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Ethiopian gold mine to be supplied with hydro power

Allied Gold Corporation announced that Kurmuk Gold Mine PLC (KGM), its subsidiary that owns the Kurmuk Gold Project in Ethiopia, has entered into a definitive Power Purchase Agreement (PPA) with Ethiopian Electric Power (EEP) to secure an energy supply for the Kurmuk Gold Project throughout the life of the mine.

Ethiopian gold mine to be supplied with hydro power
The Kurmuk Project (Credit: Allied Gold Corporation)

Allied Gold Corporation announced that Kurmuk Gold Mine PLC (KGM), its subsidiary that owns the Kurmuk Gold Project in Ethiopia, has entered into a definitive Power Purchase Agreement (PPA) with Ethiopian Electric Power (EEP) to secure a supply of hydropower for the Kurmuk Gold Project throughout the life of the mine.

Allied said the milestone is important because a steady supply of hydroelectric power is one of the factors that ensures the Kurmuk Gold Project “remains one of the lowest all-in sustaining cost (AISC) projects in the world.” Ethiopia is a low-cost power producer, generating power almost entirely through hydroelectric sources. The Kurmuk Gold Project is under development and is expected to begin operations in the second quarter of 2026.

The PPA will be in effect for a period of 20years and may be extended by mutual agreement. The agreement secures a flat energy charge of US$0.04 per kWh, applicable from the supply commencement date and remaining fixed for the entire term, providing cost certainty for the project. Electrical grid power will be supplied to the operation via a 75-km-long, 132-kV power line, with substations at Asosa, a major city near the project, and at the project site. The government will provide the grid connection, which will increase their equity stake in KGM from 5% to 7%, as defined in the Kurmuk Development Agreement. On-site power will be distributed via a network of 11-kV power lines.

The Kurmuk Gold Project is located in western Ethiopia, and Allied said its project implementation team has made “significant” progress since Q4 2023. To date, the team has completed execution planning and preparation activities, including mobilizing the EPCM contractor to the site, advancing detailed engineering, and formalizing the procurement plan.