Modern Mining October 2023

“So, until there’s a new technology, coking coal remains an imperative for the industrial sector and the global economy, which relies heavily on coal to drive it.” Contango was met with fund raising challenges ahead of developing the $10m Muchesu Coal Project. “Fortunately, we have a combination of support ive shareholders, high net worth individuals and smaller-scale investors who believed in the attrac tiveness of the Muchesu Coal Project and invested in its development.” He explains that aside from the $10m dollars spent on upgrading the resource, the previous own ers also invested more than $20m developing the Muchesu Coal Project, with the result that the com pany has a sizeable resource of more than 1.3 billion tonnes. Currently, Contango is focused on mining from Block B2, where extensive work has been under taken to define the specific properties of the coal. The coal seams within Block B2 are from surface down to a maximum depth of 47 m, thus ensuring operating costs are kept competitive. The miner has an off-take agreement with TransOre International for the sale of up to 20 000 tonnes per month of washed coking coal. The TransOre contract is priced at the prevail ing Minerals Marketing Corporation of Zimbabwe (MMCZ) coking coal price, currently at $120/tonne. “TransOre takes the coal currently being pro duced from the upper seams at Muchesu at the

MMCZ price and handles all logistics and transport costs through its affiliate African Rail International, which has in place rail access, locomotives and port access for export. TransOre currently holds an alloca tion for exporting coal through the Dry Bulk Terminal at the Maputo Port, Mozambique. The company has also expressed its interest in taking any additional coal that becomes available, either in the event of mine expansion or if expected contracts with other offtake partners do not materialise,” says Esprey. He adds that once steady state production is achieved in Q3 2023, its operating costs will be lower, around $45 per tonne of washed coal. Aside from exploring options to further reduce its operat ing costs, the company expects larger volumes to deliver economies of scale. Displacing Australian coking coal exports The United Kingdom-based natural resource devel opment company is looking to displace a large chunk of coking coal supplied by Australian miners to regional mills with its own high-quality product as it targets industrial sectors in South Africa, Zambia, and the Democratic Republic of Congo. The LSE-listed coal miner is targeting key destina tions mining chrome, copper and iron. “We have a range of high phosphorus and low phosphorus coking coal – low phosphorus is suit able for the steel industry while high phosphorus product is suitable for copper and chrome smelters. Moreover, we wash our coal to meet the coal quality that customers require. But, with the washing and

Contango recently delivered first coal production.

“Until there’s a new technology, coking coal remains an imperative for the industrial sector and the global economy, which relies heavily on coal to drive it.”

Coking coal remains an imperative for the industrial sector and the global economy.

October 2023  MODERN MINING  11