4 0 obj In 2019, the country received only $67.1m in foreign direct investment (FDI) inflows against $61m in 2018, according to the World Bank. The project will be developed in multi-modules, with Module I serving as a platform for future growth. The asset has the potential to produce other fertilizer The proximity to the coast and the established port infrastructure in the Port of Massawa gives Colluli unrivalled access to global export markets, and it also decreases logistics costs from the mine gate onto the ship estimated at US$73/t. Foreign investment in most business sectors is heavily restricted and state-owned enterprises distort its markets. Colluli, furthermore, boasts the shallowest evaporite mineralisation globally and consequently has significant mining, logistics and, in turn, capital and operating cost benefits over other potash development projects in the Danakil Depression and elsewhere. endobj The company has completed a front-end engineering design for the production of potassium sulphate, otherwise known as sulphate of potash or SOP. 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). As inflation falls, what can be expected from the Bank of England in the months to come? 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. Colluli has been largely de-risked in terms of. 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. It also provides off-takers with additional confidence on Project certainty and fundability, supporting the finalisation of binding bankable offtake agreements. 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 best energy and mining stock ideas with multibagger potential. body {top:0 !important;} 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. 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. seriously, this Man is a lobbyist of TPLF A group designated as a Terrorist Organisation in Ethiopia. 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. 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. 4. This long-lasting tension has led to Eritrea's militarisation. The 600 person camp capacity is exclusive of camp services personnel, which will have an additional camp, provided by RA, located within the overall camp boundary. Annual output Information about Eritrea and the Horn of Africa. I am not receiving compensation for it (other than from Seeking Alpha). 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. Potash is the common term for fertiliser forms of the element potassium (K). It has a Human Development Index of 0.42, which puts it among the ten least-developed countries on the planet. Anyone can write a book, as long as is a white person, you would buy it even a white homeless from NYC. The mine will put Eritrea among the top ten potash producers in the world and impact the global supply chain of high-quality fertiliser. 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). Test work on the Colluli salts has been concluded and the process flow design frozen which indicates the Colluli process using filtered sea water will produce SOP at volumes we expect and at the high-grade spec the world requires. 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". 86% of retail CFD accounts lose money. Danakali Limited is a resource company focused on the Colluli SOP (Sulphate of Potash) Project in Eritrea, East Africa. Status: Design. Danakali (ASX: DNK) is the 50% owner of the Colluli Potash Project located in Eritrea. 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. Fig. 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. 2. According to Reporters Without Borders, only North Korea has less press freedom. Despite funding setbacks last year, Danakali says that Colluli, a 50:50 joint venture between Danakali and the Eritrean National Mining Corporation (ENAMCO), is on track for production in 2022. We are confident in RA Internationals capabilities to deliver a high-quality product and service.. Danakali Lmited is selling share to China. Colluli contains three potassium-bearing salts in solid form, namely. Reminders. 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. 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. 3). Have the local Afar people been displaced and supplies to their communities cut to allow access to the site? The appointment of RA International is testament to sound execution of our growth strategy, highlighting continued new business momentum with another significant award in the mining sector., Your email address will not be published. The Colluli potash mine is estimated to hold 1.1 billion tonnes of SOP ore reserves grading 10.5% potassium oxide (K2O). Shallowest known evaporite deposit globally. Eritrea has managed to fall out with and then mend fences with every one of its neighbouring countries. 03 October 2022. 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 process is expected to generate a product with a purity of 94.5%. Over 6Bt of potassium bearing salts suitable for the production of potash fertilisers have been identified in the region to date. 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. .goog-te-menu-value:hover {text-decoration:none !important;} 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. Front End Engineering Design (FEED) strongly confirms Colluli as one of the worlds most economically attractive, and fundable SOP greenfield development project. Eritrea is an ancient civilisation dating back thousands of years and was inhabited by early humans. Eritreas north-eastern and eastern parts have an extensive coastline along the Red Sea, strategically located along the Maritime Silk Road. Journalists say that getting any information out of the country is extremely difficult. I have taken a starter position and plan to build a position of meaningful size in the next couple of years. <>/ExtGState<>/Font<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/MediaBox[ 0 0 594.96 842.04] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>> With planned production of 1m tonnes/year of SOP, it will put Eritrea among the topten potash producers in the world. The company's strategy targets the development of a world-class potash project that will become pivotal for global and African agriculture. It is generally used in combination with the other two macro-nutrients, nitrogen and phosphorus, to produce a range of fertilisers, the type used being dependent on the soil to which it will be applied. 2022 The Colluli potash project is a low-cost, long-life sulphate of potash (SOP) project under development in Eritrea, Eastern Africa. 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. The deposit is located in the Danakil depression region of Eritrea, about 75km away from the Red Sea coast and 177km south-east of Asmara, the capital city (with a population of 960,000 people). It also contains other fertilizer products, such as muriate of potash (MOP) and gypsum, along with rock salt. 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. GDP dropped by -0.6% in 2020 in the wake of the Covid-19 pandemic and a locust invasion. The Colluli potash project is located in the Danakil Depression region of Eritrea, in East Africa, approximately 75km away from the Red Sea coast and approximately 177km southeast of capital Asmara. 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. Click HERE for a free trial now. Eritrea has one of the world's most brutal dictatorships, but could a huge potash mine be an economic game changer? Bloomberg News | December 23, 2022 | 7:38 am Premium Nickel aims to re-open Selebi mine in Botswana The Selebi south deposit has a resource of 11.28 million tonnes grading 0.98% nickel and 1.9% . Table 1. Danakali is developing the tier-1 Colluli potash project, Eritrea, which boasts the world's lowest costs and >200 years of mine life. 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. 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. The UN says forced labour and detention without trial are common. Niels Wage, CEO of Danakali, said: I am pleased to announce the appointment of RA International as our preferred accommodation and support services contractor. Posted by Daniel Gleeson on 21st August 2020. Morgan Leighton. Development Goals (SDGs). A United Nations report published in 2019suggested that Colluli could significantly boost the economy of Eritrea. Colluli has significant multi-commodity potential presenting major additional value upside. The west really needs to let go of calling every developing nation that doesnt bend at its will oppressive. 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. partnerships for the SDGs. Artists impression of the plant at the Colluli project. Mobile data does not exist. (. development of the project, and the expected significant boost to royalties, Following the agreement, Collulis position as an economically attractive SOP greenfield development project has been reinforced. 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. 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. Climate Change and its Impact on Insurance Market - Thematic Ukraine PESTLE Insights - A Macroeconomic Outlook Report, Germany PESTLE Insights - A Macroeconomic Outlook Report. So, as a mining jurisdiction, it has got nothing but ticks in all the right boxes.". taxation and exports, and from jobs and skills and economic development of the 3). 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. There are many sources of potassium, including. What Are the Best Fertilizer Stocks? 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. The Project has unrivalled potash product versatility. The Australian company Danakali is developing the Colluli potash project in Eritrea and expects to bring it into production in 2022. 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. The Colluli Potash Project (Project, Colluli ) is 100%. What are the best countries for cryptocurrency adoption? It has industry-leading capital intensity, forecast first quartile operating costs, and highly attractive economic returns. The above advantageous features combine to make Colluli the lowest-cost SOP producer outside of China (Fig. The report also identified how the mine could help Eritrea providing 10,000 direct and indirect local jobs. Danakali is just one of many deep-value natural resources ideas covered by Laurentian Research. "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. 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. 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. Sign up HERE today to benefit from Laurentian Research's in-depth research and the TNRH platform right away! Previously, in London, he was editor of Investment Adviser and news editor of Financial Adviser, both of which belong to the Financial Times Group, Namibian Investment Promotion and Development Board, Dubais new family office rules can drive economic growth for the UAE, Opinion: New Brexit deal can only be a good thing for Northern Ireland, African FDI into mines on the rise as continent steps up its role in energy transition, How proptech is driving sustainability: Lessons from Stockholm, How Montrals unique agtech community is boosting local food production, EU to launch quest for raw materials critical for cleantech, Finding a cure: How cell and gene therapies could revolutionise medicine, China Shanghai Corporation for Foreign Economic and Technological Cooperation, Norway PESTLE Insights - A Macroeconomic Outlook Report, PESTLE Insights: Macroeconomic Outlook Report - Norway. Fig. Two articles indicate the rapid progress towards the development of a vast potash mine in the Danakil desert. Adjusted net income of $0.52 beat the consensus estimate of $0.43. The Colluli potash project is expected to commence production in 2022. The JORC-2012 compliant ore reserve estimate at Colluli is estimated at 1,100 Mt at 10.5% K2O for 203 Mt of contained SOP equivalent (Fig. Wall Street Bulls Look Optimistic About Nutrien (NTR): Should You Buy? In comparison, Tessenderlo (OTCPK:TSDOF) and Compass Minerals (CMP) have a P/FCF multiple of 10.0X and 20.9X, respectively. I wrote this article myself, and it expresses my own opinions. The project has the world's. Potash is an important fertiliser. According to the article below the mine will require 1,115 workers during the construction phase and 600 thereafter. Required fields are marked *. As the commodity supercycle unfolds, you are invited to join The Natural Resources Hub today to take advantage of a slew of generational opportunities alongside Laurentian Research. Masdar City Free Zone, in the United Arab Emirates capital, offers a hassle-free environment in which companies can operate. Eritrean troops are fighting on the Ethiopian government's side (Eritrea borders Tigray to the north). "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. It has been a Unesco World Heritage Site since 2017. 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. The company is yet to secure an additional US$52 million of capital. 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. Over the next three decades, almost 95% of the population growth will occur in Africa, India, and South-East Asia. 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. Agnico Eagle's EPS beat expectations; guidance maintained. Please disable your ad-blocker and refresh. 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. Colluli Potash Project, Eritrea. Proudly Researched by: Melanie Miles. 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. 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. 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). Therefore, the Eritrean government has a strong incentive to see the project be built, in production, and run successfully. If you have an ad-blocker enabled you may be blocked from proceeding. Colluli is located in the Danakil Depression . it is promising future.for our country and people .Thank God. 3. 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. 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. 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. The mineralization in the Colluli deposit starts at just 16m, making it the shallowest known potash deposit in the world, and thus amenable to low-cost, open-cut mining. The 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. The project has been largely derisked with regard to geopolitics, infrastructure, off-take, and financing. 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). 11). RA, listed . It has had a border war with Ethiopia and a clash along the border with Djibouti. We use them to give you the best experience. growth and decent work, industry, innovation and infrastructure, reduced Our people is poor continue!!!! Invest in t. World potash demand has grown at an average rate of 2.5-3.0% per year since 2000 (Fig. region, chief executive Niels Wagetold MINING.COM last year. These circumstances have resulted in it becoming one of the most isolated states in the world. There are 70 Subscribers monitoring this project. The company expects to start full commercial production in mid-December 2022. MiningOther CommoditiesIndustrial Minerals, Danakali (50%) and Eritrean National Mining Corporation (ENAMCO, 50%). 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. The project is the only known source of potash that allows extraction of the fertilizer in solid form. Gensource Potash : Strategic Business Relationship and Project Update, Analysts Are Bullish on Top Materials Stocks: Albemarle (ALB), Nutrien (NTR), DraftKings To Rally Around 38%?
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