Caledonia Mining is exploring options to raise US$250 million to develop its Bilboes project into what could be Zimbabwe’s biggest gold mine.

The company, which also owns the Blanket gold mine in Zimbabwe, could raise the money via a combination of debt, its own cash reserves and equity, said Maurice Mason, Caledonia’s vice-president, corporate development.

The Bilboes project could potentially produce about 170,000oz ounces of gold annually, boosting Caledonia’s total bullion output to about 250,000oz, Mason said.

Caledonia, backed by investors including Cape Town-based fund manager Allan Gray, is one of a number of mining investors searching for new opportunities in Zimbabwe, even as the economy buckles from challenges such as intermittent power cuts, scarcity of US dollars and hyperinflation.

Caledonia, which plans to construct the Bilboes mine over two years, is doing studies to find solutions to reduce the upfront capital required, Mason said.

“It will be Zimbabwe’s biggest gold mine by far,” Mason said via email. “We are considering phased capital raising, but that will depend on the outcome of the review of the feasibility study.”

While investors were cautious to commit to big mining projects, “our experience has been for quality projects with good returns and  investors have been supportive”, he said.

Zimbabwe has been struggling to attract big investors from early 2000 when its economy imploded after the government’s seizure of white-owned commercial farms for distribution to blacks.

The scarcity of dollars means some investors often struggle or fail to remit profits.

While Caledonia has been able to pay dividends from its Blanket mine, Mason said in general terms some international investors remain concerned about repatriating profits from investments in Zimbabwe as well as about the country’s policy stability.

“Foreign investors need to know they can repatriate the fruits of their investment,” Mason said.

Gold is among Zimbabwe’s top foreign currency earning commodities with tobacco and platinum metals mined by units of Impala Platinum and Anglo American Platinum.

Caledonia, which has long sought to expand gold output in Zimbabwe, acquired the Bilboes project in 2022. It’s also searching for more gold deposits at Motapa and Maligreen projects.

The African upstream oil and gas sector is in the middle of an US$800 billion capital expenditure (capex) programme that will see liquified natural gas (LNG) emerge as a major investment theme alongside traditional deepwater oil according to Ian Thom, Upstream Research Director at Wood Mackenzie.

Speaking at the African Energy Week event in Cape Town, Thom told delegates that the 20-year investment cycle that started in 2010 would culminate at the end of the decade with world-scale LNG projects in Mozambique and floating LNG (FLNG) across five countries. Africa is already a leader in floating LNG with over 50% of global capacity, and scope for more projects to emerge.

“With abundant gas resources, Africa is looking at all opportunities to develop gas for domestic and export markets,” Thom said. “The niche role that FLNG plays has gained traction in Africa due to its flexibility, quick time to market and suitability for smaller volumes. We see more examples where FLNG could be applied to African resources, and we expect there is more to come on this growth story.”

Global FLNG capacity and Africa’s market share

West Africa offers huge LNG potential

Thom added that current LNG exports coming from Africa are just over 40 million tonnes per annum (mmtpa) and there are a number of LNG projects in Sub-Saharan Africa (SSA) that are in various stages of development. These include bp’s Tortue FLNG, located offshore from Senegal and Mauritania, which comes onstream next year.

“Tortue Phase 1 is expected onstream next year, so we will see 2.4 mmtpa of supply growth in the short term,” Thom said. “With easy access to European markets deepwater gas in Senegal-Mauritania offers significant potential in what are relatively stable and supportive countries.”

Mozambique LNG plays vital role

Thom also cited several LNG and FLNG projects in Mozambique as key to the future success of the continent’s LNG export aspirations. These include Coral Sul FLNG which shipped its first cargo in November 2022 as well as Rovuma LNG and Mozambique LNG both having stalled.

“Mozambique needs improved security to resume construction of onshore LNG facilities,” Thom said. “Rovuma and Mozambique LNG central to a potential doubling of African LNG supply by 2035, there is a risk that exports could flatline longer term if these projects fail to materialise.”

African Upstream capex by country

Oil trending down but deepwater projects offer hope

With gas projects in the ascendency, Thom told delegate that oil production in traditional hubs across Africa will struggle to offset production declines at mature assets. Big oil players such as Nigeria, Angola, and Egypt as a group will see oil production flatline as we move towards the end of the decade.

“With the global upstream trend firmly focused on advantaged resources, it is inevitable oil production will be affected in higher cost and higher emitting assets in Africa,” Thom said. “However, there could still be some upside from reserve growth or yet-to-find resources. TotalEnergies recent discovery at Ntokon in Nigeria is a great example where new oil discoveries drive incremental growth. And the exploration success in Namibia underlines how deepwater exploration can generate strong investment opportunities.”

A dynamic panel discussion on the second day of the Critical Minerals Africa (CMA) 2023 summit will explore the current landscape for investing in Africa’s critical minerals sector, as the global energy transition, geopolitical considerations and supply chain disruptions continue to impact the development of new projects.

Under the theme, Investing in African Critical Minerals and Rare Earths Projects Today, the panel will address the challenges, opportunities and strategies associated with investing in Africa’s critical minerals – and specifically, the Rare Earth Elements (REE) – sector, providing unparalleled insights into the region’s resource potential and its role in meeting rising demand for these essential resources.

Panelists include Jude Kearney, Chair of the Sub-Saharan Africa Committee for the Export-Import Bank of the United States and Managing Partner of ASAFO & Co., US Office; Lloyd Pengilly, Chairman of Qora Capital, South Africa; Patricia Rodrigues, Associate Director at Control Risks; Nick Mitchell, Chief Operating Officer of Renergen; Jonathan Veeran, Partner at Webber Wentzel, South Africa; and Petur Georgesson, Founder and CEO of Technology Metals Market. The panel will be moderated by Olivier Barbeau, Managing Partner and EMR Leader for Africa at Moore Global.

Uniting multi-sectoral expertise from financiers, project developers, consultants and trading platforms, the panel will discuss forecast shifts in critical minerals supply and demand curves between now and 2050, identify the most interesting critical minerals projects taking place on the continent and evaluate how these projects have been able to progress through various stages of development to generate returns for investors.

Panelists will also examine the role of partnerships among governments, companies and local communities in ensuring successful and responsible investments in the sector, as well as fiscal and policy incentives conducive to attracting and retaining investments in the sector.

As global players make strides towards transitioning to a cleaner energy future, demand for critical minerals – which are essential for the production of lithium-ion batteries and associated technologies behind solar and wind components and renewable power systems – is projected to grow 500% by 2050.

As such, investment has begun to accelerate towards the mining and green mining industries, with South Africa well positioned to seize this opportunity.

Accounting for 60% of the world’s manganese supply; 75% of platinum and 40% of palladium as well as boasting significant quantities of rare earth elements (REE), investing in South Africa’s critical mineral resources will not only trigger economic opportunities such as job creation, revenue generation and the acceleration of the Just Energy Transition, but will be key for diversifying global supply chains and reducing prices: a goal set out by countries worldwide.

Speaking in an interview with eNCA about the upcoming African Critical Minerals Summit (ACMS) – taking place in Johannesburg from 6th – 7th November, James Chester, Senior Director of ACMS organizer Energy Capital & Power (ECP), stated that, “The ground has already been laid for deal making with South Africa in this sector. There is a group of 11 countries – the Mineral Security Partnership (MSP) – which was announced in 2022. This is a group of developed countries that are looking for projects across the world so that they can diversify their supply chain. There are billions of dollars waiting to be invested in South Africa and across Africa. We need to create the environment where that money can come in and those projects can be executed.”

Representing a US-led initiative that aims to bolster supply chains while catalyzing investment from Government and the private sector, the MSP is seeking alternative investment opportunities, focusing on minerals such as cobalt, nickel, lithium as well as the 17 REEs, and all attention has turned to South Africa. Amid concerns over market overreliance and supply bottlenecks, the MSP is looking at investing in Africa’s entire mineral value chain.

Stepping into this picture, the ACMS will connect private sector investment with public sector stakeholders, laying the foundation for new deals to signed across the market. The ACMS was officially launched in Johannesburg on April 14 at a networking event that united high-level public and private sector stakeholders. The Summit itself is scheduled to take place on November 6-7, hosted by South Africa’s Department of Mineral Resources and Energy, and will welcome African and global delegates to discuss the role that Africa’s mineral resources will play in accelerating the global energy transition, while addressing energy security concerns and advancing socioeconomic growth across Africa.

According to Chester, “It is the Department of Mineral Resources and Energy that is really driving this initiative. They want to put forward that they have a plan for critical minerals and want to articulate that further in November,” adding that, “The energy transition is here and it is the role of the private sector, together with the public sector, to ensure that people and businesses are ready for that, and that South Africa takes advantage and is not in the position of following the rest of the world, but actually leading the rest of the world.”

Zimbabwe will this year experience a significant spread in the range of minerals it produces and exports, plus a rise in production from existing mineral contributions as the mining sector paces up towards the attainment of the US$12 billion target worth of production as set by President Mnangagwa.

Mines and Mining Development Minister Winston Chitando has noted that at least 13 new mines and expansion of existing mines are set to be commissioned this year in what could go down as the most eventful year in terms of the rolling out of new mining development, with output adjusted for inflation rising almost fivefold during the first five-years of the Second Republic.

The coming into production of this new mining development is sure to give impetus to the attainment of an empowered upper-middle income economy by 2030 as envisioned by the President and for which the mining sector is poised to play a huge enabling sectoral role.

Mines globally are notorious for having long incubation periods from their conception, through the exploration, mine development and into final sustainable production and the early coming into production of these projects signifies the high speed with which the Second Republic is pushing production and economic development.

Lithium, which is currently enjoying a global boom owing to the rapid demand for batteries for existing electronic and ICT equipment and now the green energy demand that has seized the world, think of the switch to electric vehicles, and for which Zimbabwe has immediately drawn up a lithium development plan.

Among those that are in the final stages of setting up their beneficiation plants ahead of entering the export market is Sabi Star Mine which coincidentally had a ground breaking ceremony presided over by President Mnangagwa last year.

Also expected to switch on beneficiation plants and start exporting this year is Arcadia, Bikita Minerals, the Zulu lithium project and Kamaviti (formerly Kamativi Tin Mine).

“There are a number of projects which are coming into commissioning this year, which include some where there was ground breaking but also some where there was no formal ground breaking,” said Minister Chitando.

“From lithium, we do have Sabi Star that was commissioned by His Excellency last year and is coming into production around August. Then we have Arcadia, they are actually shipping their first concentrate this month, that one is done.

“Thirdly, we have Bikita Minerals who are on an expansion and that should be on stream and complete around August this year. We also have Zulu lithium project which is a pilot project targeting 40 000 tonnes concentrate per annum, but the first phase of that project will be ready for production by end of May this year.

“There is also the re-opening of Kamaviti Mine, what we normally call the Kamativi Tin Mine. As we speak, open cast production has started and we expect that plant production starts around July this year.”

Bikita has been mining small quantities of lithium minerals for decades, largely for the glass industry, but has seen huge new investment and a manifold increase in production as batteries become the major user.

Away from lithium, Minister Chitando said there are also going to be production launches at the multi-million-dollar Dinson Iron and Steel Company in Mvuma, new projects in coal and hydrocarbon by Dinson Colliery, South Mining and “an indigenous player”.

Dinson Colliery and South Mining are actually in the final stages of setting up coke battery plants which all will come into production this year to feed steel works and speaks volumes about private capital heeding the Second Republic’s call to invest in local mineral beneficiation. Coal demand will also rise as Zesa commissions its two new 300MW units and starts fixing up the old units at Hwange Thermal.

This local beneficiation, is expected to shore up export earnings as well as creating more jobs down the value chain.

In the diamond subsector both the Zimbabwe Consolidated Diamond Company are on expansion drives that are primed to bear fruit this year.

“We have significant expansion at ZCDC last year they did about 4 million carats, this year they are targeting 6 million carats,” said Minister Chitando.

“Then we have another commissioning at Murowa Diamonds where there is the official commissioning of a US$250 million expansion project.”

The expected diamond production this year will put Zimbabwe into a very exclusive “one tonne” club, countries that can produce more than 5 million carats a year. A carat is exactly one fifth of a gramme, so 5 million carats is one tonne.

In gold, he said, there will be several small to medium ventures coming into production, but the major highlight will be the coming into stream of Dallaglio Investments’ Pickstone Peerless Mine’s expansion.

In platinum, Minister Chitando said Zimplats, which announced a US$1,7 billion expansion, has now finished the construction of a new concentrator to increase production capacity.

Ohmium International, a leading green hydrogen company that designs, manufactures, and deploys advanced proton exchange membrane (PEM) electrolyzer systems, announced the close of a US$250 million Series C growth equity financing. The round was led by TPG Rise Climate, the dedicated climate investing strategy of TPG’s global impact investing platform TPG Rise, and also included participation from Hanover Technology Investment Management and existing investors Energy Transition Ventures and Fenice Investment Group.

The funding will be used to support Ohmium’s expansion to 2 GW in annual manufacturing capacity and the deployment of projects for the company’s growing global customer pipeline in key regions including the U.S., Europe, India and the Middle East. The investment will also provide significant capital to scale Ohmium’s business, including accelerating its pioneering research and development programs to reduce the cost of green hydrogen production.

“Green hydrogen is critical to the rapid decarbonization of hard-to-abate sectors,” said Ahmad Chatila, Chairman and founding investor of Ohmium and Managing Partner of Fenice Investment Group. “Ohmium is uniquely positioned to be a leading provider of emissions-free hydrogen technology given its customer-focused, modular solution that enables businesses to achieve an extremely competitive levelized cost of hydrogen (LCOH). We are delighted to partner with experienced clean technology investors like TPG Rise Climate to make large scale green hydrogen production a reality today.”

“Ohmium’s cutting-edge PEM electrolyzer systems are crucial to enabling the green hydrogen industry, satisfying a wide range of commercial applications and delivering superior value in terms of current density, scalability, ramp rate, and safety,” said Ed Beckley, Partner at TPG and senior member of the TPG Rise Climate investing team. “At a time when the market lacks sufficient reliable supply of electrolyzers, we are pleased to lead the company’s latest funding round and partner with the team to scale its delivery capability.”

Both Beckley and Mariana Popa, a Principal at TPG Rise Climate, will join Ohmium’s Board of Directors as part of the transaction.

“Ohmium is experiencing tremendous success in 2023. We are on track to deliver our PEM electrolyzer systems to customers worldwide operating across multiple sectors,” said Arne Ballantine, CEO of Ohmium. “This capital raise is a validation of Ohmium’s strategy and technology leadership and provides our organization with the kind of investment needed to deliver on our ambitious plans for international growth.”

Barclays and BofA Securities served as placement agents and Skadden, Arps, Slate, Meagher & Flom LLP and Spice Route Legal served as legal counsel to Ohmium in relation to the transaction. Kirkland & Ellis LLP served as legal counsel to TPG.