Historic moment for Binga’s coal project

IT will be a historic moment for Binga District today, as President Mnangagwa is set to officially commission the new Muchesu Coal Mine project, a game-changing investment being undertaken by a British investor, Contango Holdings, which is expected to create massive job opportunities for locals.

A strategic coal asset in Southern Africa with over 2,6 billion tonnes of coking and thermal coal, the Muchesu Coal investment comes at a time when the Government under the Second Republic is taking deliberate steps to develop Binga in line with the devolution agenda, which aims to ensure inclusive development across the country.

President Mnangagwa would lead the official commissioning of the project, which amplifies the broader transformation of Binga and the entire Matabeleland North province in line with the philosophy of ensuring that “no one and no place is left behind” in terms of development.

Through exploiting its huge untapped coal deposits, Binga, which shares the borders with Hwange, Lupane, and Gokwe districts, is primed to leapfrog development and increase its contribution to the mainstream economy through enhanced economic activities covering mainly tourism, mining, fishing, and agriculture.

Binga’s economic prospects and its attractiveness to potential investors will receive strategic significance from today’s event, Minister of State for Matabeleland North Provincial Affairs and Devolution, Richard Moyo, said in an interview.

“We are excited with the level of investment that Muchesu has laid out in Binga. For us we look at it as a huge selling point for the region in that it shows that Binga and the entire region is a safe investment destination,” said the minister.

“Investors who had been reluctant to do business in Matabeleland and the country will now be energised by Muchesu Coal to also invest.”

Minister Moyo said the confidence shown by Muchesu is a firm confirmation that the Second Republic is promoting friendly economic policies for all provinces to benefit.

“When President Mnangagwa came to power, he promised to bring in new investments in all sectors of the economy and re-open mines, we are now witnessing his pledge coming to fruition,” he said.

“The mine is employing a lot of locals and we are happy with that. So, Binga’s economic outlook is bright,” added Minister Moyo.

According to Contango, the domestic and international demand and supply dynamics remain highly favourable for coal and coke products with record prices observed since 2022.

Last year, the global prices reached approximately US$450 per tonne for thermal coal, US$600 per tonne for coking coal, and US$650 per tonne for coke.

Muchesu commenced production of washed coking coal in May this year following the installation and commissioning of the wash plant. A larger static screen was installed shortly after to improve production capacity.

Early this month, the London Alternative Investment (AIM)-listed miner clinched another lucrative new 20 000 tonnes per month of washed coking coal off-take arrangement with TransOre International FZE (TransOre) from this flagship project. 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 Muchesu 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 off-take arrangements being finalised with the global multi-national company, which is expected to complete its due diligence shortly.

The first off-take signed with AtoZ Investments (Pty) Ltd was to purchase 10 000 tonnes per month of washed coking coal.

Recently, Muchesu indicated that it was inundated with prospective buyers for coke, and subsequent by-products.

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.

Coal mining is expected to contribute significantly to the realisation of the US$12 billion mining industry by the end of this year.

Completed coking coal tests confirm high-quality coking coal/coke products that can be sold globally.

Hence, the investor expects its first revenue from the sale of coking coal in the third quarter of the year and is looking forward to finalise coke manufacture development scenario in H2 2023.

It projects favourable demand/supply outlook for coking coal and coke products in the Southern Africa region and globally. The mining entity also intends to unlock the full value chain at Muchesu through phased developments to become a fully integrated coke producer in mid-2024.

According to the mining house, it has also identified and visited existing coke batteries in China and is in the process of finalising potential development scenarios.

Muchesu Mine chief executive, Mr Carl Esprey, has described the development as a “landmark moment” with significant potential across a variety of revenue streams.

He said the firm intends to focus on unlocking the potential of Lubu from this very solid foundation.

“This is a landmark moment for Contango. It is no small feat to bring a mine into production and something most junior mining companies never achieve,” he said.

Following a directive by President Mnangagwa, Government departments have scaled up the momentum towards developing Binga District, which had lagged behind for years in terms of development.

Other projects, which the Government okayed for implementation include the rehabilitation of roads, the construction of a vocational training centre, and a new border post, the setting up of a nursing school at Binga Hospital, as well as the refurbishment and operationalisation of the hospital mortuary.

To tap into its natural resources, the Binga local board is soliciting investors to partner with it to develop the sand beach, and a commercial complex, a development set to further unlock and promote economic growth in the district as it will draw in tourism and other business opportunities.

The local board has unveiled a lakefront tourism piece of land measuring approximately five hectares.

-herald