At a SOP price of US$650/tonne, annual production would generate revenue equivalent to . Following the agreement, Collulis position as an economically attractive SOP greenfield development project has been reinforced. 10). I wrote this article myself, and it expresses my own opinions. The shortfall of projected and actual global potash capacity, from this source. 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. 3). DANAKALI Ltd., Eritrea - Colluli Potash Project | Aktienforum | Aktien Forum | Diskussionsboard | Community von finanzen.at endobj Eritreas north-eastern and eastern parts have an extensive coastline along the Red Sea, strategically located along the Maritime Silk Road. % Danakali explored the use of filtered seawater at Colluli. He is an alone, he is DICTATORSHIP! The document estimated that Colluli would contribute 3% of Over the next three decades, almost 95% of the population growth will occur in Africa, India, and South-East Asia. 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. World potash demand has grown at an average rate of 2.5-3.0% per year since 2000 (Fig. The Colluli project is located in the Danakil Depression region of Eritrea, East Africa, about 75 km from the Red Sea coast. (2) live portfolios for both capital appreciation and income generation. Fig. So, as a mining jurisdiction, it has got nothing but ticks in all the right boxes.". 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. Infrastructure to be developed and upgraded outside the Colluli mining license area includes sea water intake and treatment at Anfile Bay; pipeline and access corridor of 87km between Bay area and the Colluli process plant and the Colluli site road of 57km connecting Colluli to Marsa Fatuma. The Colluli deposit comprises a massive JORC-2012 compliant Ore Reserve estimate of 1,100Mt @ 10.5% K2O for 203Mt of contained SOP equivalent, providing a mine life of almost 200 years. The asset has the potential to produce other fertilizer with the move towards diplomatic relations between the once feuding countries Unlike other potash producing basins of the world, the Danakil region contains a variety of potassium-bearing salts, enabling the opportunity to generate a range of potash fertilizers. SOP - a premium grade fertilizer - usually grabs a higher price at US$500-650/t (see here). View the original article here. In 2023, Botswana expects diamond output to decline by 1%. Additional details about the agreement are available in the following announcement >>. Has access to the Ethiopian side of the deposit been guaranteed? Potassium is one of three key fertiliser macro-nutrients essential for healthy soil and plant growth. It is strategically important as it has access to the Red Sea, the Suez Canal and to Europe, as well as to the waters of the Persian Gulf and beyond to the Indian Ocean. Many Eritreans hoped that the peace deal with Ethiopia would create economic opportunities for the country, but there is little sign of that happening yet. I think you should research about th e author. The removal of Eritrea from the sanction list opened up the country for foreign investments, thus significantly reducing geopolitical risk. Whilst SOP demand is population growth story it is more of an economic growth story and the African continent is seen to be where the majority of the worlds economic growth will occur in the coming decades. By. finished in June, will take the company a step closer to the construction phase The company is yet to secure an additional US$52 million of capital. 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. 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. 6. The deposit stretches across the border into Ethiopia. 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. Extraction of the salts in solid form is a crucial positive differentiator of Colluli. Afwerki's critics accuse him of using the long-standing border dispute with Ethiopia to avoid implementing Eritreas constitution which was ratified in 1997 and for postponing the first scheduled elections (which were also due in 1997). The Colluli potash project is a low-cost, long-life sulphate of potash (SOP) fertiliser project under development by the Colluli Mining Share Company, a 50-50 joint venture partnership between the Australian start-up Danakali and the Eritrean National Mining Corporation. I wrote this article myself, and it expresses my own opinions. However, the country is home to one of the world's biggest potash deposits which straddles the border with Ethiopia. Posted by Daniel Gleeson on 21st August 2020. The Project has unrivalled potash product versatility. and then onto production in 2022, Danakali said. Both are below. The Company is developing Colluli in partnership with the Eritrean National Mining Corporation (ENAMCO). 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. 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. Over 6Bt of potassium bearing salts suitable for the production of potash fertilisers have been identified in the region to date. The total measured, indicated and inferred SOP mineral resources at the deposit are estimated to be 1.29 billion tonnes grading 11% K2O. The front-end engineering design (FEED), expected to be The project is the only known source of potash that allows extraction of the fertilizer in solid form. This long-lasting tension has led to Eritrea's militarisation. It is actually resistant to the wests oppression in the most pure sense of the term. Eritreas north-eastern and eastern parts have an extensive coastline along the Red Sea, strategically located along the Maritime Silk Road. stream 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. DANAKALI Ltd., Eritrea - Colluli Potash Project | Aktienforum | Aktien Forum | Diskussionsboard | Community von finanzen.net Located in the Horn of Africa, prolonged periods of conflict and severe drought have had a catastrophic impact on the Eritrean economy and the country is one of the worlds poorest, with income per head estimated at $678 in 2022 (up from $501 in 2010). Have the local Afar people been displaced and supplies to their communities cut to allow access to the site? The Report was undertaken during 2018 by senior economists on behalf of the UNDP. Muriate of potash, i.e., MOP (KCl; 0-0-60), which is used for wheat, corn, and other chloride-tolerant crops; Sulfate of potash or SOP (K2SO4; 0-0-50-18S), which also supplies both potassium and sulfur for high yields and quality; Potassium-magnesium sulfate, i.e., SOP-M (K2SO4-2MgSO4; 0-0-22-22S-11Mg) used as specialty fertilizer; Potassium thiosulfate (K2S2O3; 0-0-25-17S); and, Potassium nitrate (KNO3; 13-0-44) used for chloride sensitive crops that require additional nitrogen (see. 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 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). Invest in t. Gensource Potash : Strategic Business Relationship and Project Update, Analysts Are Bullish on Top Materials Stocks: Albemarle (ALB), Nutrien (NTR), DraftKings To Rally Around 38%? 6. I am not receiving compensation for it (other than from Seeking Alpha). (as referred to in ASX announcements of 3 October 2022, 1 December 2022, and 12 January 2023), it . (. 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. 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. 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. Producer of Sylvinite and carnallitite both produce potassium chloride, which is then combined with decomposed kainitite to form high purity potassium sulphate. Disclosure: I am/we are long SBMSF, CMP. It has been a Unesco World Heritage Site since 2017. In the initial phase of operation, Wage said, Colluli would Development Goals (SDGs). 2). 10. The project also involves the construction of a heavy fuel oil-based power plant on-site to meet the electricity requirement. As inflation falls, what can be expected from the Bank of England in the months to come? In food production, potassium is removed from the soil in harvested crops and must be replaced in order to maintain future crop growth. 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. 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. Danakali is developing the tier-1 Colluli potash project, Eritrea, which boasts the world's lowest costs and >200 years of mine life. 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. .goog-te-menu-value:hover {text-decoration:none !important;} The SOP quality spectrum, from the same source as Fig. RA, listed . In some cases, depending on the ambient conditions, this process can take over two years. 4. Danakali (DNK) - Technical Analysis. Commonly, Potash refers to Potassium Chloride or Muriate of Potash (MOP), however, a number of other potash variants exist with premium potash types containing micro-nutrients as well as macro nutrients such as potassium sulphate, potassium magnesium sulphate and potassium nitrate. Colluli is located about 75 kilometres from the Red Sea coast, making it among the most accessible premium potash deposits globally. Potash historical demand trends by region, from this source. On September 11, 2018, the Eritrea-Ethiopia border re-opened for the first time since 1998. Reminders. Jason Mitchell is a senior editor at Investment Monitor, with a specialisation in emerging markets. We need a bit of money.' After the Second World War, it was annexed to Ethiopia. With planned production of 1m tonnes/year of SOP, it will put Eritrea among the topten potash producers in the world. The miner said it would use the remaining cash about $12 million to identify new projects and potential new alternative growth opportunities.. Potassium bearing minerals are typically found in areas where ancient inland seas have evaporated leaving behind their minerals. 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. 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. taxation and exports, and from jobs and skills and economic development of the The report also identified how the mine could help Eritrea Is this happening to you frequently? Internal industry and services contribute the majority of the remaining GDP, while agriculture accounts for only 13% (despite employing 80% of the population). Niels Wage, CEO of Danakali, said: "We are very pleased to announce the appointment of Aggreko as our single power provider. The Colluli potash project also involves evaporation ponds, a run-of-mine (ROM) pad, a sewage treatment plant, fuel storage tanks, accommodation camp, workshops, warehouses, and a main administrative building. What are my chances of getting my money back? x][sF~w""s)d;9>u^v0@ROcTE&Agdjyr8_N>}\O_,g|yrqKbzlwGouQB b-*dkGO?-M^e1?!;=^RxGN{t2k JSUUSx=ce :jc`s>h. 1 0 obj 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. The Perth-basedminer noted that despite covid-19 restrictions, engineering, procurement and construction management (EPCM) activities have continued as scheduled. Colluli has a JORC-2012 compliant Measured, Indicated and Inferred Mineral Resource estimate of 1,289Mt @11% K20. However, China has set its sights on the country and perhaps it will receive large amounts of Chinese FDI in the future. 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. Finance > M-a. It thus follows we should keep an eye on emerging potash producers. 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 location of the Colluli potash deposit, from this source. Danakali (ASX: DNK) is the 50% owner of the Colluli Potash Project located in Eritrea. The project is the only known source of potash that allows extraction of the fertilizer in solid form. Under the current FEED study for Module 1 and 2, Danakali will be one of the lowest cost SOP producers and with the development of the loading facility at Anfile Bay costs will decrease further as transportation costs are reduced. Potash supply has historically been controlled by production cartels, such as a German export monopoly in the early 1900s, the agreement strategies between German and French producers until 1939, and then oligopolistic competition prevailing on world markets (see here). These circumstances have resulted in it becoming one of the most isolated states in the world. 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). 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. The underapplication of SOP in developing regions where the highest rates of population growth are expected, from this source. Posted by Daniel Gleeson on 21st August 2020. Adjusted net income of $0.52 beat the consensus estimate of $0.43. Colluli Potash Project, Eritrea. endobj The project has the worlds largest JORC compliant reserve at 1.1 billion tonnes. 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. The agreement can be further extended by three years if mutually agreed upon. Colluli is only 75km from the Red Sea coast, 87km from a port planned at the Anfile Bay, and 230km from the existing Port of Massawa, making it the SOP deposit closest to a coastline and giving it an advantage over competing projects in neighboring Ethiopia, such as the Yara Dallol project of Yara International ASA (. EuroChem will purchase the entire SOP output of the Colluli phase one potash project under a 10-year binding off-take agreement signed in June 2018. It has a geographic area of 117,600km2, making it slightly larger than Bulgaria. 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. The company expects to start full commercial production in mid-December 2022. 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. All primary production of potassium sulphate from kainitite worldwide commence with low potassium content brines, which require substantial solar evaporation to generate a harvest salt for subsequent processing. The Colluli potash project is expected to commence production in 2022. It is estimated that 49% of the population is Christian and a further 49% is Sunni Muslim. 7. mine-life. 6. <> of Eritrea and Ethiopia, which officially declared peace in July 2018. "The analysis of direct impacts of Colluli potash project and its potential contributions to the sustainable development agenda in Eritrea is focused on five main areas," the report states. It is estimated to have about 80,000 archaeological sites. This post has been syndicated from a third-party source. Fig. EuroChem is an outstanding partner with global reach and extensive fertiliser capabilities. Colluli is located in the Danakil Depression . Potash demand is largely driven by the need to increase crop production and by improved potash application rates, particularly in developing countries such as Asia, Africa, and Latin America, where potash has been historically under-applied relative to scientifically-recommended levels (Fig. A United Nations reportpublished last yearsuggested that Colluli could significantly boost Eritreas economy. 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. And how is that relevant here, the government has not changed since Dankalis involvement so it was certainly a government worth doing business with at some time. Based on what evidence? However, in July 2018, a peace agreement was finally reached between Afwerki and Ethiopias Prime Minister, Abiy Ahmed. Upon accepting the notice, the ministry, Danakali said, also showed support for the financing of the Colluli project by: Earth Moving Worldwide (EMW) was selected to provide mining services for the Colluli potash project in December 2019. Fig. On December 3, 2019, Africa Finance Corporation also agreed to make a US$50 million equity investment in two tranches at A$0.60 per Danakali share. 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. Profit was boosted by higher metal grades and prices. In 2019, the country received only $67.1m in foreign direct investment (FDI) inflows against $61m in 2018, according to the World Bank. Agnico Eagle's EPS beat expectations; guidance maintained. It has had a border war with Ethiopia and a clash along the border with Djibouti. "There is a supportive business environment because mining there is a very strategic industry. The project has the world's. "We have found Eritrea to be very transparent and consistent across the board," Seamus Cornelius, Danakali's executive chairman, said in an interview. DANAKALI focuses on developing the Colluli potash project in Eritrea, which is wholly owned by Colluli Mining Share Company . All land is considered state-owned and property rights are non-existent. 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. 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. The owner and developer of the project is the Colluli Mining Share Company (CMSC), a 50:50 joint-venture between Danakali and the Eritrean National Mining Company (ENAMCO). All Eritreans are subject to conscription into the military and can be compelled into forced labour that the UN says effectively abuses, exploits and enslaves them for years". 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. The Australian company Danakali is developing the Colluli potash project in Eritrea and expects to bring it into production in 2022. Apart from SOP, the salt composition at the deposit also allows for the production of other potash products including sulphate of potash-magnesia (SOP-M) and muriate of potash (MOP). The Colluli resource contains kainitite, sylvinite and carnallitite ores. Its constitution has not been implemented, the parliament has been prorogued for many years, the ruling party has not held a congress for a number of years and independent media is banned. The project has a 200-year lifecycle and is expected to start operating in 2022. Potash, an important fertiliser, is found in abundance in certain parts of Ethiopia and Eritrea. <>/Metadata 306 0 R/ViewerPreferences 307 0 R>> The Colluli potash deposit is considered to be one of the worlds shallowest evaporite mineralisation with potash resources found just 16m below the surface. The Colluli potash project is considered one of the world's most significant and lowest-cost sources of sulphate of potash (SOP), a premium grade fertilizer. 9. This geographical advantaged is unique. Some people have been in national conscription for more than 20 years. Danakali Limited is a resource company focused on the Colluli SOP (Sulphate of Potash) Project in Eritrea, East Africa. Fig. (. It also has access to solar, wind and geothermal energy systems the East African rift. The country only has one preferential trade agreement in force (with Italy) and is not a member of the World Trade Organisation. function GTranslateFireEvent(element,event){try{if(document.createEventObject){var evt=document.createEventObject();element.fireEvent('on'+event,evt)}else{var evt=document.createEvent('HTMLEvents');evt.initEvent(event,true,true);element.dispatchEvent(evt)}}catch(e){}} Standard, granular and soluble products can be produced for distribution to the market. 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. Potash is the common term for fertiliser forms of the element potassium (K). The company expects to start full commercial production in mid-December 2022. 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. 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. 9). Potash is an important fertiliser. The country also boasts impressive marine tourist sites, a wide range of flora and fauna, and scenic terrain. inequalities, climate action, peace, justice and strong institutions and 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. It also said that all vendor and contractor packages have now been received. Fig. According to Reporters Without Borders, only North Korea has less press freedom. Enter your email below to receive updates on your featured companies right to your inbox. "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.
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