Contango readies for coal production, sales

CONTANGO Holdings, which owns the Lubu Coal Project in Binga district plans to activate its wash plant and commence the processing of coal in April ahead of subsequent sales under existing offtake agreements.

The first offtake was signed with AtoZ Investments (Pty) Ltd to purchase 10 000 tonnes per month of washed coking coal produced at Lubu.

The London-headquartered firm has a 70 percent interest in the Lubu Coal Project in Zimbabwe, with the remaining 30 percent held by supportive local partners.

Coal is an integral element of the Government’s target to grow mining into a US$12 billion industry by 2023, which would lay a strong foundation for Zimbabwe’s broad vision to transform Zimbabwe to an upper middle-income country by 2030.

Contango said recently that it had received many international inquiries on the possibility of arrangements for the supply of high-quality thermal coal from Zimbabwe following the discovery of huge deposits at Lubu.

In an operational update, the mining house said the wash plant construction is now complete ahead of commissioning and the production of coking coal.

It noted that the refurbishment of the screen, used to sort the coking coal prior to it being fed through the wash plant, is also near completion in Harare and is expected to be delivered to site in early April, with installation immediately afterwards.

“Power to the wash plant and other processing facilities will be connected at the same time, expected to be mid-April.

“In anticipation of this, the Company will connect power to the laboratories this week to enable studies and training to commence,” it said in a statement.

The surface miner Wirtgen 2200 acquired by Contango Holdings

It has previously indicated that once the wash plant is calibrated and operating efficiently, it is expected to be able to produce 20 000 tonnes of washed coking coal per month.

In addition, it said the surface miner (Wirtgen 2200SM) has a cutting width of 2 200mm, is ideal for selective mining, and can mine up to 500 tonnes per hour.

Chief executive officer, Mr Carl Esprey said they have continued to make excellent progress at site as they prepare for imminent first coking coal production and sales.

“Next month we intend to activate our wash plant and commence the processing of coal ahead of subsequent sales under our existing offtake agreements. I look forward to providing additional updates over the next few weeks as we transition from developer to producer,” he said.

The coal mine recently received key components of the plant. Picture cred: @ContangoPlc

The firm added that it intends to undertake grade control drilling for approximately eight days in early April to help ensure the subsequent extraction and processing of the coking coal is optimised, following which, the Wirtgen surface miner will recommence operations and extraction of coal.

The Lubu Coal Project covers 19 236 hectares of the highly prospective Karroo mid-Zambezi coal basin, located in the established Hwange-Binga mining area in north-western Zimbabwe.

In order to associate with the locals, the miner has now renamed the Lubu project to Muchesu Coal.

Muchesu is the local village in the broader Lubu region and Contango has recently taken delivery of new plant and machinery.

A surface miner Wirtgen 2200, which has a cutting width of 2200 delivered at Lubu coal project site Picture Credit: @ContangoPlc

The new coal-mining project was previously owned by the Consolidated Growth Holdings before Contango entered into a process of acquiring agreements in December 2017.

The previous owners spent more than US$20 million on Lubu, which has enabled a sizable resource in excess of 1,3 billion tonnes to be identified under NI 43-101 standard.-chronicles