Danakali has reported a 1.1 billion ore reserve with a mine life of almost 200 years. 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. 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. Eritrea has managed to fall out with and then mend fences with every one of its neighbouring countries. The Company is developing Colluli in partnership with the Eritrean National Mining Corporation (ENAMCO). I wrote this article myself, and it expresses my own opinions. DANAKALI Ltd., Eritrea - Colluli Potash Project | Aktienforum | Aktien Forum | Diskussionsboard | Community von finanzen.net 86% of retail CFD accounts lose money. PDF owned by For personal use only Analysis of the Potential Contributions of Colluli Potash Project to Fig. 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). By downloading this Whitepaper, you acknowledge that we may share your information with our white paper partners/sponsors who may contact you directly with information on their products and services. 6. 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. It has had a border war with Ethiopia and a clash along the border with Djibouti. 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. Colluli is located in the Danakil Depression region of Eritrea and is approximately 230km by road southeast of the port of Massawa, which is Eritrea's key import/export facility. Construction nears at Colluli potash project following Eritrea ministry 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. The project has the world's. Annual output The project is on the Eritrean side of the border, giving Colluli a significant advantage relative to the other potash development projects in the Danakil Depression, which need to ship from the Tadjoura Port in Djibouti over 790km by road from the closest project on the Ethiopian side of the border. It also has access to solar, wind and geothermal energy systems the East African rift. 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. 3). Eritrea one of the worlds most repressive and secretive states, known as the North Korea of Africa is poised to disrupt the global supply chain of fertiliser. 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. 1. 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. 1). It thus follows we should keep an eye on emerging potash producers. The deposit stretches across the border into Ethiopia. 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. The project will be developed in multi-modules, with Module I serving as a platform for future growth. Foreign investment in most business sectors is heavily restricted and state-owned enterprises distort its markets. 6. Finance > M-a. In addition to these benefits our grade control drilling provides us to approach the open cut mine plan with a high degree of selectivity and certainty. Plus500. The above advantageous features combine to make Colluli the lowest-cost SOP producer outside of China (Fig. 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. The project has been largely derisked with regard to geopolitics, infrastructure, off-take, and financing. About 55% of the Eritrean population is Tigrinya while 30% is Tigre, but there are a number of other smaller ethnicities including Saho and Kunama. Danakali has 100% of its sales locked in for the first ten years and with the option to extend for a further three through a take-or-pay offtake agreement with EuroChem, the Swiss mineral fertiliser producer. body {top:0 !important;} Eritreas north-eastern and eastern parts have an extensive coastline along the Red Sea, strategically located along the Maritime Silk Road. DRA Global was selected as the engineering, procurement, construction and management (EPCM) contractor for the project in September 2018. The deposit contains mainly three types of potassium bearing salts including sylvinite, carnallitite, and kainitite. (3) various tools to aid your investment decision making, (4) trade alerts and multiple thematic weekly newsletters and. 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. 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/). 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. The Colluli Potash Project is located within the Danakil region of Eritrea, approximately 177km south-east of the capital city Asmara. There is also potential for kieserite and mag chloride to be commercialized with minimal further processing required. Profit was boosted by higher metal grades and prices. 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. 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. 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). I have no business relationship with any company whose stock is mentioned in this article. The mine will put Eritrea among the top ten potash producers in the world and impact the global supply chain of high-quality fertiliser. There are many sources of potassium, including. The Colluli Potash Project (Project, Colluli ) is 100%. Shareholders are slated to . 6. Colluli - Danakali Limited 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. The Colluli resource contains kainitite, sylvinite and carnallitite ores. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Colluli is located in the Danakil Depression . My References:Danakali Ltd:https://www.danakali.com.au/ Interested in supporting this channel: Paypal: PayPal . 3 0 obj PDF The Colluli Potash Project Project, Colluli) Quarterly Report CMSC, For Colluli is located about 75 kilometres from the Red Sea coast, making it among the most accessible premium potash deposits globally. Disclosure: I am/we are long SBMSF, CMP. The government monitors telephone and internet traffic and runs an extensive domestic surveillance system. Some 7 Mt of potash capacity as being forecasted back in 2015 has been removed from the supply side (Fig. The SOP quality spectrum, from the same source as Fig. could rise to almost 944,000 tonnes if Danakali decides to go ahead with a After the Second World War, it was annexed to Ethiopia. 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. Is this happening to you frequently? 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. 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. Eritrea has historically struggled to attract large investments because of its unfavourable business climate. 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. Danakali eyes finish line for Eritrea potash project Our 3 Top Picks. In the long run, potash consumption is expected to continue to grow as a result of population expansion. We need a bit of money.' "There is a supportive business environment because mining there is a very strategic industry. .goog-te-banner-frame {display:none !important;} 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). Business intelligence for leaders in foreign direct investment. Last Updated on: 01 December 2022. At a SOP price of US$650/tonne, annual production would generate revenue equivalent to . it is promising future.for our country and people .Thank God. Reminders. 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. Only 12% of the total land area is suitable for farming in part due to the countrys rocky and mountainous terrain but also due to a persistent drought that afflicts much of the remaining countryside. Eritrea has one of the world's most brutal dictatorships, but could a huge potash mine be an economic game changer? Sign up HERE today to benefit from Laurentian Research's in-depth research and the TNRH platform right away! "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 extracted ore will be sent to a nearby processing plant where it will undergo crushing, flotation, mixing, and drying for the production of the final SOP product. Profit was boosted by higher metal grades and prices. Disclosure: Besides myself, TNRH is fortunate enough to have multiple other contributing authors who post articles for and share their views with our thriving community. 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. 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). DANAKALI Ltd., Eritrea - Colluli Potash Project | Aktienforum | Aktien Agnico Eagle's EPS beat expectations; guidance maintained. endobj 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. 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. Across the country, an estimated two-thirds of households are impacted by food insecurity. Please disable your ad-blocker and refresh. Producer of The construction works for the Colluli potash mine are expected to be started in 2021 with the start of production expected in 2022. Fig. DANAKALI Ltd., Eritrea - Colluli Potash Project | Aktienforum | Aktien Forum | Diskussionsboard | Community von finanzen.at 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. education, gender equality, clean water and sanitation, sustainable economic It nosedived again in 2017, this time by -10%, before jumping by 13% in 2018. 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. Has access to the Ethiopian side of the deposit been guaranteed? With mineralisation commencing at just 16m, the Colluli resource is the shallowest known evaporite deposit globally and is amenable to open-cut mining. 5). If you continue using our website, we'll assume that you are happy to receive all cookies on this website. 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. He is one of the world's most brutal and paranoid dictators and has repressed the population for many decades. and mag chloride to be commercialized with minimal further processing required. The plant administration and services facilities will incorporate administration offices, medical clinic, warehouses, and workshops (see graphic above, credit: RA International). 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. The JORC-2012 compliant mineral resource estimate, from this source. According to the article below the mine will require 1,115 workers during the construction phase and 600 thereafter. Colluli has a JORC-2012 compliant Measured, Indicated and Inferred Mineral Resource estimate of 1,289Mt @11% K20. Colluli contains three potassium-bearing salts in solid form, namely. 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. 4). In 2019, the country received only $67.1m in foreign direct investment (FDI) inflows against $61m in 2018, according to the World Bank. Colluli Potash Mine, Danakali Depression, Eritrea, Eastern Africa Eritrea has a command economy under the control of the sole political party, the People's Front for Democracy and Justice, led by Afwerki. Danakali to sell stake in flagship Colluli potash project in Eritrea 2 0 obj Danakali to cash out of Colluli. It assesses a wide range of econometric data and includes findings . With planned production of 1m tonnes/year of SOP, it will put Eritrea among the topten potash producers in the world. This is a report that was prepared by independent consultants and initiated and funded by the United Nations Development Programme (UNDP) on the potential contributions of Colluli to Eritrea's Sustainable Development Goals has been released. Danakali: Why This Little-Known Potash Developer Is A Buy Colluli is the premier greenfield development project globally. This article lost credibility in characterizing the country of Eritrea as most oppressive regime. So, as a mining jurisdiction, it has got nothing but ticks in all the right boxes.". Danakali (DNK) - Technical Analysis - Crux Investor endobj If you have an ad-blocker enabled you may be blocked from proceeding. In some cases, depending on the ambient conditions, this process can take over two years. Potash reserves among the world's largest - Economist Intelligence Unit In the initial phase of operation, Wage said, Colluli would The country only has one preferential trade agreement in force (with Italy) and is not a member of the World Trade Organisation. In November 2021, Eritrea also signed a memorandum of understanding with China to join its Belt and Road Initiative. The miner said it would use the remaining cash about $12 million to identify new projects and potential new alternative growth opportunities.. Additionally, it will provide comprehensive camp services incorporating catering, cleaning, laundry, pest and vector control, grounds keeping and waste management. The border lands mostly arable are unusable for farming purposes, because of unexploded land mines left over from the war of independence. The project is the only known source of potash that allows extraction of the fertilizer in solid form. (. It also has access to solar, wind and geothermal energy systems the East African rift. View the original article here. Eritrea's potash mining takes shape but questions remain In turn the well-defined geological features support our ability to maximise the potential from this the multi salt deposit. 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. 1 0 obj It also provides off-takers with additional confidence on Project certainty and fundability, supporting the finalisation of binding bankable offtake agreements. 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. 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. 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. In addition to SOP, MOP, and SOP-M producible at Colluli, Danakali can also produce rock salt, kieserite, gypsum, and magnesium chloride, upon the completion of the Anfile Bay port. All land is considered state-owned and property rights are non-existent. Colluli, owned 50:50 by Danakali and the Eritrean National Mining Corporation, has a JORC-2012 compliant measured, indicated and inferred resource of 1,289 Mt at 11% K20 equivalent and 7% kieserite. The Colluli potash project is a low-cost, long-life sulphate of potash (SOP) project under development in Eritrea, Eastern Africa. The FEED economic estimates, from the same source as Fig. It also has access to solar, wind and geothermal energy systems - the East African rift. Colluli will be a simple open-cut mining operation utilising truck and shovel methods complemented by continuous surface miners. 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. The Colluli potash mine is estimated to hold 1.1 billion tonnes of SOP ore reserves grading 10.5% potassium oxide (K2O). #google_translate_element2 {display:none!important;} Colluli is 75km from the Red Sea coast, providing unrivalled future logistics potential. Danakali appoints Aggreko as power contractor at Colluli Some abridged samples of my writings are published here, while 4X as many unabridged articles are posted without delay at TNRH, a popular Seeking Alpha Marketplace service, where you also find: (1) a stream of high-alpha actionable investment ideas. 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. 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. Potash, an important fertiliser, could be a game changer for Eritrea and other African countries. The production of other agricultural and salt products, including Rock Salt, Kieserite, Gypsum and Magnesium Chloride, is also possible from the Colluli resource. GDP dropped by -0.6% in 2020 in the wake of the Covid-19 pandemic and a locust invasion. As a tier-1 potash deposit with a number of unique advantages to its favor, the fully-permitted Colluli carries little underground geological risk. I'd like to emphasize that the articles contributed by these authors are the product of their respective independent research and analysis. A comparison of Colluli with vertically-integrated SOP producing competitors, from the same source as Fig. Eritrea: potash and the pariah state - Investment Monitor The country also has 486,200 refugees, including 123,413 living in Sudan, 172,750 in Ethiopia and 18,976 in Egypt. 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. "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. phosphorus mines in usa 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. SOP - a premium grade fertilizer - usually grabs a higher price at US$500-650/t (see here). 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 project is estimated to have a net present value of $902m and an internal rate of return of 29.9%, according to the London Stock Exchange. Our people is poor continue!!!! Colluli is without peer on capital intensity and production capacity with the ability to expand rapidly. MoEM has shown support for the financing of the project by granting time to begin commercial production (up to mid-December 2022) as well as . We have recently upgraded our technology platform. Eritrea has huge tourism potential, but it is hard for foreign visitors to obtain a visa. The project, 50/50 owned by Australian mining company Danakali and the Eritrean Government, is rapidly progressing towards construction. Materials handling trials have also been completed to determine the anti-caking requirements for the final SOP product. The Colluli project requires low upfront development costs and is highly scalable for long-life production. The accommodation camp, meanwhile, has been designed to accommodate 600 personnel during the production phase with the flexibility to accommodate 1,115 during the construction phase. 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. In food production, potassium is removed from the soil in harvested crops and must be replaced in order to maintain future crop growth. The total measured, indicated, and inferred SOP mineral resources at the deposit are estimated to be 1.29 billion tonnes grading 11% K2O. 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). To open fire on your own disabled [people] is pretty appalling.". 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. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address. Following the agreement, Collulis position as an economically attractive SOP greenfield development project has been reinforced. Have the local Afar people been displaced and supplies to their communities cut to allow access to the site? 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). The front-end engineering design (FEED), expected to be Posted by Daniel Gleeson on 21st August 2020. Eritrea is an ancient civilisation dating back thousands of years and was inhabited by early humans. 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 is owned by the Colluli Mining Share Company, a 50:50 joint venture with the Eritrean National Mining Company. Reverso Context-: A big economic change will come to eritrea, proud to be an nseritrea. Wall Street Bulls Look Optimistic About Nutrien (NTR): Should You Buy? The stock seems to be agitating for a breakout in recent weeks (Fig. Information about Eritrea and the Horn of Africa. The Danakil Depression, which extends over 300km into eastern Ethiopia, hosts over 6,000 Mt of potassium-bearing salts suitable for the production of potash fertilizers. US Level 1 ADR's OTC-DNKLY, CUSIP.23585T101 The world's largest JORC compliant solid salt, Sulphate of . Additional details about the agreement are available in the following announcement >>. The independent study, commissioned and funded by the UN Development Program (UNDP), assesses a wide range of econometric data and includes .