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LONDON Alternative Investment (AIM)-listed miner Contango Holdings says it is receiving numerous inquiries from various groups interested in potential Joint Ventures or purchasing the mine.
The company which operates in Binga district notes that ongoing collective offtake discussions indicate a demand of over 50 000 tonnes per month.
It is currently evaluating all potential options and is open to exploring opportunities that will benefit the company and its stakeholders.
Contango has a 70 percent interest in the Muchesu Coal Mine with the remaining 30 percent being held by supportive local partners.
The coalfield is estimated to hold 2,6 billion tonnes of coal, which makes it one of the largest coal ventures in the country.
In a latest operational update it said following a capital raise of £940,000 in early April 2024, the firm has resumed on-site operations to meet requests from potential offtake customers for samples.
“Since the placing, 120 tonnes of product have been mined, screened and washed for two new potential industrial customers in the southern African region. These potential off takers have arranged to collect the two 60-tonne samples this week. Additional samples had already been sent to other identified potential off takers prior to the Placing,” reads part of the update.
Continuing offtake discussions collectively indicate a demand exceeding 50 000 tonnes per month it added noting that while not all discussions are expected to yield positive outcomes, the company anticipates several contracts to materialize from interested parties by June 2024, including ongoing discussions regarding coking coal offtake.
Contango’s strategic focus extends beyond coking coal, with thermal coal production identified as a potentially lucrative revenue stream.
An additional 250 tonnes of thermal coal has been extracted and is scheduled for collection by a potential offtake partner for a ‘burn test’ next week.
The firm is optimistic about entering into a substantial long-term thermal offtake contract if the test results meet expectations.
Late last year, the firm said it had identified thermal coal production as a potentially lucrative revenue stream it seeks to explore with the mining entity indicating it has received several unsolicited approaches from buyers globally.
At the time it indicated that it had received several unsolicited approaches from buyers of thermal coal ranging from trading houses to industrial consumers from Africa, Europe and Asia.
“In conjunction with these operational developments the Company remains engaged with several groups which have expressed interest in a potential Joint Venture and / or purchase of the mine.
“The Company continues to supply further information to these parties as part of their ongoing due diligence.”
Shareholders will constantly be updated on both operational and corporate developments as they materialise.
Muchesu Coal Mine stands as a significant investment project under the Second Republic, expected to deliver substantial benefits for locals and the broader economy.
Matabeleland North is a key region for mining activities that have played a pivotal role in the province’s growth and the country’s overall development.
The province serves as a focal point for coal-to-energy value chain investments, poised to unlock up to US$1 billion in coal and hydrocarbon investments.
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