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Mnangagwa opens new coal mine in Binga

by Staff reporter
31 Jul 2023 at 06:55hrs | Views
IT will be a historic moment for Binga District today as President Mnangagwa is set to commission the new Muchesu Coal Mine project, a game-changing investment being undertaken by a British investor, Contango Holdings, which is expected to create massive job opportunities for locals.

A strategic coal asset in Southern Africa with over 2,6 billion tonnes of coking and thermal coal, the Muchesu Coal investment comes at a time when the Government under the Second Republic is taking deliberate steps to develop Binga in line with the devolution agenda, which aims to ensure inclusive development across the country.

President Mnangagwa will lead the commissioning of the project, which amplifies the broader transformation of Binga and the entire Matebeleland North province in line with the philosophy of ensuring that "no one and no place is left behind" in terms of development.

Through exploiting its huge untapped coal deposits, Binga, which shares the borders with Hwange, Lupane, and Gokwe districts, is primed to leapfrog development and increase its contribution to the mainstream economy through enhanced economic activities covering mainly tourism, mining, fishing and agriculture.

Binga's economic prospects and its attractiveness to potential investors will receive strategic significance from today's event, Minister of State for Matebeleland North Provincial Affairs and Devolution, Richard Moyo, said in an interview.

"We are excited with the level of investment that Muchesu has laid out in Binga. For us we look at it as a huge selling point for the region in that it shows that Binga and the entire region is a safe investment destination," said Minister Moyo.

He said investors who have been reluctant to do business in Matebeleland and the country will now have confidence in investing in the country which is fast becoming an investment destination of choice in the region and beyond.

Minister Moyo said Muchesu investment is a confirmation that the Second Republic is not only promoting friendly business policies but is also creating an enabling environment.

"When President Mnangagwa came to power, he promised to bring in new investments in all sectors of the economy and re-open mines and we are now witnessing the fruits of his pledge," he said.

Minister Moyo said the new Binga mine is employing a number of locals and the communities are happy with the development.

"Binga's economic outlook is therefore bright as indications are that more investors will be attracted to the district especially those to benefit from downstream industries," said Minister Moyo.

According to Contango, the domestic and international demand and supply dynamics remain highly favourable for coal and coke products with record prices observed since 2022.

Last year the global prices reached approximately $450 per tonne for thermal coal, $600 per tonne for coking coal and $650 per tonne for coke.

Muchesu commenced production of washed coking coal in May this year following the installation and commissioning of the wash plant. A larger static screen was installed shortly after to improve production capacity.

Early this month, the London Alternative Investment (AIM)-listed miner — clinched another lucrative new 20 000 tonnes per month of washed coking coal off-take arrangement with TransOre International FZE (TransOre) from this flagship project. TransOre is a United Arab Emirates (UAE) registered entity managing a portfolio of global commodity supply chains and has pledged to play a central role in the Binga coal project for the benefit of Zimbabwe. It facilitates the marketing, processing, financing and transportation of essential raw materials.

The scope of the new washed coking coal arrangement is dependent on the existing washing capacity at the mine site. However, in the event Muchesu is able to increase washing capacity further, TransOre has indicated its willingness to expand the size of the contract.

The TransOre contract is expected to replace the non-exclusive contract with AtoZ Investments (Pty) Ltd and is intended to complement the expected off-take arrangements being finalised with the global multi-national company, which is expected to complete its due diligence shortly.

The first off-take signed with AtoZ Investments (Pty) Ltd was to purchase 10 000 tonnes per month of washed coking coal.

Recently, Muchesu indicated that it was inundated with prospective buyers for coke and subsequent by-products.

The mining house started production recently and is one of the transformative development strides in Matebeleland North province given its impact on jobs, community development and downstream industries.

Coal mining is expected to contribute significantly to the realisation of the US$12 billion mining industry by the end of this year.

Completed coking coal tests confirm high-quality coking coal/coke products that can be sold globally.

It projects favourable demand/supply outlook for coking coal and coke products in the Southern Africa region and globally. The mining entity also intends to unlock the full value chain at Muchesu through phased developments to become a fully integrated coke producer in mid-2024.

According to the mining house, it has also identified and visited existing coke batteries in China and is in the process of finalising potential development scenarios.

Muchesu Mine chief executive officer, Mr Carl Esprey, has described the development as a "landmark moment" with significant potential across a variety of revenue streams.

He said the firm intends to focus on unlocking the potential of Lubu from this very solid foundation.

"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," he said.

Source - The Chronicle
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