colluli potash project in eritrea 2022 colluli potash project in eritrea 2022

Value: R 200 Million+. 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. 4 0 obj He is one of the world's most brutal and paranoid dictators and has repressed the population for many decades. 11). 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. After the Second World War, it was annexed to Ethiopia. The Colluli potash mine could be an economic game changer for Eritrea but the country is unlikely to undergo an economic transformation as long as Afwerki is in power. Producer of Potassium is one of three key fertiliser macro-nutrients essential for healthy soil and plant growth. inequalities, climate action, peace, justice and strong institutions and 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. RA, listed . These include: No poverty, zero hunger, quality Colluli is a major sulphate of potash (SOP) project located in Eritrea, Eastern Africa. The company expects to start full commercial production in mid-December 2022. 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 Colluli project is located in the Danakil Depression region of Eritrea, East Africa, about 75 km from the Red Sea coast The Perth-based miner noted that despite covid-19 restrictions,. However, the country is home to one of the world's biggest potash deposits which straddles the border with Ethiopia. At Colluli, the JORC-2012 compliant mineral resource is estimated at 1,289 Mt at 11% K2O for 260 Mt of contained SOP equivalent. 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. 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. It has been a Unesco World Heritage Site since 2017. To open fire on your own disabled [people] is pretty appalling.". Profit was boosted by higher metal grades and prices. 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). 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 Human Development Index of 0.42, which puts it among the ten least-developed countries on the planet. By. (MOP) and gypsum, along with rock salt. 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 contains other fertilizer products, such as muriate of potash (MOP) and gypsum, along with rock salt. Colluli has significant multi-commodity potential presenting major additional value upside. Enter your email below to receive updates on your featured companies right to your inbox. As a tier-1 potash deposit with a number of unique advantages to its favor, the fully-permitted Colluli carries little underground geological risk. 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. 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. 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. %PDF-1.7 Upon accepting the notice, the ministry, Danakali said, also showed support for the financing of the Colluli project by: 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. 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. Colluli has a JORC-2012 compliant measured, indicated and inferred resource of 1,289 Mt at 11% K20 equivalent and 7% kieserite. 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/). These circumstances have resulted in it becoming one of the most isolated states in the world. Shareholders are slated to . A big economic change will come to eritrea, proud to be an nseritrea. 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. What Are the Best Fertilizer Stocks? With planned production of 1m tonnes/year of SOP, it will put Eritrea among the topten potash producers in the world. The project will be developed in multi-modules, with Module I serving as a platform for future growth. They are in deep need. Some 7 Mt of potash capacity as being forecasted back in 2015 has been removed from the supply side (Fig. Members of The Natural Resources Hub get exclusive ideas and guidance to navigate any climate. In November 2020, a conflict broke out in the mountainous region of Ethiopia, called Tigray, between Tigrayan forces and the Ethiopian federal troops. With mineralisation commencing at just 16m, the Colluli resource is the shallowest known evaporite deposit globally and is amenable to open-cut mining. A comparison of Colluli with vertically-integrated SOP producing competitors, from the same source as Fig. Colluli has been largely de-risked in terms of. 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. Colluli is positioned very close to vital potash markets. Potash historical demand trends by region, from this source. 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 assesses a wide range of econometric data and includes findings . It is estimated that 49% of the population is Christian and a further 49% is Sunni Muslim. The Colluli project requires low upfront development costs and is highly scalable for long-life production. . The construction works for the Colluli potash mine are expected to be started in 2021 with the start of production expected in 2022. There is also potential for kieserite and mag chloride to be commercialized with minimal further processing required. There are many sources of potassium, including. 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). 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. I have no business relationship with any company whose stock is mentioned in this article. The development of the Colluli potash projects coincides A port development at Anfile Bay could assist in unlocking this potential. The above mineral reserves support 215 years of SOP production at 944 Ktpa as envisaged in modules I and II development plan. 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 UN says forced labour and detention without trial are common. Danakali to cash out of Colluli. stream In food production, potassium is removed from the soil in harvested crops and must be replaced in order to maintain future crop growth. Fig. Select LanguageChinese (Simplified)EnglishGerman Journalists say that getting any information out of the country is extremely difficult. It describes Eritrea as "a dictatorship in which the media has no rights". Danakali is just one of many deep-value natural resources ideas covered by Laurentian Research. The deposit contains mainly three types of potassium bearing salts including sylvinite, carnallitite, and kainitite. ( source):Danakalihttps://www.danakali.com.au/You can play an important role in investing in a truly once in a lifetime business opportunity. The border lands mostly arable are unusable for farming purposes, because of unexploded land mines left over from the war of independence. Front End Engineering Design (FEED) strongly confirms Colluli as one of the worlds most economically attractive, and fundable SOP greenfield development project. 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. Has access to the Ethiopian side of the deposit been guaranteed? (. 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. There are 70 Subscribers monitoring this project. Danakali Lmited is selling share to China. 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. partnerships for the SDGs. Jason Mitchell is a senior editor at Investment Monitor, with a specialisation in emerging markets. Over 100kg of Colluli product was tested at Ludman Industries in the USA for product compaction behaviour. Fig. 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. 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. 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 removal of Eritrea from the sanction list opened up the country for foreign investments, thus significantly reducing geopolitical risk. The miner said it would use the remaining cash about $12 million to identify new projects and potential new alternative growth opportunities.. However, China has set its sights on the country and perhaps it will receive large amounts of Chinese FDI in the future. The mine will put Eritrea among the top ten potash producers in the world and impact the global supply chain of high-quality fertiliser. 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. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address. keyValue[2].split('/')[2] : null;} Fig. The front-end engineering and design (FEED) study for the project was completed in January 2018. of Eritrea and Ethiopia, which officially declared peace in July 2018. 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 (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. I am not receiving compensation for it (other than from Seeking Alpha). The FEED economic estimates, from the same source as Fig. Looking for a helping hand in the market? Demand for fertiliser is driven by population and economic growth which directly translates to food demand. The company has completed a front-end engineering design for the production of potassium sulphate, otherwise known as sulphate of potash or SOP. with the move towards diplomatic relations between the once feuding countries 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. If you have an ad-blocker enabled you may be blocked from proceeding. It also has access to solar, wind and geothermal energy systems the East African rift. 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. Niels Wage, CEO of Danakali, said: "We are very pleased to announce the appointment of Aggreko as our single power provider. 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). 5. In June 2018, Danakali reached a binding take-or-pay offtake agreement with EuroChem Trading GmbH. 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. 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). Das wrde mich fr Eritrea sehr freuen und hoffe das es den Menschen dort zugute kommt.Ich liebe dieses Land zumal meine Tochter einen eritreischen Vater hat.. Additional details about the agreement are available in the following announcement >>. Economic resources for Sulphate of Potash (SOP) production are scarce, and Colluli is favourably positioned to supply the worlds fastest-growing SOP markets. MiningOther CommoditiesIndustrial Minerals, Danakali (50%) and Eritrean National Mining Corporation (ENAMCO, 50%). Danakali (ASX: DNK) is the 50% owner of the Colluli Potash Project located in Eritrea. Simplified process flow for the production of SOP from the Colluli resource, from this source. The front-end engineering and design (FEED) study for the project was completed in January 2018. I am not receiving compensation for it (other than from Seeking Alpha). 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. Eritreas north-eastern and eastern parts have an extensive coastline along the Red Sea, strategically located along the Maritime Silk Road. SOP - a premium grade fertilizer - usually grabs a higher price at US$500-650/t (see here). We are confident in RA Internationals capabilities to deliver a high-quality product and service.. Image courtesy of Danakali. 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. Fig. Danakali explored the use of filtered seawater at Colluli. The miner said it would use the remaining cash about $12 million to identify new projects and potential new alternative growth opportunities.. 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. 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. growth and decent work, industry, innovation and infrastructure, reduced 1). DANAKALI focuses on developing the Colluli potash project in Eritrea, which is wholly owned by Colluli Mining Share Company . The government will benefit from the longer-term (. 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. 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 was, until 2018, on the UNs sanctions list. I have taken a starter position and plan to build a position of meaningful size in the next couple of years. Why isn't Europe investing more in recycling plastic. The country with an estimated $2.48bn economy and 3.6 million inhabitants has been ruled with an iron fist by its dictator President Isaias Afwerki, now aged 75 since he led it to independence from Ethiopia in 1993. The three key objectives set for the second phase of development included updating the capital estimate, project schedule and identifying key test work required to move into Phase 3. Morgan Leighton. According to Reporters Without Borders, only North Korea has less press freedom. The agreement can be further extended by three years if mutually agreed upon. In comparison, Tessenderlo (OTCPK:TSDOF) and Compass Minerals (CMP) have a P/FCF multiple of 10.0X and 20.9X, respectively. The company expects to start full commercial production in mid-December 2022. The project has now obtained all licenses and permits within the license area and has also been granted all required permits, licences and authorisations for infrastructure construction and development outside the Colluli mining license area. 4. In 1993, after a brutal war of independence from Ethiopia lasting almost three decades and led by Isaias Afwerki Eritrea became a sovereign country. 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. On July 9, 2018, a joint declaration of peace and friendship was signed between Eritrea and Ethiopia. Danakali Limited is a resource company focused on the Colluli SOP (Sulphate of Potash) Project in Eritrea, East Africa. During the long struggle, the people of Eritrea managed to forge a common national consciousness but, with peace established, they faced the task of overcoming their ethnic and religious differences in order to raise the country from poverty made worse by years of drought, neglect and war. It also contains other fertilizer products, such as muriate of potash (MOP) and gypsum, along with rock salt. 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. 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. Table 1. 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. 1 0 obj Send Me Updates. finished in June, will take the company a step closer to the construction phase 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. US Level 1 ADR's OTC-DNKLY, CUSIP.23585T101 The world's largest JORC compliant solid salt, Sulphate of . A two-and-a-half-year border war between Ethiopia and Eritrea ended in June 2000 and was followed by about eight years of heightened tension and hostility between the two countries. 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. Internal industry and services contribute the majority of the remaining GDP, while agriculture accounts for only 13% (despite employing 80% of the population). The best energy and mining stock ideas with multibagger potential. All land is considered state-owned and property rights are non-existent. Business intelligence for leaders in foreign direct investment. Both are below. Thank you for your comment. the countrys GDP by 2021 and 50% of the nations exports by 2030, while 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. According to the UNDP report entitled "Analysis of the potential contribution of Colluli potash project to sustainable development goals in Eritrea," Colluli is estimated to attract US$614 million of direct capital investment, generate 3% of Eritrean GDP once module I is up running, and account for 50% of Eritrean Exports by when module II is on stream. Surface mining allows controlled extraction, predictable production rates and efficient stockpiling of additional economic salts know to us. Fig. Fig. In 2019, the country received only $67.1m in foreign direct investment (FDI) inflows against $61m in 2018, according to the World Bank. "We have found Eritrea to be very transparent and consistent across the board," Seamus Cornelius, Danakali's executive chairman, said in an interview. The country only has one preferential trade agreement in force (with Italy) and is not a member of the World Trade Organisation. I think you should research about th e author. produce more than 472,000 tonnes a year of Sulphate of Potash. could rise to almost 944,000 tonnes if Danakali decides to go ahead with a