ngawha, a sacred natural hot spring.
This, Guide2 said, will be the Trust’s first commercial venture of this nature, with the proceeds going towards restoring the Ohaki Community.
The benefit for Geo40 is perhaps the first of a series of silica harnessing programmes with New Zealand’s geothermal industry, and late last year NZResources.com reported that the company was looking at an IPO for the Australian Securities Exchange (ASX).
NZResources had said test work and trial work on harnessing silica from geothermal power plants in New Zealand and possibly Japan was leading to plans for an $A25 million float on the Australian bourse and to also consider the Canadian market.
Geo40’s backers including former boss of African copper miner Anvil, Bill Turner, now running a social engagement programme for mining companies operating in Africa, and chief executive of Australian gold, nickel and copper miner Independence Group Ltd (ASX: IGO), Peter Bradford.
Last November, The West Australian newspaper reported that Geo40 has other fundraising options including private equity in favour of an initial public offer. Geo40 had just raised a further $A11 M through an oversubscribed private placement through Australian broking house Euroz.
Leading the company in New Zealand is Kiwi mining executive John Lea who was lured back to New Zealand a few years ago to manage the company and form liaisons with established geothermal energy producers.
Lea said this week: “The beauty of our technology is that nature - the geothermal reservoir - has already done most of the work for us, by dissolving the naturally occurring silica. Our process extracts the silica and turns it into silica products that will be exported around the world.”
Last year John Lea told The West Australian that as well as working with Contact Energy it was working with Mercury NZ Ltd (NZX: MEL; ASX: MEZ).
NZResources also reported last year that GEO40 saw that the global market for colloidal silica – used for precision casting, paints, textiles and paper – was worth more than $A1.6 billion ($NZ1.77 B).
Geo40 had said its patented technology allows for economic extraction of silica and other specialty minerals such as lithium and boron from the hot fluids harnessed by geothermal power stations.
NZResources reported that Turner and Bradford were enticed into the company by its founder, former Anvil business development chief Mike O’Sullivan, who put his mind to mining geothermal fluids when he went home to New Zealand after Perth-based Anvil was taken over by China’s MMG in 2011 in a $A1.3 B takeover.
Geo40 has a pilot plant at Contact Energy’s Wairakei geothermal field, another at the Norske Skog pulp and paper mill site at the Kawerau geothermal field, and one with Mercury site, also in the Kawerau field. Japan’s Geothermal Research & Development Co Ltd (GERD) in interested in the silica recovery process.
Sources: guide2.co.nz; nzresources.com; thewest.com.au