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Nov 30 (Reuters) – London-listed Contango Holdings ( CGO.L ) plans to start exporting thermal coal from its Zimbabwe mine early next year following requests from customers in Europe and Asia, the company said on Wednesday.
Zimbabwe’s neighbor South Africa saw coal exports to Europe rise eightfold during the first half of 2022, after the European Union banned coal imports from Russia as part of sanctions over its aggression in Ukraine.
Coal prices had already started to rise before the conflict as some European countries switched from expensive natural gas to coal despite global commitments to move away from the polluting mineral.
Contengo owns 70% of the Lubu project in the coal-rich Hwange district of western Zimbabwe. The company’s main focus is to supply its low-sulphur coking coal to the South African ferroalloy and industrial markets, but it finds current prices for thermal coal used in power generation attractive.
The company said it had received “unsolicited approaches” for thermal coal from buyers ranging from trading houses to industrial customers in Africa, Europe and Asia.
“Due to the dramatic rise in thermal coal prices over the last 12 months… the board is now considering a coking and thermal operation, which will deliver 10,000 tonnes of coking coal and 10,000 tonnes of thermal coal per month in H1 2023 based on current capacity,” Contango said in a statement. said.
Contango, which plans to increase its annual production to 300,000 tonnes by the end of 2023, said it recently raised 7.5 million pounds ($9 million) through a private placement to fund its operations.
($1 = 0.8340 pounds)
Reporting by Mark Potter Editing by Nelson Banya
Our Standards: The Thomson Reuters Trust Principles.
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