Caledonia switches on new solar plant, expects lower production costs

Solar farm at Caledonia's Blanket Mine
Blanket Mine's new solar farm: Caledonia eases reliance on ZESA

Caledonia Mining says its new 12MW solar plant has started generating electricity for its Blanket Mine, providing an alternative to unreliable ZESA power.

Hit by power cuts and an unstable grid, Blanket had installed diesel power backup, but this has been expensive and unfriendly to the environment. Last year, the company began building a solar farm next the mine, after raising US$13 million from a share sale for the project.

The power plant will eventually supply 27% of Blanket’s power needs and cut Caledonia’s cost of production, CEO Mark Learmonth says.

“With 21% of Blanket’s on-mine costs relating to energy usage, this solar plant is a very important project for the Company as it will improve the quality and security of Blanket’s electricity supply and provide environmental benefits through cleaner energy,” says Learmonth.

“The solar power will displace more expensive power from the grid and from the diesel generators and is expected to reduce Caledonia’s consolidated cost per ounce of gold produced by approximately US$37.”

Blanket’s all-in-sustaining cost per ounce for the last quarter was US$944, which was 8.5% higher than the previous quarter.

Power supply is the biggest concern for mining companies, according to the latest survey of mine executives by the Chamber of Mines. The State of Mining Industry Report says 68% of miners say they are losing up to 20% of their production potential to power cuts. Some 60% reported power cuts of up to six hours a day.  

Electricity demand is rising as mines expand and new projects kick off. ZESA says it has applications of 2350MW in new connections, 80% of which are from mining. But the utility is unable to meet demand, which the Chamber projects will rise 20% in 2023.

This means mines have had to invest in solar. Zimplats plans 200MW of solar energy as part of its new US$1.8 billion investment into expansion in Zimbabwe. Karo Mining, which is building a new platinum mine at Selous, will install 300MW for the project.

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