Caledonia disposes of US$14.3 mln Blanket Mine solar plant for profit
HARARE – Caledonia Mining Corporation Plc is set to dispose of its 12.2MW solar plant to CrossBoundary Energy (CBE) Holdings for US$22.35 million in cash. The solar plant, built at a cost of US$14.3 million and which has significantly reduced diesel and grid power usage at Blanket Mine by supplying roughly a fifth of its electricity needs, will continue servicing the mine through an exclusive power purchase agreement.
Since its commissioning in February 2023, the plant has generated over 47,350 MWh of power, resulting in profits of US$728,023 attributable to the plant for the year ending December 31, 2023.
In a statement, the company’s CEO, Mark Learmonth, said that the sale proceeds will be reinvested into Caledonia’s higher return projects, emphasising the company’s focus on gold mining and exploration. This comes at a time the company is looking at financing solutions for its Bilboes project.
“We are pleased to have signed this agreement to sell the solar plant, which, upon completion, will enable us to redeploy capital to our core business of mining. While the sale will generate an immediate profit for the company, more importantly, we have identified an experienced partner in CBE that brings vast expertise in delivering and running renewable energy projects.”
CBE is a developer and operator of distributed renewable energy solutions for businesses throughout Africa. By offering power purchase and lease agreements, CBE delivers cheaper, cleaner energy while enabling corporate customers to bypass upfront capital expenditures and technical risks.
Founded in 2015 by the CrossBoundary Group, CBE was the first provider of fully financed commercial-industrial solar solutions in Sub-Saharan Africa. Operating in over fourteen countries, it serves various clients, including notable companies like Diageo, Heineken, and Unilever.
The completion of recent purchases hinges on obtaining local regulatory approvals and installing upgraded equipment, a process expected to take a few months.
The company also stated that the exclusive power purchase agreement will significantly enhance shareholder value, providing a strategic advantage and ensuring long-term benefits for all stakeholders involved.
“The sales consideration will be reinvested in Caledonia’s other projects that are expected to yield a higher return to our shareholders and will have the added benefit of focussing management’s attention on our core business of gold mining and exploration,” said Learmonth.
CBE has been invited to tender for an expansion of the solar plant to deliver further renewable energy to Blanket Mine.
Managing Partner at CrossBoundary Energy, Matthew Tilleard, said they are committed to providing the company with clean energy and have more appetite for more acquisitions in the continent.
“CrossBoundary Energy’s mission is to provide affordable, clean power solutions to underserved markets, and we achieve this by deploying capital into energy projects that enable businesses to focus on their core operations. Our partnership with Caledonia demonstrates the efficacy of this model for the mining sector, benefiting the mine’s operations and ultimately enabling sustainable mining. We look forward to pursuing these acquisitions with miners across the continent.”
Caledonia is looking to significantly grow its production in the future with the addition of the Bilboes sulphide operation as a second producing asset, potentially tripling production for Caledonia to over 200,000 oz p.a. A feasibility study on the Bilboes Sulphide Project is expected to be delivered during H1 next year. -finx
