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Caledonia seeks power deal with ZETDC


Victoria Falls Stock Exchange-listed Caledonia Mining Corporation has commenced discussion with the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) to connect its US$14 million solar plant to the national grid.

ZETDC is a division of State-run power utility, Zesa Holdings, which sells power to consumers.

Independent power producers sign agreements with the utility to help them sell output from their facilities.

Caledonia is developing a solar plant to provide approximately 27% of Gwanda-based Blanket Mine’s power requirements.

The plant is expected to be commissioned next month.

“The company is in talks with the Zimbabwe Electricity Transmission and Distribution Company to co-ordinate the commissioning and connection of the plant to the 33KV grid and it is expected that the plant will be commissioned in June 2022,” the mining company said in its latest management’s discussion and analysis.

“Manufacturing delays and port closures due to the current COVID-19 lockdowns in China could impact the supply of the remaining equipment and may cause delays to the commissioning date. This equipment is not currently on the critical path to complete the project.”

“The company has commenced the evaluation of a further phase for the solar project to provide for Blanket’s peak demand during daylight hours. This will require an agreement between the company and the Zimbabwean authorities regarding the treatment of power that will be generated by a second phase that is surplus to Blanket’s requirements and or the installation of storage capacity,” it said.

Blanket, which is Caledonia’s flagship operation, suffers from unstable grid power and load shedding which results in frequent and prolonged power outages.

In late 2019, Caledonia initiated a tender process to identify parties to make proposals for a solar project to reduce Blanket’s reliance on grid power. After careful consideration, Caledonia’s board approved the construction of a 12 mega-watt alternating current solar plant at a revised construction cost of approximately US$14 million.

The plant is expected to provide all of Blanket’s minimum electricity demand during daylight hours. Blanket will continue to rely on the grid and generators to provide additional power during daylight hours and at night.

In 2020, the company raised US$13 million to fund the project through the sale of 597 963 shares at an average price of US$21,74 per share.

Currently, the 40-hectare site for the project has been cleared and fenced and Caledonia has obtained the necessary licences and permits for the project.

Voltalia, an international renewable energy provider, has been appointed as contractor for the project under an engineering, procurement and construction contract.

Caledonia provided Voltalia with a notice to proceed in March 2021 and has made an advance payment of US$1,8 million for long lead time items that are required to construct the plant. It said orders had been placed for approximately 95% of the solar equipment required to build the plant.

Civil works on the internal roads, drainage, foundations for equipment and the operations and maintenance building have commenced.

The majority of the equipment to construct the project has either been delivered or is en route to site.

Approximately 4 300 holes have been drilled on the structure to be constructed.

Caledonia said 15 770 metres of low voltage cabling has been installed out of a total of 15 932 metres.

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