Contango inks fresh Lubu coal deal
LONDON-listed natural resource development company, Contango Holdings, has entered into an offtake agreement with Gulf firm TransOre International FZE (TransOre) for the sale of 20 000 tonnes of washed coking coal per month from its Lubu project in Zimbabwe.
TransOre is a United Arab Emirates (UAE) registered entity managing a portfolio of global commodity supply chains It sources bulk commodities from low-cost regions in Sub-Saharan Africa and supplies high-demand markets in Europe, and the Middle East.
According to Contango the offtake price of the coking coal will be US$120 per tonne as prescribed by the Minerals Marketing Corporation of Zimbabwe (MMCZ).
This contract has been sealed at a time when Contango is finalising another off-take deal with a global multinational company.
According to Contango, TransOre will take the coal from Muchesu (Lubu Project) mine gate and handle all logistics through its affiliate African Rail International FZE, which has rail access, locomotives, and port access for export already in place.
TransOre currently holds special dispensation allowing it to export coal through the dry bulk terminal at the Maputo Port, Mozambique, and has since expressed interest in taking any additional coal that becomes available, either in the event of mine expansion or if the expected contract with the multinational company does not materialise.
The TransOre contract is expected to replace the non-exclusive contract with AtoZ Investments (Pty) Ltd previously reported by Contango on 14 June 2022.
“We are delighted to enter into this offtake contract with TransOre, doubling our existing offtake and replacing our non-exclusive offtake with AtoZ. We have been in discussion with TransOre for some time and have been impressed by their operations and network.
“They bring a sizable logistics operation, which we believe is more aligned with Contango’s objectives moving forward as we develop our world-class Muchesu project,” said Contango Chief Executive Officer Carl Esprey.
Mr Esprey added saying “These discussions are centered on a larger coke operation at Muchesu (Hwange). We expect to deliver further samples of our washed coal to the MNC later this month as part of the final stages of due diligence on the coke qualities of our product
TransOre Chief Commercial Officer Alexander Schamber said TransOre and its affiliate companies were very active throughout Southern Africa and would leverage on existing infrastructure and logistics experience to ensure efficient delivery of coal from the Muchesu project to our customers.
“I am pleased our discussions with Contango have reached a positive conclusion and we have entered into an offtake arrangement for up to 20 000 tonnes per month of washed coking and high-grade metallurgical coal.
“We very much view this as the start of a long-term and larger working relationship as we unlock the value of the Muchesu coal project in a collaborative fashion. We are also excited to play a central role in a project that promises to bring such great benefit to the country of Zimbabwe and its people,” said Mr Schamber.
Zimbabwe holds 553 million tonnes of proven coal reserves as of 2016, ranking 38th in the world and accounting for a significant portion of the world’s total coal reserves of 1,139 billion tonnes.
Zimbabwe has proven reserves equivalent to 163,3 times its annual consumption. This means it has about 163 years of coal left (at current consumption levels and excluding unproven reserves).-herald
