UK-listed Contango plans thermal coal exports from Zimbabwe in 2023
30/11/2022 14:28
Nov 30 (Reuters) - London-listed Contango Holdings
CGO.L plans to start exporting thermal coal early next year
from its Zimbabwe mine following requests from customers in
Europe and Asia, the company said on Wednesday.
Zimbabwe's neighbour South Africa saw an eight-fold increase
in coal exports to Europe during the first half of 2022, after
the European Union banned coal imports from Russia as part of
sanctions for its invasion of Ukraine.
Coal prices had started rising even before the conflict as
some European countries switched away from expensive natural gas
to coal, despite global commitments to move away from the
polluting mineral.
Contango owns 70% of the Lubu project in western Zimbabwe's
coal-rich Hwange district. The company's main focus is supplying
its low-sulphur coking coal to the southern African ferro alloy
and industrial markets, but it has found current prices of
thermal coal - used in electricity generation - attractive.
The company said it had received "unsolicited approaches"
for thermal coal from buyers, ranging from trading houses to
industrial consumers, in Africa, Europe and Asia.
"Fuelled by the dramatic rise in thermal coal prices over
the past 12 months ... the board are now considering a coking
and thermal operation, delivering 10,000 tonnes of coking coal
and 10,000 tonnes of thermal coal per month based on current
capacity in H1 2023," Contango said in a statement.
Contango, which plans to increase its annual output to
300,000 tonnes by the end of 2023, said it had recently raised
7.5 million pounds ($9 million) through a private placement to
fund its operations.
($1 = 0.8340 pounds)
(Reporting by Nelson Banya
Editing by Mark Potter)
((Nelson.Banya@thomsonreuters.com;))