Harare (New Ziana) – Blanket gold mine in Gwanda, Matabeleland South Province, expects to save at least US$3 million per annum in electricity costs when its planned 12-megawatt solar power plant comes on stream in July, parent company Caledonia mining has said.
The power plant is expected to provide approximately 27 percent of the mine’s average daily electricity needs, reducing Blanket’s reliance on the national grid.
To reduce the effects of power cuts on operations, Caledonia chief financial officer Mark Learmoth said Blanket was also using diesel generators.
But, he said, the company had incurred huge costs to run the generators.
For example, last year Blanket spent nearly US$4 million on diesel, up from less than $2 million the previous year.
“But it is not just a cost issue, it (running generators) has environmental concerns and from a logistical point of view just getting your hands on that amount of diesel is quite tricky,” Learmoth said, commenting on the company’s full-year results released on Thursday.
“The only operational problem we really face in Zimbabwe is a shortage of power and that is not a Zimbabwean problem alone, it is Zimbabwe, South Africa, and the whole (Southern Africa) region.
“So the solar project will be up and running by end of June this year. It will provide just over a quarter of Blanket’s daily requirements, and it will save blanket nearly US$3 million a year in electricity costs which equates to about US$35-$40 an ounce, about 5 percent of our on-mine costs.”
In August last year, Caledonia announced it had awarded Voltalia, a French-based renewable energy company the contract to construct the solar power plant.
Caledonia raised US$13 million via the sale and issue of 597 963 shares in the company for the solar project.
Learmoth said the solar plant would also reduce Blanket’s ecological footprint.
“It is a great step forward and already we are now evaluating a second phase project to further increase the size of the solar project to reduce our reliance on diesel and grid even further,” he said.
Despite the power challenges, Caledonia recorded US$54.1 million profit in 2021, a 16 percent increase from the previous year on the back of record annual gold output at Blanket mine.
Buoyed by a new US$67 million central shaft which was commissioned in the first quarter of 2021, output rose to 67 476 ounces from 57 899 ounces.
Caledonia chief executive officer, Steve Curtis described last year as a turning point for the business whose revenue grew from US$100 million in 2020 to US$121 million in 2021.
The company has acquired new claims as it pursues plans to become a multi-asset gold producer.