The Lubu coking coal project, in Zimbabwe – owned by London-listed natural resource development company Contango Holdings – produced its first washed coal on May 23.
This followed dry and wet runs of the wash plant over the preceding days and the integration of the screen with the broader processing facilities.
"This is a landmark moment for Contango. It is no small feat to bring a mine into production and something most junior mining companies never achieve.
"I appreciate this process has taken longer than expected, but we are now producing a high-quality coking coal product and very soon will be a revenue-generating company," comments CEO Carl Esprey.
Stockpiles of coking coal have already been established by the Wirtgen surface miner, which, as previously reported, can mine at a rate of up to 1 000 t/h of coking coal. The surface miner continues to extract coking coal and is increasing the wash plant stockpiles further.
Contango says it will continue to undertake studies on washed coal production to ensure optimisation. Samples will also be sent to several parties who have indicated they will look to enter into long-term offtake contracts.
This includes the company’s potential strategic partner under a memorandum of understanding and complements Contango’s existing offtake for 10 000 t a month of washed coal.
All coking coal produced, including coal dispatched as samples, will be sold at factory gate.
Esprey says the company will now focus on how best to expand options at Lubu.
"We have advised previously we intend on manufacturing coke at Lubu, which is expected to increase our margins from $80/t to over $300/t at current pricing. We have continued to pursue this avenue in discussions with potential strategic partners.
“The sheer scale of Lubu opens up significant potential across a variety of revenue streams and we intend to focus on unlocking the potential of Lubu from this very solid foundation,” he states.