Shareholders are slated to . This project has been viewed 588 times. Fig. Morgan Leighton. In August 2019, Danakali announced Africa Finance Corporation and African Export-Import Bank (Afreximbank) have obtained formal credit approval to provide US$200 million in senior debt finance, as part of the overall project funding package used for the construction of Colluli, with the documentation finalized on December 23, 2019. "We have found Eritrea to be very transparent and consistent across the board," Seamus Cornelius, Danakali's executive chairman, said in an interview. Here Are 10 Other Analyst Forecasts For Tuesday, Berenberg Bank Sticks to Their Buy Rating for Nutrien (NTR), Registration on or use of this site constitutes acceptance of our. These include: No poverty, zero hunger, quality There is also potential for kieserite and mag chloride to be commercialized with minimal further processing required. Danakali reports that the Colluli Mining Share Company (CMSC) has appointed RA International Group as its preferred contractor for the supply of accommodation, support services and other infrastructure buildings in support of the Colluli sulphate of potash project development, in Eritrea. Colluli has a JORC-2012 compliant Measured, Indicated and Inferred Mineral Resource estimate of 1,289Mt @11% K20. %PDF-1.7 The deposit stretches across the border into Ethiopia. It has had a border war with Ethiopia and a clash along the border with Djibouti. I wrote this article myself, and it expresses my own opinions. Colluli has been largely de-risked in terms of. Over the past two decades, many hundreds of thousands of Eritreans have fled military conscription and economic uncertainty in their home country and Eritrea has become a major source of migrants and refugees to Europe, in particular to Sweden, Germany and the Netherlands. Potassium is one of three key fertiliser macro-nutrients essential for healthy soil and plant growth. The operating environment weighed heavily on Danakalis decision, as Eritrea is ruled by one of the worldsmost oppressive regimes and was until 2018 on the UNs sanctions list. The Colluli potash project is expected to commence production in 2022. providing 10,000 direct and indirect local jobs. Sadly, Eritrea looks set to remain a failed state as long as he is in office. (MOP) and gypsum, along with rock salt. The Colluli process is expected to generate a product with a purity of 94.5%. Fig. Niels Wage, CEO of Danakali, said: I am pleased to announce the appointment of RA International as our preferred accommodation and support services contractor. The Perth-basedminer noted that despite covid-19 restrictions, engineering, procurement and construction management (EPCM) activities have continued as scheduled. Analysis of the potential contribution of Colluli potash project to sustainable development goals in Eritrea. The Danakil Depression that commences in Eritrea and extends up to 300km into Ethiopia, is believed to contain more than six billion tonnes of potassium bearing salts. The document estimated that Colluli would contribute 3% of .goog-text-highlight {background-color:transparent !important;box-shadow:none !important;} The UN says forced labour and detention without trial are common. Ok as claimed above I dure hope the dictatorship in place will be nice enough this time around to be honest and work for the sake of the people and show the truth about the budgetary issues to the public unlike what the dictatorship did on the gold mining sector.we Eritreans cannot wait to see the benefits of the potash industry on projects that will enhance peoples living standards and create a sustainable economic growth as stipulated on the government sustainable development goals and agendatime only will tell if the dictatorship will have a changing to work for the betterment of the country but not gew clicks. One of the essential benefits of having the salts in solid form is that it takes between 2-3 weeks to mine, process and transport our SOP to Massawa Port. Colluli is located in the Danakil Depression region of Eritrea and is approximately 230km by road south-east of the port of Massawa, which is Eritreas key import/export facility. Value: R 200 Million+. The Report was undertaken during 2018 by senior economists on behalf of the UNDP. Colluli is located about 75 kilometres from the Red Sea coast, making it among the most accessible premium potash deposits globally. You are talking about the garbage written by Plaut ? Image courtesy of Danakali. It then plans to distribute 90% of the net proceeds to shareholders and will continue as a listed company to identify new projects and potential new alternative growth opportunities. Colluli Potash Project is a 50:50 Joint Venture between Danakali Limited and the Eritrean National Mining Company (ENAMCO). The three key objectives set for the second phase of development included updating the capital estimate, project schedule and identifying key test work required to move into Phase 3. Although the total productive life is estimated to be approximately 200 years, the current plan calls for the development of the mine in two stages to support an initial operational life of 60 years. It has a Human Development Index of 0.42, which puts it among the ten least-developed countries on the planet. development of the project, and the expected significant boost to royalties, The UN sanction was lifted by the UN in November 2018 under Resolution 2444, by the EU in the following month, and by the U.S. in May 2019. Colluli has a JORC-2012 compliant measured, indicated and inferred resource of 1,289 Mt at 11% K20 equivalent and 7% kieserite. Additionally, it will provide comprehensive camp services incorporating catering, cleaning, laundry, pest and vector control, grounds keeping and waste management. stream Front End Engineering Design (FEED) strongly confirms Colluli as one of the worlds most economically attractive, and fundable SOP greenfield development project. Colluli, furthermore, boasts the shallowest evaporite mineralisation globally and consequently has significant mining, logistics and, in turn, capital and operating cost benefits over other potash development projects in the Danakil Depression and elsewhere. The open-cut, high-grade potash project is being developed by Colluli Mining Share Company (CMSC), a 50:50 joint venture partnership between Australia's Danakali and Eritrean National Mining Corporation (ENAMCO). 5. In the initial phase of operation, Wage said, Colluli would Italy created the colony of Eritrea in the 19th century around Asmara and gave it its current name. It also contains other fertilizer products, such as muriate of potash (MOP) and gypsum, along with rock salt. Thank you for your comment. <>/Metadata 306 0 R/ViewerPreferences 307 0 R>> As a natural resources industry expert with years of successful investing experience, I conduct in-depth research to generate alpha-rich, low-risk ideas for the member of The Natural Resources Hub (TNRH). Colluli is located in the Danakil Depression on the Eritrean side of the Eritrea-Ethiopia border, a barren desert area ideal for large mine operations (Fig. It also provides off-takers with additional confidence on Project certainty and fundability, supporting the finalisation of binding bankable offtake agreements. Eritrea has historically struggled to attract large investments because of its unfavourable business climate. Danakali is developing the tier-1 Colluli potash project, Eritrea, which boasts the world's lowest costs and >200 years of mine life. As a matter of fact, Zijin Mining (OTCPK:ZIJMF) acquired Nevsun Resources along with its Bisha zinc-copper mine in Eritrea on December 28, 2018. A port development at Anfile Bay could assist in unlocking this potential. #google_translate_element2 {display:none!important;} One-third of the country's GDP is made up of remittances sent home by Eritreans living in Europe and other developed countries. Phase one involving an estimated capital investment of $298m is expected to produce 472,000 tonnes (t) a year of high-quality SOP, while in phase two, the mine is expected to produce up to 944,000t of SOP from year six of the project with an additional capital investment of $202m. (. Colluli is the premier greenfield development project globally. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Sign up HERE today to benefit from Laurentian Research's in-depth research and the TNRH platform right away! Fig. The proposed mine is located within the Danakil Depression, part of the Great Rift Valley on the Eritrea - Ethiopia border, with export facilities on the Eritrean Red Sea coastline. 7. Eritrea had been under UN sanction per Security Council Resolution 1907 since December 23, 2009, for the government's role in aiding Al-Shabaab in Somalia and refusing to withdraw troops from its disputed border with Djibouti following a conflict in 2008. Enter your email below to receive updates on your featured companies right to your inbox. A number of unique characteristics make Colluli one of the world's largest and lowest-cost deposits of SOP. In turn the well-defined geological features support our ability to maximise the potential from this the multi salt deposit. In food production, potassium is removed from the soil in harvested crops and must be replaced in order to maintain future crop growth. A binding offtake agreement for up to 100% of Module I SOP production, and a US$200M debt financing term sheet have been executed, and all material permits are in place. Under the terms of the agreement, EuroChem will take, pay, market, and distribute up to 100% of the module I SOP production over a 10+3 year term from the project commissioning. Danakali has a 50% interest in a JV with the Eritrean National Mining Corporation (or ENAMCO), which operates the Colluli project. 3). World potash demand has grown at an average rate of 2.5-3.0% per year since 2000 (Fig. Danakali has reported a 1.1 billion ore reserve with a mine life of almost 200 years. Australias Danakali (ASX, LON:DNK) said on Thursday it was in the final stages of completing the second phase of developmentof its world-class Colluli potash project in Eritrea, Africa. The development of the Colluli potash projects coincides The Project has unrivalled potash product versatility. Image courtesy of Danakali. mine-life. The Colluli project is a 5050 joint venture between South Boulder Mines and the government-owned Eritrean National Mining Corporation. There are many sources of potassium, including. In 1993, after a brutal war of independence from Ethiopia lasting almost three decades and led by Isaias Afwerki Eritrea became a sovereign country. Colluli will be a simple open-cut mining operation utilising truck and shovel methods complemented by continuous surface miners. 86% of retail CFD accounts lose money. 2. The border lands mostly arable are unusable for farming purposes, because of unexploded land mines left over from the war of independence. Colluli is located in the Danakil Depression region of Eritrea and is approximately 230km by road southeast of the port of Massawa, which is Eritreas key import/export facility. It is estimated that 49% of the population is Christian and a further 49% is Sunni Muslim. With the first production scheduled for 2022, Danakali is well positioned to emerge as a pure-play SOP producer in the coming years, especially considering its low-cost structure (Fig. In the sprawling mining sector, potash mining is unique in that potash mines typically last decades to even centuries, thus forcing the miners to deploy capital for the long-term return, and that transportation of bulk-tonnage potash tends to lead to regional monopolies. EuroChem is an outstanding partner with global reach and extensive fertiliser capabilities. Members of The Natural Resources Hub get exclusive ideas and guidance to navigate any climate. Fig. Therefore, a wide moat that's rarely seen in miners of other commodities can be found among potash miners, such as Nutrien Ltd (NTR), as discussed by fellow Seeking Alpha authors. Colluli, a 50:50 joint venture between Danakali and the Eritrean National Mining Corporation (ENAMCO), has been called a game-changer for Eritreas economy, as it is expected to become one of the worlds most significant and lowest-cost sources of sulphate of potash (SOP), a premium grade fertilizer. Net to Danakali's 50% interest, Module I is projected to generate NPV-10 of 242 million, on average delivering an undiscounted FCF of US$43 million per year, with a post-finance IRR of 29.7%; module I&II is projected to generate NPV-10 of 439 million, on average delivering an undiscounted FCF of US$85 million per year, with a post-finance IRR of 31.3% (Table 1). I have taken a starter position and plan to build a position of meaningful size in the next couple of years. The FEED economic studies envisage the production of 472 Ktpa in module I for development capital of US$302 million and another 472 Ktpa in module II beginning year 6 for additional investment of US$202 million. The miner said it would use the remaining cash about $12 million to identify new projects and potential new alternative growth opportunities.. AustraliasDanakali(ASX: DNK) is selling its 50% stake in the Colluli potash project in Eritrea, Africa, almost 13 years after partnering with the Eritrean National Mining Corporation (ENAMCO) to build the mine.Subject to conditions, the deal with Chinese company Sichuan Road and Bridge Group is expected to be finalized between March and May next year, leaving Danakali with $121 million cash, of which 90% will be distributed back to shareholders.The miner said it would use the remaining cash about $12 million to identify new projects and potential new alternative growth opportunities.The Colluli potash project is considered one of the worlds most significant and lowest-cost sources of sulphate of potash (SOP), a premium grade fertilizer.The project has the worlds largest JORC compliant reserve at 1.1 billion tonnes. To open fire on your own disabled [people] is pretty appalling.". The Company is developing Colluli in partnership with the Eritrean National Mining Corporation (ENAMCO). finished in June, will take the company a step closer to the construction phase The project has the worlds largest JORC compliant reserve at 1.1 billion tonnes. Subject to conditions, the deal with Chinese company Sichuan Road and Bridge Group is expected to be finalized between March and May next year, leaving Danakali with $121 million cash, of which 90% will be distributed back to shareholders. Danakali is set to sell its stake in its flagship Colluli potash project in Eritrea for US$121 million. 6. The company expects to start full commercial production in mid-December 2022. The SOP quality spectrum, from the same source as Fig. It has a geographic area of 117,600km2, making it slightly larger than Bulgaria. I am not receiving compensation for it (other than from Seeking Alpha). The mine will put Eritrea among the top ten potash producers in the world and impact the global supply chain of high-quality fertiliser. . Discover how your business could benefit from a base in Masdar Citys economic free zone, download this free whitepaper. The company's strategy targets the development of a world-class potash project that will become pivotal for global and African agriculture. It also has access to solar, wind and geothermal energy systems the East African rift. function googleTranslateElementInit2() {new google.translate.TranslateElement({pageLanguage: 'en',autoDisplay: false}, 'google_translate_element2');} Colluli, which Danakali shares with the Eritrean National Mining Corporation, is scoped to produce 472,000 tons a year of potash in sulphate (SOP) in its first phase before scaling up to second phase production of 944,000 tons annually. It also has access to solar, wind and geothermal energy systems the East African rift. The agreement encourages the maximisation of netback pricing of SOP produced in the Colluli, which will become the first Africa-based fertiliser provider in the supply chain of EuroChem. "They were only used to getting effectively pocket money and food, lodging and, of course, ammunition and weapons, and they began to turn round and say: 'Well, hang on, we now have to look after our families. The operating environment weighed heavily on Danakalis decision, as Eritrea is ruled by one of the worldsmost oppressive regimes and was until 2018 on the UNs sanctions list. The Colluli project is located in the Danakil Depression region of Eritrea, East Africa, about 75 km from the Red Sea coast The Perth-based miner noted that despite covid-19 restrictions,. What are the best countries for cryptocurrency adoption? Colluli is obviously a tier-1 asset, boasting the lowest-costs in the world and >200 years of mine life. The mineralization in the Colluli deposit starts at just 16m, making it the shallowest known potash deposit in the world, and thus amenable to low-cost, open-cut mining. The front-end engineering and design (FEED) study for the project was completed in January 2018. The front-end engineering design (FEED), expected to be Eritrea's north-eastern and eastern parts have an extensive coastline along the Red Sea, strategically located along the Maritime Silk Road. Adjusted net income of $0.52 beat the consensus estimate of $0.43. The proximity to the coast and the established port infrastructure in the Port of Massawa gives Colluli unrivalled access to global export markets, and it also decreases logistics costs from the mine gate onto the ship estimated at US$73/t. Eritrea has huge tourism potential, but it is hard for foreign visitors to obtain a visa. (5) a community of investors to bounce off ideas and share information with. RA, listed . Potash, an important fertiliser, could be a game changer for Eritrea and other African countries. 4. For the area a high-temperature geothermal reservoir was identified in Alid with estimates of a potential heat of 250 to 300 degrees Celsius. Soraya Narfeldt, CEO of RA International, said: We are delighted to have been chosen as the preferred contractor to work with Danakali and its partners on this project which we see as globally significant. 4 0 obj To the southeast of the teeming herds of wildlife in the Okavango Delta inBotswana, an offshoot of the Lundinminingdynasty is extending its search for the worlds biggestdiamonds. The benefits of this means we generate cash flow much earlier and more predictably relative to solution mining or brine operations. The operating environment weighed heavily on Danakalis decision, as Eritrea is ruled by one of the worldsmost oppressive regimes and was until 2018 on the UNs sanctions list. 6. The cost curve of SOP production as of 2018, from the same source as Fig. DANAKALI Ltd., Eritrea - Colluli Potash Project | Aktienforum | Aktien Forum | Diskussionsboard | Community von finanzen.at A United Nations report published in 2019suggested that Colluli could significantly boost the economy of Eritrea. Danakali (DNK) - Technical Analysis. Eritrea has a command economy under the control of the sole political party, the People's Front for Democracy and Justice, led by Afwerki. After the Second World War, it was annexed to Ethiopia. The project has a 200-year lifecycle and is expected to start operating in 2022. taxation and exports, and from jobs and skills and economic development of the The project, 50/50 owned by Australian mining company Danakali and the Eritrean Government, is rapidly progressing towards construction. (2) live portfolios for both capital appreciation and income generation. In the initial phase of operations, the mine would produce more than 472,000 tonnes a year of sulphate of potash (SOP), a premium grade fertilizer. The Colluli potash mine is estimated to hold 1.1 billion tonnes of SOP ore reserves grading 10.5% potassium oxide (K2O). The production of other agricultural and salt products, including Rock Salt, Kieserite, Gypsum and Magnesium Chloride, is also possible from the Colluli resource. The stock chart of Danakali, modified from this source. The potassium salt composition in the resource provides the option to diversify the potash product suite as the Project grows. Agnico Eagle's EPS beat expectations; guidance maintained. education, gender equality, clean water and sanitation, sustainable economic The resource contains 303Mt @ 11% K2 0 of Measured Resource, 951Mt @ 11% K2 0 of Indicated Resource and 35Mt @ 10% K20 of Inferred Resource. Finance > M-a. Fig. A big economic change will come to eritrea, proud to be an nseritrea. Installation of an export terminal at Anfile Bay would decrease the length of the land transport route from 230 to only 87 km, thus further lowering the logistics costs required to satisfy the multi-commodity trade in and out of Eritrea. 6. US Level 1 ADR . Due to this change if you are seeing this message for the first time please make sure you reset your password using the Forgot your password Link. He covered foreign investment in Latin America for 13 years and for the past three years has lived in sub-Saharan Africa and written widely about the subject from that continent's perspective. 5). The company has completed a front-end engineering design for the production of potassium sulphate, otherwise known as sulphate of potash or SOP. Eritreas north-eastern and eastern parts have an extensive coastline along the Red Sea, strategically located along the Maritime Silk Road. Two articles indicate the rapid progress towards the development of a vast potash mine in the Danakil desert. 9). The Colluli Potash Project (Project, Colluli ) is 100%. The water supply for the project is proposed to be met through a pipeline connecting a water desalination plant located at Anfile Bay on the Red Sea coast. Development is already underway with expected production in 2022. A pre-feasibility study was completed in February 2015, followed by the completion of a definitive feasibility study in November 2015, while the mining licence was granted in February 2017. Eritrean troops are fighting on the Ethiopian government's side (Eritrea borders Tigray to the north). Please. Mineral & Phosphate Mining in the US industry outlook (2022-2027) poll Average industry growth 2022-2027: x.x lock Purchase this report or a membership to unlock the average company profit margin for this industry. Danakali to cash out of Colluli. It also has access to solar, wind and geothermal energy systems - the East African rift. GDP dropped by -0.6% in 2020 in the wake of the Covid-19 pandemic and a locust invasion. It is generally used in combination with the other two macro-nutrients, nitrogen and phosphorus, to produce a range of fertilisers, the type used being dependent on the soil to which it will be applied. With a growing world population, demand for food will increase, while the availability of arable land is expected to shrink. Required fields are marked *. A Front-End Engineering Design (FEED) study confirmed an advanced stage and economically attractive Project. As part of the agreement with CMSC, owned 50:50 by Danakali and the Eritrean National Mining Corporation, RA will supply, deliver and install a mine accommodation camp as well as a plant administration and service facilities for the Colluli mine site.