colluli potash project in eritrea 2022

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. 2. .goog-text-highlight {background-color:transparent !important;box-shadow:none !important;} 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. A United Nations report published in 2019suggested that Colluli could significantly boost the economy of Eritrea. 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. 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). 6. #goog-gt-tt {display:none !important;} In some cases, depending on the ambient conditions, this process can take over two years. It also contains other fertilizer products, such as muriate of potash (MOP) and gypsum, along with rock salt. The report also identified how the mine could help Eritrea 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. Danakali Lmited is selling share to China. The decline is mainly due to a drop in production expected at Barrick Gold's Somilo/Gounkoto mine and B2Gold's Fekola mine. 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. The UN says forced labour and detention without trial are common. I'd like to emphasize that the articles contributed by these authors are the product of their respective independent research and 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. keyValue[2].split('/')[2] : null;} 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. Colluli is the premier greenfield development project globally. Some 7 Mt of potash capacity as being forecasted back in 2015 has been removed from the supply side (Fig. 6. 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. 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). 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 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. (2) live portfolios for both capital appreciation and income generation. 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. 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. 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. We are confident in RA Internationals capabilities to deliver a high-quality product and service.. A United Nations report says that Eritrea's Danakali Colluli potash project has the potential to boost the economy of the country that was removed from the UN's sanctions list only two months ago. In turn the well-defined geological features support our ability to maximise the potential from this the multi salt deposit. Your email address will not be published. "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. 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. World potash demand has grown at an average rate of 2.5-3.0% per year since 2000 (Fig. The company is yet to secure an additional US$52 million of capital. Notify me of follow-up comments by email. However, in July 2018, a peace agreement was finally reached between Afwerki and Ethiopias Prime Minister, Abiy Ahmed. Profit was boosted by higher metal grades and prices. Colluli has significant multi-commodity potential presenting major additional value upside. 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. 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. 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 (. Sign up HERE today to benefit from Laurentian Research's in-depth research and the TNRH platform right away! 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 deposit stretches across the border into Ethiopia. 4. SOP - a premium grade fertilizer - usually grabs a higher price at US$500-650/t (see here). Danakali explored the use of filtered seawater at Colluli. 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 Colluli project requires low upfront development costs and is highly scalable for long-life production. It has been a Unesco World Heritage Site since 2017. products, such as Sulphate of PotashMagnesium (SOP-M), muriate of potash At a forward P/FCF multiple of 2.6X for Module I (2022-) and 1.3X once Module II comes on-stream in 2028, Danakali appears to be undervalued. Pilot tests from the Colluli salts have generated product samples for marketing purposes which are now being distributed to prospective customers. In June 2018, Danakali reached a binding take-or-pay offtake agreement with EuroChem Trading GmbH (EuroChem). Australia's Danakali (ASX, LON:DNK) is closer than ever to beginning the development of its world-class Colluli potash project in Eritrea, which is expected to become one of the world's. 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. For the area a high-temperature geothermal reservoir was identified in Alid with estimates of a potential heat of 250 to 300 degrees Celsius. 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. development of the project, and the expected significant boost to royalties, Colluli is located about 75 kilometres from the Red Sea coast, making it among the most accessible premium potash deposits globally. 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. AFC also agreed for an additional 39m ($50m) of strategic equity investment in Danakali in December 2019. Only 1% of the population has access to the internet, according to the World Bank. PowerMiningOil & Gas >, MiningIndustrial MineralsMajor Commodities, Lithium Americas starts construction at Thacker Pass lithium project, Advance Lithium, LitioMx in talks to establish joint venture, Jindalee unveils updated mineral resource estimate at Mcdermitt Lithium Project, Advertise with us Advertising enquiries: Roy Morris, roy.morris@progressivemediainternational.com, +44 (0) 20 7406 6613. "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. The project will be developed in multi-modules, with Module I serving as a platform for future growth. Over the next three decades, almost 95% of the population growth will occur in Africa, India, and South-East Asia. Extraction of the salts in solid form is a crucial positive differentiator of Colluli. 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. Image courtesy of Danakali. The open-cut, high-grade potash project is being developed by Colluli Mining Share Company (CMSC), a 50:50 joint venture partnership between Australias Danakali and Eritrean National Mining Corporation (ENAMCO). 4. Business intelligence for leaders in foreign direct investment. Danakali has a 50% interest in a JV with the Eritrean National Mining Corporation (or ENAMCO), which operates the Colluli project. In 2023, Botswana expects diamond output to decline by 1%. 1 0 obj 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 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. 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. After all considerations and government taxes, Danakali said it expects to receive approximately $121m. You are talking about the garbage written by Plaut ? The project is the only known source of potash that allows extraction of the fertilizer in solid form. Mobile data does not exist. 6. The FEED results and the recent completion of test work and additional verification provide a higher level of financial certainty to project financiers, further de-risking the investment proposition. The Colluli potash mine is estimated to hold 1.1 billion tonnes of SOP ore reserves grading 10.5% potassium oxide (K2O). (3) various tools to aid your investment decision making, (4) trade alerts and multiple thematic weekly newsletters and. The border with Sudan was closed until early 2019 because relations were so bad. Wall Street Bulls Look Optimistic About Nutrien (NTR): Should You Buy? 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. The Colluli Potash Project (Project, Colluli) is 100% owned by Colluli Mining Share Company (CMSC,) a 50:50 Joint Venture between Danakali Limited (DNK) and Eritrean National Mining rporation (ENAMCO) Codes: ASX: DNK, SO3-FRA, SO3-BER. These authors includeSilver Coast Research, , among others. 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? Eritrean troops are fighting on the Ethiopian government's side (Eritrea borders Tigray to the north). 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 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. Colluli is 75km from the Red Sea coast, providing unrivalled future logistics potential. Upon accepting the notice, the ministry, Danakali said, also showed support for the financing of the Colluli project by: 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. It is estimated to have about 80,000 archaeological sites. 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. If you continue using our website, we'll assume that you are happy to receive all cookies on this website. The front-end engineering and design (FEED) study for the project was completed in January 2018. The production of other agricultural and salt products, including Rock Salt, Kieserite, Gypsum and Magnesium Chloride, is also possible from the Colluli resource. 6. .goog-te-banner-frame {display:none !important;} 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. 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). 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. Fertilizer potash is needed in the sustainable production of grains, oilseeds, fruits, and vegetables. 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 deposit contains mainly three types of potassium bearing salts including sylvinite, carnallitite, and kainitite. The resource contains 303Mt @ 11% K2 0 of Measured Resource, 951Mt @ 11% K2 0 of Indicated Resource and 35Mt @ 10% K20 of Inferred Resource. Colluli has a JORC-2012 compliant Measured, Indicated and Inferred Mineral Resource estimate of 1,289Mt @11% K20. Danakali to cash out of Colluli. 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. 1. 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 project's potential profitability is helped by soaring potash prices they jumped by 300% during 2021, sitting at above $700 per tonne (CFR Brazil Spot) at the end of October 2021. 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. 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). Value: R 200 Million+. The benefits of this means we generate cash flow much earlier and more predictably relative to solution mining or brine operations. It also contains other fertilizer products, such as muriate of potash (MOP) and gypsum, along with rock salt. The Company is developing Colluli in partnership with the Eritrean National Mining Corporation (ENAMCO). 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. The country also boasts impressive marine tourist sites, a wide range of flora and fauna, and scenic terrain. the countrys GDP by 2021 and 50% of the nations exports by 2030, while and mag chloride to be commercialized with minimal further processing required. It also said that all vendor and contractor packages have now been received. February 25, 2022. 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. 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. DANAKALI focuses on developing the Colluli potash project in Eritrea, which is wholly owned by Colluli Mining Share Company . Potassium is one of three key fertiliser macro-nutrients essential for healthy soil and plant growth. There is also potential for kieserite and mag chloride to be commercialized with minimal further processing required. Annual output 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. 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. endobj 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. Fig. The Colluli Potash Project is located within the Danakil region of Eritrea, approximately 177km south-east of the capital city Asmara. (as referred to in ASX announcements of 3 October 2022, 1 December 2022, and 12 January 2023), it . Front End Engineering Design (FEED) strongly confirms Colluli as one of the worlds most economically attractive, and fundable SOP greenfield development project. The economy expanded by 2.9% in 2021 and is forecast to surge by 4.8% this year, according to the International Monetary Fund. Analysis of the potential contribution of Colluli potash project to sustainable development goals in Eritrea. Danakali (ASX: DNK) is the 50% owner of the Colluli Potash Project located in Eritrea. The removal of Eritrea from the sanction list opened up the country for foreign investments, thus significantly reducing geopolitical risk. It also contains other fertilizer products, such as muriate of potash (MOP) and gypsum, along with rock salt.There is also potential for kieserite and mag chloride to be commercialized with minimal further processing required.A United Nations report published in 2019suggested that Colluli could significantly boost the economy of Eritrea.The project is the only known source of potash that allows extraction of the fertilizer in solid form. Thank you for your comment. At Colluli, the JORC-2012 compliant mineral resource is estimated at 1,289 Mt at 11% K2O for 260 Mt of contained SOP equivalent. What are the best countries for cryptocurrency adoption? Over 6Bt of potassium bearing salts suitable for the production of potash fertilisers have been identified in the region to date. 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. Our 3 Top Picks. This long-lasting tension has led to Eritrea's militarisation. Fig. 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. The miner said it would use the remaining cash about $12 million to identify new projects and potential new alternative growth opportunities.. Colluli is a major sulphate of potash (SOP) project located in Eritrea, Eastern Africa. 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. 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. Eritrea has one of the most erratic economies in the world, partly due to chronic drought and highly variable agricultural output: its GDP surged by 31% in 2014 before plummeting by -20.6% in 2015. The company's strategy targets the development of a world-class potash project that will become pivotal for global and African agriculture. countries-EritreaReverso Context-: Only four out of now 55 countries-Eritrea, Swaziland, Libya and Somalia-lack a multi-party constitution, and the last two will get one soon. it is promising future.for our country and people .Thank God. The Colluli potash deposit is considered to be one of the worlds shallowest evaporite mineralisation with potash resources found just 16m below the surface. %PDF-1.7 The Danakil Depression is located in the Southern region of Eritrea and extends over 300km into Eastern Ethiopia. <>/Metadata 306 0 R/ViewerPreferences 307 0 R>> 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. 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. A comparison of the Colluli and competing greenfield SOP development projects in terms of the distance to the export port, from the same source as Fig. stream finished in June, will take the company a step closer to the construction phase This article lost credibility in characterizing the country of Eritrea as most oppressive regime. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Click to follow this blog and receive notifications of new posts by email. BHP officials met with Argentinian authorities this week, expressing interest in increasing investments in the San Juan province. A pre-feasibility study for the project was completed in February 2015 followed by the completion of a definitive feasibility study (DFS) in November 2015, while the mining license was granted in February 2017. The Eritrean government, through ENAMCO, has a 50% interest in the Colluli project. Niels Wage, CEO of Danakali, said: "We are very pleased to announce the appointment of Aggreko as our single power provider. 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. Simplified process flow for the production of SOP from the Colluli resource, from this source.