Power generation at Gold Fields- Chimney Creek: The profitable alternative

In 1986, Gold Fields began negotiations with a large Nevada electrical power utility to supply power for its Chimney Creek mine in northern Nevada. After the long negotiations reached an impasse over various costs associated with the power line, a decision was made by Gold Fields to generate its own power. Self-generation is not uncommon overseas, but it is rare for any but very large or very small operations in the United States. Surprisingly, under certain conditions a mine can generate its own power profitably, and Gold Fields has found that the associated operating and maintenance problems are minimal. The following report details what factors went into this decision and how it works. Hopefully, it can serve as a guideline for those who may find themselves in a similar position. History In the spring of 1986, Davy McKee Corp. was contracted by Gold Fields Mining Corp. to provide design engineering and construction management for the chimney Creek Mine. Chimney Creek is located about 50 mi northeast of Winnemucca, NV in a remote part of Humboldt County. The nearest industry using utility power was the Pinson Mine, about 13 mi from the proposed plant site. The existing electric line was not capable of carrying another mine the size of Chimney Creek, which required 29 million kwh per year. There were three options available to Gold Fields for the power supply: 1 )Power could be supplied by the public utility from a coal-fired plant about 30 mi away by constructing a new line to the mine,