Muchesu mine investor injects fresh capital
THE Chinese investor who acquired controlling interest in the Muchesu Coal Mine in Binga, Matabeleland Province, has started injecting fresh capital to expand the project.
This comes after United Kingdom-listed Contango Holdings sold 51 percent of its shareholding in the Muchesu coal project and retained a 24 percent stake.
The Chinese investor, Wencai Huo who is based in Zimbabwe, plans to invest US$20 million into the 2,6 billion-tonne colliery project.
Contango said in a statement the investor had hit the ground running after funding the delivery of several capital items, including excavators and trucks that have enabled the stripping of an estimated 20 000 square metres of overburden to enlarge the existing open pit.
“Work will continue to further expand the open pit, given the size of the Muchesu resource.
“Also, the investor has acquired and delivered a Dense Media Separation (DMS) plant to the site,” Contango said.
Concrete foundations of the DMS plant, which has an estimated production capacity of 3 000 tonnes of washed coal per day, have now been laid with installation underway and the investor targeting to operationalise the plant before the end of next month.
Contango chief executive officer Mr Carl Esprey said operationalisation of the DSM plant would enable the washing of material amounts of readily accessible coking coal.
This would market the commencement of royalty payments above and beyond the minimum required under the Mineral Royalty Agreement.
“I am pleased to provide this positive update on operations in Zimbabwe.
“Since entering into the Definitive Agreements in July 2024, just over two months ago, the investor has already committed significant capital into Muchesu and expanded the platform for future production.
“Corporately we have addressed our plc creditors following the advance of US$1 million by the investor against the subscription and have also taken this opportunity to rationalise general and administrative costs going forward.”
“Muchesu is now under new stewardship, although we continue to hold a residual non-operated 24,75 percent interest in Muchesu,” he said.
Matabeleland North is a key region in Zimbabwe’s mining industry serving as a focal point for coal-to-energy value chain investments that are poised to unlock up to US$1 billion in coal and hydrocarbon investments.
Coal is one of the key minerals that the Government designated a few years ago to drive the growth of the country’s economy, which is strategically important to Zimbabwe given that mining accounts for over 75 percent of the national exports while also employing thousands of people.-herald
