• Mon. Apr 15th, 2024

Lubu to make first coal sale this month

ByEconomic Times

Mar 7, 2023

By ETimes

London listed miner Contango Holdings which is exploring Lubu coal resources in Hwange said in the financial year ending November 2022, the company made huge strides towards making its first coal and coke sale.
According to the company, metallurgical coal and coke tests undertaken through installed 1 tonne per hectare test plant confirmed the excellent quality of coal from Lubu further strengthening Contango’s position to complete additional offtake agreements.
Carl Esprey, chief executive of Contango Holdings, said, “We expect Contango to transition into cash flow towards the end of the current quarter with first sales of coking coal. Lubu’s advancement over recent months has been facilitated by the successful £7,5 million fundraising during the period, which has enabled investment in building mining and processing operations.”
The company also advised that construction of a small-scale coke battery has been completed at the Lubu Coal Project in Zimbabwe.
The pilot coke plant has been constructed to provide on-site capability to manufacture coke from washed coking coal produced at Lubu for testing by future offtake partners and for the company’s internal studies and quality control.
The ultimate coke batteries to be installed at Lubu for future production and sales will be considerably larger and a different specification.
“Whilst the expected margins on our coking coal production are very attractive, we have always maintained the highest margin business stems from the manufacture of coke at Lubu.
“The completion of the pilot coke plant will now enable us to generate larger coke production for testing, something required to enable us to conclude discussions under our MOU and, as required, provide additional samples to other parties who have expressed interest in coke produced from Lubu,” said Esprey.
Expansion of production strategy to include both thermal coal and coke development scenarios to provide additional near-term high value revenues streams were undertaken in the period under review.
Esprey added that, “These development initiatives are now reaching their conclusion, with the wash plant now at site and being assembled ahead of commissioning.
“Once calibrated and operating efficiently the wash plant is expected to be able to produce 20 000 t of washed coking coal per month which will satisfy its first offtake partner, AtoZ Investments, and also provide sufficient supply to secure further offtakes for our coking coal.”
Contango’s operating subsidiary was declared the winner of the 2022 Excellence in Community, Empowerment & Social Impact Award recognising its work at Lubu.
The chief executive said he reiterates his excitement and enthusiasm for what is in store for Contango over the coming weeks and months and they transition into a fully-fledged and cash generative production company – Harare


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