Contango Holdings Plc, the developer of the Muchesu Coal Project in Zimbabwe, has announced the receipt of an additional US$500,000 in royalty payments since February 2025.
By Ryan Chigoche
This brings total royalties received under the Mineral Royalty Agreement (MRA) with Huo Investments (Pvt) Limited to US$1,000,000.
The agreement stipulates a minimum annual royalty payment of US$2,000,000, with expectations that actual receipts will significantly exceed this amount.
The second tranche of US$1,000,000 is currently being finalised between the parties.
Commenting on the development, Carl Esprey, the CEO of Contango, said:
“We have now received US$1,000,000 in royalty payments under the MRA. These royalty payments strengthen the Company’s capital position and reaffirm the investor’s commitment to Muchesu. Work and capital investment have continued at Muchesu since our last update, including the commencement of installation of coke batteries. An additional RNS will be made addressing operational activities. It is, however, highly encouraging to report continued investment and expenditure at site by the investor, who remains the Company’s largest shareholder (20.42%).”
This strategic transition to a royalty-focused model marks a significant milestone for Contango, enabling the company to reduce operational risk while maintaining exposure to the long-term upside of the Muchesu Project.
The partnership with Huo Investments—an entity led by a prominent Zimbabwe-based Chinese investor—has already delivered substantial financial backing, which is accelerating production capacity on site.
Recent half-year results also confirmed strong progress at Muchesu, with ongoing infrastructure upgrades and capital deployment aimed at scaling output.
With its new structure in place and royalty revenues secured, Contango is positioning itself as a low-risk, cash-generative player in the Southern African coal sector.
