Caledonia Mining Corporation Plc recently successfully concluded the sale of its 12.2MWac solar power plant, which supplies its Blanket Mine operation, to CrossBoundary Energy Holdings (CBE) for a pre-tax consideration of US$22.35 million. The transaction, finalized on April 11, 2025, represents a strategic move by Caledonia to focus on its core gold mining business while ensuring the mine retains access to a reliable and renewable energy source.
The sale of Caledonia Mining Services (Private) Limited (CMS), the Zimbabwean subsidiary that owned and operated the solar plant, follows a competitive bidding process managed by Caledonia’s financial advisors, IH Advisory, which commenced in September 2024. The decision to divest the solar asset aligns with Caledonia’s overarching strategy to streamline its operations and redeploy capital towards its primary gold mining and expansion initiatives.
Constructed at a cost of US$14.3 million, financed through a US share offering in 2020, the solar plant was commissioned in February 2023. Since its inception, the facility has generated over 57,722 MWh of clean electricity, playing a crucial role in mitigating the impact of Zimbabwe’s persistent power challenges on Blanket Mine’s operations. The solar plant currently meets approximately 20% of the mine’s daily electricity requirements, contributing significantly to its energy independence and cost management.
Crucially, the terms of the sale agreement include an exclusive Power Purchase Agreement (PPA) between CBE and Blanket Mine. This ensures that despite the change in ownership, the mine will continue to benefit from the consistent supply of renewable energy generated by the solar plant. This arrangement guarantees operational continuity and safeguards Blanket Mine against potential fluctuations in the national power grid.
Mark Learmonth, Chief Executive Officer of Caledonia, expressed his satisfaction with the successful completion of the sale. “We are pleased to have completed the sale of the solar plant, strengthening our cash position and enabling us to redeploy capital towards our core gold mining and expansion operations,” he stated. He further highlighted the financial benefits of the transaction, noting that the US$22.35 million sale price represents a profit on the initial construction cost. “Importantly, we retain the exclusive energy off-take agreement, ensuring that approximately 20% of Blanket Mine’s daily electricity needs continue to be met by renewable energy,” Learmonth added.
The proceeds from the sale have significantly bolstered Caledonia’s financial standing. The company’s pro forma consolidated net cash balance now stands at US$18.6 million, a substantial improvement from the net debt of US$3.8 million as of April 9, 2025, and the US$8.7 million net debt recorded at the end of 2024. This strengthened financial position provides Caledonia with greater flexibility to pursue its growth objectives within the gold mining sector.
Matthew Tilleard, Managing Partner at CrossBoundary Energy, emphasized the strategic importance of such energy solutions for the African mining sector. “Energy provision is an expensive challenge for the mining sector in Africa. The acquisition of Blanket Mine’s solar PV facility is part of CrossBoundary Energy’s ongoing commitment to providing the best energy solutions for the sector,” Tilleard commented. He further noted that the PPA structure allows Blanket Mine to “continue utilizing the benefits of distributed renewable power, whilst freeing up capital for its value-generating mining activities.”
This transaction underscores a growing trend within Zimbabwe’s mining industry, where companies are increasingly looking to monetize non-core assets while embracing sustainable energy solutions. The deal highlights the potential for strategic partnerships in clean energy infrastructure to enhance operational reliability, reduce costs, and improve the financial resilience of mining operations in the region. Blanket Mine’s securing of long-term renewable energy supply through the PPA, will enable it to continue operating efficiently and sustainably, while it focuses its resources on its core strength – gold production.