Caledonia to import electricity directly from Zambia as power cuts bit 

03 Aug, 2022 - 00:08 0 Views
Caledonia to import electricity directly from Zambia as power cuts bit 

eBusiness Weekly

Tapiwanashe Mangwiro

Caledonia Mining Corporation, which owns a 64 percent stake in Blanket Mine in Gwanda, Matabeleland South province, is now considering importing power directly from Zambia through a shared power offtake agreement.

Blanket Mine uses electricity to power most of the underground equipment and to hoist ore, waste and employees to the surface. Electricity is also used to run the metallurgical plant.

Only 1,103 MW of the 2,045 MW total installed capacity is now operational, compared to a reported peak demand of 2,200 MW, increasing the country’s reliance on imported electricity to make up the difference.

The government’s initiative to revive idle mines is expected to increase demand for electricity from mining and industry, which continue to be the leading consumers of the fuel.

Caledonia Mining Corporation chief executive officer Mark Learmonth told this publication that they are experiencing two sets of power challenges.

“The first is that we have got voltage spikes, which if not careful can damage our equipment, otherwise we have straight up power outages,” he said.

“So we have got a full set of standby diesel generators. It is an 18-megawatt of installed diesel capacity. But that is expensive. We cannot do everything using diesel.”

The miner used 2.2 million liters of diesel in the last quarter of 2021. Recognising the economic, environmental and logistical challenges of running large-scale diesel generators for extended periods, the miner is just finishing off the first phase of its 12 MW ac solar project.

“It should be commissioned by month’s end. That will provide about 27 percent of our power needs, and then we are already looking at a second phase, which should increase the amount we get from solar,” he said.

He said power is the single biggest problem the company faces in Zimbabwe.

“We can manage it, we can deal with it, but we would like to make it better,” he said.

 

“The idea is that we would like a power purchase agreement (PPA) to come. We sent someone to Lusaka to engage with the Zambian authorities. There is over a gigawatt of power being made available from Zambia in the next few weeks or so.”

On a yearly basis, the miner spends about US$30 million on power. However, it goes up and down depending on whether they have diesel.

In 2021, the miner raised US$7.5 million in equity on the Victoria Falls Stock Exchange. The money was used in general business.

“If we do need money for the Bilboes project,” he said, “we will seriously consider raising equity on the VFEX because we found a lot of appetite there.”

Also the miner wants to raise debt for the solar project.

“We funded the solar project which cost about US$40 million. We funded all that ourselves using our equity. Frankly that business should have debt in it. Soon as that project will be up and running we will probably bring in some local debt partners.”

In Q2 2022, the miner produced 20,091 ounces of gold, up 20 percent from the year-earlier quarter, lifting first-half output to 38,606 ounces, a 29 percent increase on the first half of 2021

 

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