Wärtsilä and Lihir Gold sign 10-year service agreement

6 January 2021

Wärtsilä has signed a 10-year tailored guaranteed asset performance agreement covering power plant maintenance and operations advisory services for a mine with Lihir Gold Ltd, part of Australia-based Newcrest Mining, one of the world’s largest gold mining companies. The mine is located on Lihir Island in Papua New Guinea. The agreement has shared business case incentives, based on key performance indicators (KPIs), which should reduce operational cost and enhance power availability, supporting the mine’s production targets. The 10-year agreement, worth over €150 million, was signed in October and it is targeted to take effect from the end of Q1 2021.

The 170 MW power plant provides a critical electricity supply to run the operations of the mine. It has 22 Wärtsilä engines, of which the last one was commissioned in 2013. 

The agreement will also provide maintenance and parts cost predictability, including a reduction in working capital. It includes full technical support, real-time monitoring of the equipment from Wärtsilä’s Expertise Centres, condition-based maintenance and asset diagnostic reporting, operational advisory support, as well as all planned and unplanned maintenance of the generator sets and auxiliaries. The agreement KPIs with shared incentives are based on fuel and oil consumption and power availability. The KPIs can be adjusted by mutual agreement during the agreement period, should the market change.

Henri van Boxtel, Energy Business director, Wärtsilä Energy commented: “This agreement takes a holistic approach to the plant’s operations and maintenance … by linking the availability and performance of the power generating plant to the mine’s productivity, we are establishing a flexible and beneficial business case that promotes efficiency and delivers real value over the entire lifecycle of the power plant. We are at the same time aiming to increase the reliability of the electrical supply, which can help raise the mine’s output”.

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