Contango gets green light to export coal
LONDON Alternative Investment (AIM)-listed miner — Contango Holdings has received the final coal export permit from the Minerals Marketing Corporation of Zimbabwe (MMCZ) paving the way for the commencement of exports from its flagship Lubu Project in Binga.
Already, the firm has made its first sale to TransOre International FZE, meeting timelines set under its offtake arrangement.
Contango has a 70 percent interest in the Muchesu Coal Mine with the remaining 30 percent being held by supportive local partners. The Lubu coalfield is estimated to hold 2,6 billion tonnes of coal, which makes it one of the largest coal ventures in the country.
Muchesu Coal Mine is one of the signature investment projects under the Second Republic, which is expected to yield high-value benefits for locals and the economy at large
President Mnangagwa recently commissioned the British-owned firm.
In an update on the latest development, the coal firm said TransOre has already taken delivery of the initial coking coal product from the Muchesu mine site.
In July, Contango Holdings clinched another lucrative new 20 000 tonnes per month of washed coking coal offtake arrangement with TransOre International FZE.
TransOre is a United Arab Emirates (UAE) registered entity managing a portfolio of global commodity supply chains and has pledged to play a central role in the Binga coal project for the benefit of Zimbabwe.
It facilitates the marketing, processing, financing and transportation of essential raw materials.
The scope of the new washed coking coal arrangement is dependent on the existing washing capacity at the mine site. However, in the event Contango is able to increase washing capacity further, TransOre has indicated its willingness to expand the size of the contract.
The TransOre contract is expected to replace the non-exclusive contract with AtoZ Investments (Pty) Ltd and is intended to complement the expected offtake arrangements being finalised with the global multi-national company which is expected to complete its due diligence shortly.
The first offtake signed with AtoZ Investments (Pty) Ltd was to purchase 10 000 tonnes per month of washed coking coal.
Reads part of the update: “Contango Holdings Plc, the producing London listed natural resource development company, is pleased to announce the receipt of final approvals relating to the export of coal from the Muchesu Project in Zimbabwe (“Muchesu”) from the Minerals Marketing Corporation of Zimbabwe.
Muchesu Project
“As a consequence, the Company is also pleased to report that it has now made its inaugural sale to TransOre International FZE (‘TransOre’), pursuant to its existing offtake arrangement.
“TransOre has already collected initial coking coal product from the Muchesu mine site and additional trucks will shortly be mobilised to Muchesu by TransOre, which intends to utilise its existing coal export capacity at the ports of Maputo and Beira to export the product to its international clients.”
The mining house started production recently and is one of the transformative development strides in Matabeleland North province given its impact on jobs, community development and downstream industries.
According to the update announcing the TransOre agreement, Contango said it will take the coal currently being produced from the upper seams at Muchesu at the mine gate at the MMCZ price and handle all logistics and transport costs, through its affiliate African Rail International FZE which has rail access, locomotives and port access for export already in place.
TransOre holds an allocation for exporting coal through the Dry Bulk Terminal at the Maputo Port, Mozambique.
The firm has also expressed its interest in taking any additional coal that becomes available, either in the event of mine expansion or if the expected contract with the MNC does not materialise.
Coal mining is expected to contribute significantly to the realisation of the US$12 billion mining industry by the end of this year.
The coming on stream of the mine feeds into the Vision 2030 agenda as hundreds of jobs will be created for locals directly while others will be employed by downstream industries.
Muchesu Coal Mine is one of the signature investment projects under the Second Republic, which is expected to yield high-value benefits for locals and the economy at large.
Matabeleland North has vast mining activities that have been critical to the growth of the province and the country’s development. The province is the hub of coal-to-energy value chain investments, which will unlock up to US$1 billion under the coal and hydro-carbon focus.
Muchesu Coal Mine has already built 20 new homes for relocated villagers while more projects are earmarked to benefit the community.-chronicle
