Contango Holdings Plc, a natural resource development company, has announced that the production of washed coking coal has commenced at its flagship Lubu Coking Coal Project in Zimbabwe
Stockpiles of coking coal have already been established by the Wirtgen Surface Miner which can mine at a rate of up to 1,000 tonnes per hour of coking coal.
The company will continue to undertake studies on washed coal production to ensure optimisation and samples will also be sent to several parties who have indicated they would 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. The company expects to announce the first sales of washed coking coal in June 2023.
Carl Esprey, CEO of Contango, remarked, “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. 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 at the plc level, which is testament to the team assembled in country and the attractiveness of the Lubu Project.
“The focus for the company is now how to best expand operations at Lubu, leveraging off our producer status. We have advised previously we intend on manufacturing coke at Lubu, which is expected to increase our margins from US$80/tonne to over US$300/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.”