Contango’s Zimbabwe coking Coal project close to Production
The wash plant construction at Contango Holdings’ Lubu coal project in the northwest of Zimbabwe is complete and production at the company’s new mine is imminent.
Coking coal, or metallurgical coal, is a high-quality grade of coal that is used to produce coke, an essential fuel and reactant in the blast furnace process for primary steelmaking. Most of the coal produced in Zimbabwe today, is thermal coal, used in generating electricity.
London listed Contango, anticipates that once Lubu is in full operation towards the end of this year, it will be able to deliver 10,000t of coking coal and 10,000t of thermal coal per month.
According to Carl Esprey, CEO of Contango, the company also intends to produce coke by installing coke batteries that process coking coal into coke for the industrial and ferro alloy industries.
“We have continued to make excellent progress at the Lubu site as we 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,” says Esprey.
Contango entered into an offtake agreement with a company called AtoZ Investments. According to the agreement AtoZ will purchase about 10,000 tonnes per month of washed coking coal produced at Lubu, at the minimum price prescribed by the Minerals Marketing Corporation of Zimbabwe (MMCZ).
In accordance with the agreement, AtoZ has agreed to take delivery of the washed coking coal at the mine gate and handle all subsequent logistics and marketing, thereby removing associated marketing and transport costs for Contango.
Esprey says that the wash plant construction at Lubu is now complete.
“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 thereafter,” says Esprey.
“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,” adds Esprey.
The concrete lined recirculation and settlement ponds, along with the TCD (tailings control dam) have been built and are currently being lined with concrete prior to their usage.
Wirtgen surface miner deployed (Contango’s Zimbabwe coking coal project close to production)
Contango intends to undertake grade control drilling for 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.
Contango has a 70% interest in the Lubu Coal Project with the remaining 30% held by supportive local partners.
The Lubu Coal Project covers 19,236 hectares of the prospective Karroo Mid Zambezi coal basin, located in the established Hwange mining district in north-western Zimbabwe.
Previous owners of Lubu have spent more than USD20m to identify a sizeable resource of more than 1.3 billion tonnes under NI 43-101 standards.
Contango is currently focussed on mining from Block B2, where extensive work has also been undertaken to define the specific properties of the coal. The coal seams within Block B2 are from surface down to a maximum depth of 47m, thus ensuring operating costs are kept competitive.
Esprey says that the Lubu deposit contains significant quantities of both coking and thermal coal and at Block 2, it is expected that approximately 60% of coal extracted will be thermal coal, whilst 40% will be coking coal.
