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Sikhulekelani Moyo, [email protected]

CALEDONIA Mining Corporation Plc has signed a US$22,35 million conditional sale agreement with Cross Boundary Energy Holdings for the sale of the entire issued share capital Caledonia Mining Services (CMS), which owns and operates the 12,2MW solar plant that supplies power to Blanket Mine.

The US$14 million 12,2MW solar power was officially commissioned by President Mnangagwa in 2022 as part of efforts by the company to address electricity constraints that have affected the mining industry over the years.

The project, connected to the Blanket grid in November 2022, aligns with the Government’s strategy to boost renewable power production.

The electricity generated from the solar plant has significantly reduced the use of diesel generators and grid power at Blanket Mine, ensuring approximately a fifth of the mine’s daily electricity needs are met by solar power.

In a latest statement, Caledonia said upon completion of the sale, Caledonia will realise a profit on the US$14,3 million construction cost by selling the plant for US$22,35 million.

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The company said completion of the sale will return capital to Caledonia at a key moment in the company’s growth trajectory.

“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,” Caledonia chief executive officer, Mr Mark Learmonth, said.

“While the sale will generate an immediate profit for the company, more importantly, we have identified an experienced partner in Cross Boundary Energy Holdings (CBE), which brings vast expertise in delivering and running renewable energy projects.

“We look forward to developing a strong relationship with CBE. We are already working with them to deliver a meaningful extension to the plant and we will be considering renewable energy solutions at our other development projects in due course.”

Caledonia said the construction of the solar plant was initially financed by a registered offering of Caledonia’s shares in the United States in 2020 and this raised US$13 million through the issue of 597  963 shares.

Since its commissioning, the solar plant has generated over 47,350MW of power and profits attributable to the solar plant for the year ended December 31, 2023, were US$728 023.

The company said the plant will continue to supply Blanket Mine under an exclusive power purchase agreement.

Solar Plant at Blanket Mine

“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 focusing management’s attention on our core business of gold mining and exploration,” said the company.

Cross Boundary Energy is a leading developer, owner and operator of distributed renewable energy solutions for businesses across Africa, providing cheaper and cleaner energy through power purchase and lease agreements.

Cross Boundary Energy managing partner, Mr Matthew Tilleard, said their mission was to provide affordable, clean power solutions to under-served markets.

“We achieve this by deploying capital into energy projects that enable businesses to focus on their core operations,” he was quoted as saying.

“Our partnership with Caledonia demonstrates the efficacy of this model for the mining sector, benefitting the mine’s operations and ultimately enabling sustainable mining. We look forward to pursuing these acquisitions with miners across the continent.” — @SikhulekelaniM1