A world class resource with options for Contango
“…there are a number of groups that wish to purchase coking coal product from Lubu. We can sell to anyone and everyone…”
The wheels are turning on the machinery at the Lubu Coking Coal Project in a remote part of Zimbabwe.
First washed coal came from the asset in May, and in July operator Contango Holdings rolls out a very long red carpet as it welcomes President of Zimbabwe, His Excellency Dr Emmerson Mnangagwa. It’s not just the President, says Contango chief executive Carl Esprey, but the Vice President, the Minister of Mines, the Deputy Minister of Mines, all the local villagers” and also attending the ribbon cutting ceremony are “offtakers, both current and contemplated.”
This should please shareholders as social media speculation about sales and offtakers was overshadowing a ceremony many weeks in the making designed to welcome the ‘Tier’ One project to the country and the local community.
Offtakers ‘plural’ are being mentioned as Esprey explains “certain seams of coal have different characteristics and different offtakers have different requirements for characteristics because coal is not just one homogenous commodity. We can sell to everyone.”
Multiple parties are interested and as the ceremony invitation has been extended to shareholders, investors can eyeball and talk to these potential partners themselves.
Esprey suggests contracts might be of the multi year variety. “This is a 30, 40, 50 year, multi-generational project. It’s two billion tons of coal. This is going to be a continual process of optimization and expansion and optimization and expansion.”
And as Carl tells Sarah Lowther in this podcast “In the end we want to sell coal. We have so much.”
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The author was remunerated but does not hold shares in the company