- Business
- No Comment
Contango Signs Coal Sales Deal Potentially Worth $2.4Mln
By Christian Moess Laursen
Contango Holdings said Monday that it has entered into a new agreement with TransOre International for the sale of up to 20,000 metric tons a month of washed coking coal–potentially worth $2.4 million–from the Lubu project in Zimbabwe.
The natural resources company said the contract is priced at the prevailing Minerals Marketing Corporation of Zimbabwe coking coal price, currently $120 a metric ton.
The London-listed company said the order could expand if Contango is able to increase washing capacity further, as TransOre has shown willingness to increase the size of the contract.
The company expects to achieve steady state production in the third quarter, after which the operating costs is expected to be around $45 a ton of washed coal, it said. It expects to report first sales under the deal with TransOre in August, it said.
Contango also said it has raised 1.5 million pounds ($1.9 million) from shareholders to meet the additional capital requirements from the deal.