After the Second World War, it was annexed to Ethiopia. The saleable SOP product will be trucked via road for sipping to the Massawa port which is located approximately 230km north-west of the project site. 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). products, such as Sulphate of PotashMagnesium (SOP-M), muriate of potash function googleTranslateElementInit2() {new google.translate.TranslateElement({pageLanguage: 'en',autoDisplay: false}, 'google_translate_element2');} I focus on identifying high-quality deep values in the natural resources sector and undervalued wide-moat businesses, an investment approach that has proven to be extremely rewarding over the years. taxation and exports, and from jobs and skills and economic development of the The company expects to start full commercial production in mid-December 2022. The Danakil Depression is an emerging potash province in Eritrea and Ethiopia. Best. These alternative producers require substantial lead times to generate their harvest salts for processing. Eritrea is bordered by Sudan in the west, Ethiopia in the south and Djibouti in the south-east, and it has a 1,150km coastline along the Red Sea. Below, let's look at Danakali Ltd. (DNK.ASX) (OTCPK:SBMSF) (OTCPK:DNKLY), which operates in Eritrea. The Colluli potash project is a low-cost, long-life sulphate of potash (SOP) project under development in Eritrea, Eastern Africa. Open-cut mining is a proven mining method for salts, and its safer and more cost-effective than underground mining which allows for better overall resource recovery. It has had a border war with Ethiopia and a clash along the border with Djibouti. 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. Based on what evidence? 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. Danakali to cash out of Colluli. At mine-gate production costs of US$149-165/t or total cash costs of US$242-258/t, Colluli can be profitable even at the current low SOP price of US$500-650/t. 2). (. The country with an estimated $2.48bn economy and 3.6 million inhabitants has been ruled with an iron fist by its dictator President Isaias Afwerki, now aged 75 since he led it to independence from Ethiopia in 1993. The project will be developed in multi-modules, with Module I serving as a platform for future growth. Abu Dhabi has established a growing reputation as a source of innovation due to forward-thinking projects across sectors including energy, infrastructure, sport, culture and tourism. 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. 2023 Glacier Media Group, All Rights Reserved, selling its 50% stake in the Colluli potash project, Botswana mining growth seen flat amid dim diamond outlook, Harmony Gold CEO says gold sector consolidation inevitable, BHP seeks to tighten grip on South Americas copper sector, Quest for worlds biggest diamonds gives De Beers a headache, https://www.hrw.org/world-report/2021/country-chapters/eritrea, https://www.dandc.eu/en/article/how-government-eritrea-became-one-worlds-most-repressive-regimes, https://www.hurstpublishers.com/book/understanding-eritrea-2/, Canada injects $75 million into BHPs Jansen potash mine, Russia raises fertilizer export quota by 500,000 tonnes, World to face potash price crunchas Brazil Potash propels Autazes project toward production, Europes largest rare earths deposit found in Sweden. Colluli will be a simple open-cut mining operation utilising truck and shovel methods complemented by continuous surface miners. 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. The benefits of this means we generate cash flow much earlier and more predictably relative to solution mining or brine operations. "There is a supportive business environment because mining there is a very strategic industry. It has been a Unesco World Heritage Site since 2017. If you have an ad-blocker enabled you may be blocked from proceeding. These circumstances have resulted in it becoming one of the most isolated states in the world. 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. Prime Minister Abiy Ahmed accused the Tigrayans of attacking a military camp and attempting to loot military assets. Open-cut solid salt mining beats underground solid salt mining, lacustrine brine, and playa brine in operating costs. The project is the only known source of potash that allows extraction of the fertilizer in solid form. 7. The location of the Colluli potash deposit, from this source. In food production, potassium is removed from the soil in harvested crops and must be replaced in order to maintain future crop growth. 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,. advance its sustainable development agenda, which are 13 priority Sustainable The country only has one preferential trade agreement in force (with Italy) and is not a member of the World Trade Organisation. In November 2020, a conflict broke out in the mountainous region of Ethiopia, called Tigray, between Tigrayan forces and the Ethiopian federal troops. (5) a community of investors to bounce off ideas and share information with. 3). (. Colluli boasts a 1.1Bt Ore Reserve and almost 200-year mine life, shallow mineralisation allowing low-cost open-cut mining, simple, proven, low-cost processing, favourable logistics, expansion, diversification and multi-commodity potential. 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. 2023 Glacier Media Group, All Rights Reserved, Botswana mining growth seen flat amid dim diamond outlook, Harmony Gold CEO says gold sector consolidation inevitable, Quest for worlds biggest diamonds gives De Beers a headache, Mali forecasts 3.5% decline in industrial gold output in 2023, Canada injects $75 million into BHPs Jansen potash mine, Russia raises fertilizer export quota by 500,000 tonnes, World to face potash price crunchas Brazil Potash propels Autazes project toward production, Europes largest rare earths deposit found in Sweden. EuroChem is an outstanding partner with global reach and extensive fertiliser capabilities. Fertiliser is a key component to ensure world food security in the future. AFC also agreed for an additional 39m ($50m) of strategic equity investment in Danakali in December 2019. The deposit stretches across the border into Ethiopia. seriously, this Man is a lobbyist of TPLF A group designated as a Terrorist Organisation in Ethiopia. Colluli is obviously a tier-1 asset, boasting the lowest-costs in the world and >200 years of mine life. ,and the value is around 67,000.00 . 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. Producer of It is a member of the African Union, the UN and the Intergovernmental Authority on Development which deals with issues around drought and desertification in the Horn of Africa but it is the only African country (out of 55) not to sign up to the African Continental Free Trade Area, the huge free trade area that went live on 1 January 2021. BHP officials met with Argentinian authorities this week, expressing interest in increasing investments in the San Juan province. Demand for fertiliser is driven by population and economic growth which directly translates to food demand. Across the country, an estimated two-thirds of households are impacted by food insecurity. Foreign investment in most business sectors is heavily restricted and state-owned enterprises distort its markets. The Project has unrivalled potash product versatility. 1. Over 100kg of Colluli product was tested at Ludman Industries in the USA for product compaction behaviour. Visit our privacy policy for more information about our services, how we may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications. The Colluli potash mine is estimated to hold 1.1 billion tonnes of SOP ore reserves grading 10.5% potassium oxide (K2O). Colluli is located about 75 kilometres from the Red Sea coast, making it among the most accessible premium potash deposits globally. 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. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Click to follow this blog and receive notifications of new posts by email. In June 2018, Danakali reached a binding take-or-pay offtake agreement with EuroChem Trading GmbH. Danakali, currently undervalued and standing for a massive re-rating upon the first production, should be considered by risk-tolerant investors with a long time horizon. In late 2019, the China Shanghai Corporation for Foreign Economic and Technological Cooperation began constructing part of the 500km road connecting Eritreas Massawa and Assab harbours (both have special economic zones). ColluliMining Share company (CMSC,) a 50:50 Joint Venture between Danakali Limited (DNK) and Eritrean National Mining Corporation (ENAMCO) Codes: ASX: DNK, SO3-FRA, SO3-BER. Artists impression of the plant at the Colluli project. The deposit is the only one in the world world where SOP can be made from an open-cut mine due to its extreme shallowness. MiningOther CommoditiesIndustrial Minerals, Danakali (50%) and Eritrean National Mining Corporation (ENAMCO, 50%). Table 1. Extraction of the salts in solid form is a crucial positive differentiator of Colluli. In spite of the projected long-term growth of potash demand, the building of new production capacity has been lagging in the past few years, thanks to low potash prices. <> Colluli is owned by the Colluli Mining Share Company, a 50:50 joint venture with the Eritrean National Mining Company. I based my assertion of Eritrea being ONE of the most oppressive regimes on a series of reports by human rights advocates such as Human Rights Watch (https://www.hrw.org/world-report/2021/country-chapters/eritrea) as well as sites such as D+C (https://www.dandc.eu/en/article/how-government-eritrea-became-one-worlds-most-repressive-regimes). Discover how your business could benefit from a base in Masdar Citys economic free zone, download this free whitepaper. In July 2013, major producer Belaruskali broke up with former Belarusian Potash Company cartel partner Uralkali, and in a move to grab market share, signed a potash sales contract for the Chinese market at US$315/t MOP. Danakali is just one of many deep-value natural resources ideas covered by Laurentian Research. Afwerki has become close to Abiy and is a sworn enemy of the Tigray Peoples Liberation Front, which ruled Ethiopia when the two countries fought a border war. (as referred to in ASX announcements of 3 October 2022, 1 December 2022, and 12 January 2023), it . The SOP quality spectrum, from the same source as Fig. The Colluli project lies in an area that saw detailed geological and geochemical work by USAID and US Geological Survey with the Eritrean Ministry of Mines and Energy. 10. region, chief executive Niels Wagetold MINING.COM last year. Adjusted net income of $0.52 beat the consensus estimate of $0.43. Additionally, it will provide comprehensive camp services incorporating catering, cleaning, laundry, pest and vector control, grounds keeping and waste management. The mine will put Eritrea among the top ten potash producers in the world and impact the global supply chain of high-quality fertiliser. The Colluli potash mine is estimated to hold 1.1 billion tonnes of SOP ore reserves grading 10.5% potassium oxide (K2O). Fig. 4). RA, listed on the London Stock Exchanges AIM board, specialises in building, operating and maintaining facilities in remote and challenging conditions across Africa, providing complex humanitarian, governmental, mining, and other commercial developments and services, Danakali says. Development is already underway with expected production in 2022. For the area a high-temperature geothermal reservoir was identified in Alid with estimates of a potential heat of 250 to 300 degrees Celsius. Annual output In November 2021, Eritrea also signed a memorandum of understanding with China to join its Belt and Road Initiative. (2) live portfolios for both capital appreciation and income generation. The project has now obtained all licenses and permits within the license area and has also been granted all required permits, licences and authorisations for infrastructure construction and development outside the Colluli mining license area. As a tier-1 potash deposit with a number of unique advantages to its favor, the fully-permitted Colluli carries little underground geological risk. 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). Fig. In 2023, Botswana expects diamond output to decline by 1%. Both are below. 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. The Danakil salt basin, in Eritrea, is a positively unique example as it is one of only very few known potash deposits where kainite, a sulphate bearing mineral key for potassium sulphate production, is found in solid form. Mobile data does not exist. Danakali explored the use of filtered seawater at Colluli. Reverso Context-: Thank you for your comment. Potash historical demand trends by region, from this source. "In the beginning, things were fine, but gradually it became clear to President Isaias [Afwerki], who led the independence struggle for 30 years, that things were not going the way he expected them to," said Martin Plaut, the former Africa Editor of the BBCs World Service, in an interview in 2019. At a SOP price of US$650/tonne, annual production would generate revenue equivalent to . The front-end engineering design (FEED), expected to be Niels Wage, CEO of Danakali, said: "We are very pleased to announce the appointment of Aggreko as our single power provider. The potassium salt composition in the resource provides the option to diversify the potash product suite as the Project grows. These authors includeSilver Coast Research, , among others. The United Nations Development Programme (UNDP) has indicated Colluli has the potential to significantly boost the Eritrean economy and have a substantial positive impact on the Sustainable Development Agenda of Eritrea. 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. GDP dropped by -0.6% in 2020 in the wake of the Covid-19 pandemic and a locust invasion. We have recently upgraded our technology platform. 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. finished in June, will take the company a step closer to the construction phase The border lands mostly arable are unusable for farming purposes, because of unexploded land mines left over from the war of independence. Danakali has a 50% interest in a JV with the Eritrean National Mining Corporation (or ENAMCO), which operates the Colluli project. 5). Under the terms of the agreement, EuroChem will take, pay, market, and distribute up to 100% of the Colluli sites SOP fertiliser production over a 10-year term, from the Projects date of commissioning. To open fire on your own disabled [people] is pretty appalling.". The agreement can be further extended by three years if mutually agreed upon. The total measured, indicated and inferred SOP mineral resources at the deposit are estimated to be 1.29 billion tonnes grading 11% K2O. Some 7 Mt of potash capacity as being forecasted back in 2015 has been removed from the supply side (Fig. It also contains other fertilizer products, such as muriate of potash (MOP) and gypsum, along with rock salt. Colluli Mining Share Company secured 165m ($200m) of senior debt finance from the Africa Finance Corporation (AFC) and the African Export-Import Bank (Afreximbank) in August 2019. Asmara is a beautiful city and awash in colonial Italian architectural gems. 3). On the financial front, a key step was taken last month when Danakali, which has a 50-50 joint venture covering Colluli with the government of Eritrea, signed a $200 million funding mandate. The project has the worlds largest JORC compliant reserve at 1.1 billion tonnes. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address. stream The plant administration and services facilities will incorporate administration offices, medical clinic, warehouses, and workshops (see graphic above, credit: RA International). All land is considered state-owned and property rights are non-existent. 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. Danakali (ASX: DNK) is the 50% owner of the Colluli Potash Project located in Eritrea. 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). 1 0 obj 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. The relative location of the Colluli resource to these critical markets gives it a significant logistics advantage and unrivalled access to the potash markets of the future. Colluli is located about 75 kilometres from the Red Sea coast, making it among the most accessible premium potash deposits globally. The project also involves the construction of a heavy fuel oil-based power plant on-site to meet the electricity requirement. Select LanguageChinese (Simplified)EnglishGerman Only 1% of the population has access to the internet, according to the World Bank. The JORC-2012 compliant mineral resource estimate, from this source. (MOP) and gypsum, along with rock salt. Potash is the common term for fertiliser forms of the element potassium (K). 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. 6. Internal industry and services contribute the majority of the remaining GDP, while agriculture accounts for only 13% (despite employing 80% of the population). The project is the only known source of potash that allows extraction of the fertilizer in solid form. The development of the Colluli potash projects coincides <> Copyright 2023, All Rights Reserved | Alphastox | Proudly Hosted by, Danakali to sell stake in flagship Colluli potash project in Eritrea, Canada Nickel develops new method for accelerated carbon capture, Patriot Battery Metals drills nine holes at Corvette, Metso Outotec expands digital grinding inspections with acquisition of Global Physical, Fatal accident at Ivanhoes Kamoa-Kakula mine in Congo. Has access to the Ethiopian side of the deposit been guaranteed? Since then, potash price has fallen from the neighborhood of US$600/t MOP to as low as USS$200/t MOP by 2017, and has since been fluctuating between US$200/t and US$270/t. The underapplication of SOP in developing regions where the highest rates of population growth are expected, from this source. The west really needs to let go of calling every developing nation that doesnt bend at its will oppressive. A United Nations report published in 2019suggested that Colluli could significantly boost the economy of Eritrea. Das wrde mich fr Eritrea sehr freuen und hoffe das es den Menschen dort zugute kommt.Ich liebe dieses Land zumal meine Tochter einen eritreischen Vater hat.. In June 2018, Danakali reached a binding take-or-pay offtake agreement with EuroChem Trading GmbH (EuroChem). The above mineral reserves support 215 years of SOP production at 944 Ktpa as envisaged in modules I and II development plan. 6. The Eritrean government, through ENAMCO, has a 50% interest in the Colluli project. There was a famous incident where some of the disabled tried to walk into town to complain to him, and they were met by the police and the army who opened fire on them. Standard, granular and soluble products can be produced for distribution to the market. I recommend a book by Martin Plaut, a senior researcher at Londons Institute of Commonwealth Studies and former Africa Editor of the BBCs World Service called Understanding Eritrea: Inside Africas Most Repressive State (https://www.hurstpublishers.com/book/understanding-eritrea-2/). In 2019, it was estimated that the country had a total of 607,900 emigrants, including 217,472 living in Ethiopia, 188,411 in Sudan, 83,600 in Europe and 35,745 in the US, according to Migrants Refugees website. To lower infrastructure uncertainties, in August and October 2020, respectively, Danakali appointed RA International Group PLC as the preferred contractor for the supply of accommodation, support services, and other infrastructure buildings, and Aggreko (AGK.LSE) as its preferred power supply contractor for its 12MW HFO power plant at Colluli under a five-year BOOT contract, removing a major infrastructure uncertainty. The resource contains 303Mt @ 11% K2 0 of Measured Resource, 951Mt @ 11% K2 0 of Indicated Resource and 35Mt @ 10% K20 of Inferred Resource. .goog-te-menu-value:hover {text-decoration:none !important;} The project is the only known source of potash that allows extraction of the fertilizer in solid form. Eritrea has one of the world's most brutal dictatorships, but could a huge potash mine be an economic game changer? Australia's Danakali (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. Eritrea's north-eastern and eastern parts have an extensive coastline along the Red Sea, strategically located along the Maritime Silk Road. mine-life. DANAKALI Ltd., Eritrea - Colluli Potash Project | Aktienforum | Aktien Forum | Diskussionsboard | Community von finanzen.net A United Nations report published in 2019suggested that Colluli could significantly boost the economy of Eritrea. Are the rights of those working on the site ensured, or will they be slaves forced to work on the mine as National Service conscripts? Eritrea one of the least accessible countries for humanitarian organisations, Searches, Arrests, and Tension in Eritrea, Eritreas jailed journalist exhibition opens in UK Parliament, Dispute over Patriach splits Norwegian Orthodox church in two, Twenty one years after being jailed, Eritreas independent journalists are remembered in the British Parliament. It has a Human Development Index of 0.42, which puts it among the ten least-developed countries on the planet. Economic resources for Sulphate of Potash (SOP) production are scarce, and Colluli is favourably positioned to supply the worlds fastest-growing SOP markets. % Danakali, an Australian company that has been developing the Colluli potash project in Eritrea, was recently granted permission by the Eritrean Ministry of Energy and Mines to commence commercial production at Colluli. By clicking the Download Free Whitepaper button, you accept the terms and conditions and acknowledge that your data will be used as described in the Masdar City Free Zone privacy policy The economy expanded by 2.9% in 2021 and is forecast to surge by 4.8% this year, according to the International Monetary Fund. Is this happening to you frequently?
