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Korea Zinc's CopperString deal a boost for hydrogen and clean energy future

Business

Korea Zinc has secured a right to invest in the $1.7 billion CopperString 2 project after it agreed to a $17 million financing deal.

 

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The concrete benefits for Korea Zinc and its Townsville-based refinery, Sun Metals, have not been detailed but the company is a major energy user and has ambitions in green hydrogen which would need significant amounts of renewable electricity that CopperString could provide. It has already built its own 125 Mw solar farm.

The financing announced yesterday adds to previous deals with DIF Capital which provided $5 million in development funding to the project and has the option to take up to $400 million in equity. The State Government-owned Powerlink also has the option to invest. There has also been funding from the State and Federal governments.

The project is primarily about getting energy to Mt Isa and the undeveloped north west minerals province which has been hyped by the mining industry and successive governments for decades but lacks infrastructure. One resource estimate for the province is $680 billion.

But CopperString also has the potential to bring electricity back to the coast from proposed renewable projects along its route, south west of Charters Towers.

For the project’s owner, CuString, this is the second attempt to make the 1100km transmission line a reality.

Managing director Joseph O’Brien said Korea Zinc would have the right to invest in CopperString at financial close and would hold a minority stake.

“What it really says is that major industrial companies see validity in this and we have done a lot of work to demonstrate the value,” O’Brien told In Queensland.

“We are obviously talking to a large number of miners and mineral businesses but we don’t need any more investment so we are working in a strategic way.”

O’Brien said there was still a lot of work to do before financial close. It recently published a draft environmental impact statement and needs to finalise that and gain regulatory approvals as well as pre-construction engineering and continue negotiations with Powerlink.

“This financing agreement enlivens the significant opportunity to make the Queensland economy more resilient with CopperString’s potential to deliver a 40 per cent reduction in wholesale electricity prices for the north west minerals province and drive our global competitiveness in minerals mining and manufacturing and unlock new industries such as hydrogen,” O’Brien said.

“The world wants what we’ve got in the North West Minerals Province – globally significant resources including copper, lead, zinc, nickel, cobalt, gold, graphite, vanadium, silver, phosphate and strong rare- earth mineral potential – a truly impressive list of commodities, and Queenslanders deserve to reap the economic benefits of this export trade.

“Global demand is very strong for our commodities as they are critical inputs for smart devices, laptops and tablets and new clean energy technologies such as batteries, wind turbines and electric vehicles.”

Korea Zinc chief executive Yun Choi said the company was excited about the positive impact CopperString would have on the north Queensland economy.

“We are very excited to be investing in an enabling project like CopperString.   These sorts of projects have a knock-on enabling effect, which pave the way for more certainty in north Queensland and the north west minerals province and will create a healthy environment for further investment and job creation,” he said.

“CopperString is precisely the sort of project we need to have happening here. It’s great to see all the various parties, including the Government, coming to the table to make these sorts of visionary projects happen.

“One of the reasons we have invested in this project is the enabling effect it will have in creating opportunities in the renewable energy space, particularly hydrogen, which is an area where we are investing a lot of time and attention.”

Premier Annastacia Palaszczuk said the development opportunity was important to Sun Metals and Korea Zinc, and was a strong element of the Government’s interest in supporting the CopperString project.

“CopperString 2.0 will also open up land for the development of more solar and wind generation and support renewable generation capacity for a hydrogen export industry,” she said.

Deputy Premier Steven Miles said the project would transform the North Queensland economy.

“It has the potential to be the most transformative project for the North Queensland economy since the construction of the Great Northern Railway reached Mount Isa in 1929,” he said.

 

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