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Caledonia raised US$13 million last year to finance the plant


Caledonia building 12MW solar plant for Blanket Mine in Zimbabwe

The solar plant is expected to significantly reduce use of diesel generators (which are substantially more expensive than grid power).

UK mining company, Caledonia Mining Corporation Plc, is building a  12MW solar plant to supply its Blanket mine in Zimbabwe. The renewable energy facility will supply 27% of the gold mine’s electricity needs. The company released its financial results this week where they announced that they expect the solar plant to be operational within the next 12 months.

“The 12MWac solar project is now in the procurement phase and is expected to be operational within the next 12 months,” the company announced.

Caledonia Mining Corporation Plc successfully raised US$13 million in September last year for the construction of the solar power plant for its Blanket gold mine. Caledonia raised the funds required to construct the plant by way of an at the market sales process on NYSE American conducted by Cantor Fitzgerald & Co on its behalf. Pursuant to the process, the Company issued 597,963 shares, representing considerably fewer issued shares than the expected 800,000 that it had initially applied to list.

The company appointed French renewable energy company, Voltalia, as the engineering, procurement and construction (EPC) contractor following a 2019 request for proposal.

Solar plant to reduce power challenges

Zimbabwe has been experiencing recurrent power shortages for close to two decades now. This means that producers and heavy power reliant companies have trouble ensuring their operations continuously operate. Caledonia says their operating expenses this year slightly increased as a result of use of diesel generators to power their mining operations. 

“The cost per tonne mined increased by only 4 per cent in the Quarter compared to the first quarter of 2020 and this was due largely to increased usage of diesel generators because of continued grid supply problems,“ said Steve Curtis, Caledonia’s Chief Executive Officer.

The solar plant is expected to significantly reduce the risk to the mine of any further deterioration in the quality of grid power which would necessitate increased use of diesel generators (which are substantially more expensive than grid power). The plant will also reduce Blanket Mine’s environmental footprint.

Through the plant, Caledonia expects to yield a modest return to shareholders after taking account of the dilutive effect of the equity issued to fund it.

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