• Tue. Apr 23rd, 2024

Contango Holdings finally starts production

ByEconomic Times

May 25, 2023

By ETimes

The Lubu coking coal project, owned by London-listed natural resource development company Contango Holdings has begun producing washed coal.
 
This followed dry and wet runs of the wash plant over the preceding days and the integration of the screen with the broader processing facilities.
 
Carl Esprey, the chief executive of Contango Holdings, commented, “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.”
 
According to the miner, stockpiles of coking coal have already been established by the Wirtgen Surface Miner, which, as previously reported, can mine at a rate of up to 1,000 tonnes per hour of coking coal. 
 
“The Surface Miner continues to extract coking coal and is increasing the wash plant stockpiles further,” the company said in a production update.
 
Contango says it will continue to undertake studies on washed coal production to ensure optimisation. Samples will also be sent to several parties who have indicated they will look to enter into long-term offtake contracts.
 
This includes the company’s potential strategic partner under a memorandum of understanding and complements Contango’s existing offtake for 10 000 t a month of washed coal.
 
All coking coal produced, including coal dispatched as samples, will be sold at factory gate.
 
All coking coal produced according to the statement, including coal dispatched as samples, will be sold at factory gate, with the current Minerals Marketing Corporation of Zimbabwe (MMCZ) price still set at US$120 per tonne.
 
The miner had initially scheduled the end of the 2023 first quarter as the day of first production but the chief executive officer acknowledged that the process took longer than anticipated.
 
“I appreciate this process has taken longer than expected, but we are now producing a high-quality coking coal product and very soon will be a revenue generating company. We have achieved this during turbulent markets and without significant dilution, which is testament to the team assembled in country and the attractiveness of the Lubu Project,” Mr. Esprey continued.
 
Lubu Coal said it will continue to undertake studies on washed coal production to ensure optimization and samples will also be sent to several parties who have indicated they would look to enter into long-term offtake contracts.
 
The focus for the company is now how to best expand operations at the mine while leveraging off their producer status.
 
Mr. Esprey added that, “We have advised previously we intend on manufacturing coke at Lubu, which is expected to increase our margins from US$80 per tonne to over US$300 per tonne at current pricing. We have continued to pursue this avenue in discussions with potential strategic partners.
 
“The sheer scale of Lubu opens up significant potential across a variety of revenue streams and we intend to focus on unlocking the potential of Lubu from this very solid foundation.”
 
The company added that, “This includes the company’s potential Strategic Partner under a Memorandum of Understanding and complements Contango’s existing offtake for 10,000 tonnes a month of washed coal.”
 
Lubu Coal mine expects to announce the first sales of washed coking coal in June 2023 – Harare

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