UK firm acquires 70pc of Hwange coal project
By Pride Mahlangu
A United Kingdom-based firm, Contango Holding Plc has conditionally acquired 70 percent of the Lubu Coal project (Lubu) located in Hwange district in Matabeleland North.
In a statement, Contango said the attaining of Lubu coal project would be subject to regulatory and shareholder approval next month.
“Contango has conditionally acquired the Lubu Coal Project in Zimbabwe, subject to regulatory and shareholder approval in February 2020.
“Upon completion of the transaction, Contango will hold a 70 percent interest in the Lubu, with the remaining 30 percent held by supportive local partners,” it said.
The Lubu coal-mining project was previously owned by the Consolidated Growth Holdings before Contango entered into heads of acquiring agreements in December 2017.
The previous owners spent more than US$20 million on Lubu, which has enabled a sizeable resource in excess of 1,3 billion tonnes to be identified under NI 43-101 standard.
Contango said it will focus on producing metallurgical coal from Block B2 where extensive work has also been undertaken to define the specific properties of the coal, which in turn has enabled offtake conversations to commence.
“The coal seams within Block B2 are from surface down to a maximum depth of 47 metres, ensuring operating costs are kept at very attractive levels.
“Contango intends on utilising contract miners initially to minimise any capital expenditure requirement, ahead of first production in second half of 2020, with the aim of selling and exporting the metallurgical coal products to international industrial consumers in the Southern Africa region,” it said.
In the long-term, Contango said it may review, fully developing the coal field to exploit the thermal coal opportunities subject to an improvement in the investment climate in the country.
This year, the company plans to take steps towards refurbishing existing facilities as well as repairing and expanding infrastructure.
The UK-headquartered firm said some of its steps during the year would be to sell metallurgical coal to Southern African industrial markets and providing thermal coal to regional power companies to enable them conduct “burn tests” before entering into any long-term purchase agreements.
Coal remains the dominant energy mineral for Zimbabwe and the country boasts of vast reserves of the mineral particularly in the north-west and southern parts of the country. The Chronicle
