Modern Mining July 2020

the cheapest way of moving coal. This method has been used successfully in both the United States and China. It has, however, to be done using a covered ship for it to be environmentally friendly, notes Esprey. “Using the system, coal can be easily moved to Zambia and once there, we can rail to the intended destinations. Using this method, we could eco- nomically sell our product to the DRC to the copper industry, and we would be able to do that with a good margin to ourselves,” concludes Esprey. 

coking coal from the open pit in the southern Africa region to industrial customers. The company may in the future sell thermal coal to the domestic power stations subject to burns tests to be performed by power generation companies when the company can provide sufficient sized samples from the open pit. Logistical challenges The project is not without its challenges. Esprey tells Modern Mining that the biggest issue at this stage is logistics. The deposit is in Binga, some 220 km away from the nearest railing infrastructure, which is in Hwange. However, the high-value of the product (industrial 28CV coal at US$130/t and cok- ing coal at US$90-100/t as of 31 January 2020) will offset costs related to railing and trucking that the mine has to do. “We are looking at three logistical scenarios – one is that some of the high value coal goes to Hwange, and will be trucked at about 220 km. Secondly, we are looking at the chemical industry in Harare, Zimbabwe, including the tobacco industry. These customers will fetch the product from us. Thirdly, we are looking at regional coal sales into Zambia, the Democratic Republic of Congo and South Africa.” For regional sales, Esprey says the company is in discussions with the Zimbabwean government to use Lake Kariba for barging purposes, which is

Focus will initially be placed on the B2 Block where the deposit starts at surface and dips to a maximum depth of 47 m.

Key takeaways  Contango Holdings has listed on the London Stock Exchange following the acquisition, by way of a reverse takeover, of a 70% interest in the Lubu Coalfield Project  Lubu is a derisked development with total historical spend in excess US$20-million and over 100 holes and 12 000 m of drilling completed and total resource in excess of 2-billion tonnes of coal  Contango has acquired the asset for an implied value of £6,4-million  In June 2019, Contango begun advancing funds to commence a new work programme including a nine-hole drill campaign designed to enable full washability test work, determination of product range, SG and grade to determine product types for the purposes of offtake discussions  In total, over US$750 000 has been spent on the project in the recent 12 months  Focus will initially be on a small area of B2 Block in Lubu with deposit starting at surface down to a maximum depth of 47m

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