Atrum Coal signs preliminary offtake deals for Canadian mine project

Atrum Coal NL (ASX: ATU) (OTCMKTS: ATRCF) announced Feb. 26 that it has signed non-binding MOUs for offtake with Japanese counterparties including some of that country’s largest corporate conglomerates for anthracite produced from the Groundhog North Mining Complex located in British Columbia, Canada.

These are non-binding Memorandums of Understanding (MOUs) to negotiate binding Sales Agency Agreements (SAAs) for anthracite. The competing “Confidential Parties” include three of Japan’s seven “Sogo shosha” (general trading companies). They are leading domestic and global consumers and traders of raw materials including high grade anthracite for the steel and specialty markets, as well as major natural resources investors.

The MOUs cover a range of high value products planned to be produced from Groundhog anthracite including: lump coke replacement; coke replacement for use in sintering iron ore; blast furnace injection coal; recarburisers in electric arc furnaces; charge carbon; filtration media and activated carbon; carbon cathodes, anodes and electrodes; lithium ion battery anodes; electrode paste; synthetic graphite replacement; calcined anthracite; carbon feed for manufacturing of: calcium carbide; silicon; phosphorous; soda; sodium sulphide; plastics and urea.

The MOUs are a key step in executing a minority equity sell-down in the Groundhog North Mining Complex to fund development of the first mine in the Groundhog Coalfield. The company said it is negotiating similar agreements with other tier one counterparties in Asia and Brazil.

VP Marketing & Business Development Peter Doyle said: “We are excited to be working with some of Japan’s largest corporate conglomerates and these MOUs are a key milestone. Our vision is to become the world’s premier supplier of ultra-high grade anthracite, and selling into Japan is a core part of our strategy.”

The Groundhog Anthracite Project is located in the Groundhog Coalfield in northwestern British Columbia, Canada. Groundhog is prospective for high grade and ultra-high grade anthracite suitable for application in the steel and ferro-alloy industries as well as a range of specialist applications. It is located in close proximity to key mining infrastructure including rail, port, road and power facilities. The company has secured 3 million tonnes per year of port capacity at Stewart Bulk Terminals (150 kilometers southwest of the project) on non-take-or-pay terms, and has a further 5 million tonnes per year of capacity under an MOU with Stewart World Port.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.