Canada's biggest publicly-traded utility splurged $US318 million ($312.2 million) for Fortescue Met-als' Solomon mine power station yesterday and is targeting further Pilbara acquisitions to expand its WA business by 40 per cent.
TransAlta Australia general manager Aron Willis told _WestBusiness _that it had begun preliminary discussions with other miners needing remote power generation and he signalled a possible interest in supplying Gina Rinehart's $10 billion Roy Hill project.
"We have set a target to double our installed capacity in WA within the next five years to 600 megawatts," he said.
Mr Willis said that while it had yet to talk with Hancock Prospecting, its Roy Hill mine was of a scale that required power stations greater than 30MW, the level above which it is targeting other mine sites in the region.
The power sale, first reported by _WestBusiness _, comes a day after Fortescue said it would delay its expansion push and sack 1000 staff in a bid to save $US1.6 billion to offset plunging iron ore prices.
Under the deal, TransAlta will pay Fortescue $US318 million for the 125MW gas and diesel station, and in return receive an initial $40 million a year (escalating over time) to run the plant over 16 years, with extension options.
While Fortescue says it has only temporarily shelved two-thirds of the Solomon expansion, TransAlta will still be paid to run the plant over time even if the full Solomon project is not restarted under its "take or pay" contract.
The move, if approved by the Foreign Investment Review Board, would bring TransAlta's WA assets to 425MW.
Mr Willis said the plant, currently under construction by contractor UGL, was on track to begin commissioning at the end of the month.He also said he had an open mind about a long-term plan to connect all the mine power stations in the Pilbara with one grid, which was surprisingly flagged by the State Government in last week's 20-year power master plan. However, he said "no one should be under any illusion that there is an easy or quick fix for that solution".
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