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LATEST: Caledonia Mining offloads Zimbabwe solar plant for US$22m; proceeds to be invested in local projects
By Business Correspondent
Caledonia Mining Corporation has announced the sale of a solar plant in Zimbabwe for US$22.35 million with the sales consideration to be invested in the company’s other projects.
The disposal will also allow Caledonia management to focus “on our core business of gold mining and exploration”.
CrossBoundary Energy Holdings (CBE) will take over subsidiary Caledonia Mining Services Ltd, which operates the 12.2 megawatt plant, the company said Tuesday.
Having built the solar plant for US$14.3 million, Caledonia said the profit from its sale would be realised at a key moment in the company’s growth trajectory, with this set to be reinvested in other gold mining and exploration projects.
An exclusive offtake agreement will also see the site continue to supply renewable power to Caledonia’s Blanket Mine in Zimbabwe, ensuring a fifth of its electricity requirement.
“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,” said Caledonia CEO Mark Learmonth.
“Whilst the sale will generate an immediate profit for the Company, more importantly we have identified an experienced partner in 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.”
Matthew Tilleard, Managing Partner at CrossBoundary Energy, said: “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 noted CBE planned to expand the solar plant, which opened in February 2023, to deliver further energy to the Blanket Mine.
Caledonia added that renewable energy solutions were set to be considered at its other developments, with the Blanket Mine site having significantly reduced the need for diesel generators.
Since commissioning in February 2023, the solar plant has generated over 47,350Mwh of power, and profits attributable to the solar plant for the year ended December 31, 2023 were $728,023.
The power 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.
CrossBoundary 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.