CALEDONIA Mining Corporation Plc (Caledonia) has commended power utility Zesa for pricing electricity in United States dollars for the mining industry, saying the move had stabilised power supply.

Electricity for the mining industry is now priced in US dollars, at a cost which is slightly lower than the pricing structure prior to the recent monetary devaluation.

The electricity supply authorities have also implemented an uninterrupted power supply agreement for the mining industry in an effort to support the sector and electricity supply has stabilised following these changes.

“The disruptions we experienced early in the third quarter necessitated a larger than normal utilisation of our diesel generator back-up. We have been pleased by the rapid and decisive response from both government and industry which has resulted in the alleviation of the supply shortages and a more stable US dollar-based pricing structure,” Caledonia chief executive officer Steve Curtis said.

- Advertisement -

The Zimbabwe Energy Regulatory Authority recently approved a 320% electricity tariff increase to 162,16 cents per kilowatt hour (kWh).

Caledonia, which operates Blanket Mine in Zimbabwe, said its mining concern continues to operate normally and electricity pricing in US dollar terms was stable and not affected by the recently-announced increases.

“As previously disclosed, Blanket did experience electricity disruptions during the month of July and in early August and relied heavily on its installed diesel generator back-up capacity. Prior to this time, Blanket had installed back-up generator capacity of approximately 12,5 megawatts (MW), sufficient to run the entire mine at full capacity but insufficient to sustain both the mine and the Central Shaft project,” it said.

In response to the increased risk of electricity supply outages Blanket has purchased an additional 6 MW of diesel generator capacity.

The additional generators are on site and are currently being installed and are expected to be operational within this month after which Blanket’s operations will be fully insulated from the risk of unstable electricity supply, it said.

Caledonia is also in the advanced stages of evaluating a project to install solar photovoltaic generating capacity at Blanket to further reduce dependence on the electricity grid, reduce operating costs and ensure a more environmentally sustainable electricity supply.

It said advanced engineering work is underway and Caledonia is in the process of applying for the relevant regulatory approvals and will shortly embark on a tender process from interested parties to build and operate the project.

“Caledonia expects to fund the project itself, but the tender process will also invite proposals from potential funders who may be able to offer a more cost-effective funding structure,” it said.

“In the future, Caledonia anticipates that Blanket will have a blended electricity supply from grid, solar and back-up diesel generators which will deliver greater levels of operational reliability, lower operating costs and improved environmental sustainability,” the statement read in part.

Caledonia has a 49% stake in Blanket gold mine.