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Alinta, owned by privately owned Hong Kong conglomerate Chow Tai Fook Enterprises, is planning to build a 60 megawatt (MW) solar farm at Christmas Creek, which would help replace diesel generation at mines owned by Fortescue Metals Group.

The mines also use power from a gas-fired plant owned by Alinta.

“The combination of solar and gas means the mining operation will have clean, secure and reliable energy supply from morning to night,” Energy Minister Angus Taylor said in a statement.

The government said its Northern Australia Infrastructure Facility has agreed to lend up to A$90 million and the Australian Renewable Energy Agency (ARENA) will provide a A$24.2 million grant to Alinta.

“Working together, we are on the cusp of demonstrating that renewables can drive Australia’s economic powerhouses forward -even for remote and complex industrial applications,” Alinta Managing Director Jeff Dimery said in a joint statement with ARENA.

The project was considered attractive as it would help cut carbon emissions and ease reliance on imported diesel, reducing Fortescue’s need for about 100 million litres of diesel, ministers and ARENA said in separate statements, adding that this would also bring down power prices.

Fortescue said the project was first on this scale for the Pilbara and would cut carbon emissions from stationary generation by about 40% at its Christmas Creek and Cloudbreak mines, while helping it to keep costs down.

The solar farm is expected to be completed by mid-2021, ARENA said.