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. Posted by Daniel Gleeson on 21st August 2020. A United Nations report published in 2019suggested that Colluli could significantly boost the economy of Eritrea. 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% . 2022 The Colluli potash project is a low-cost, long-life sulphate of potash (SOP) project under development in Eritrea, Eastern Africa. Required fields are marked *. The Company is developing Colluli in partnership with the Eritrean National Mining Corporation (ENAMCO). 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. 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. I have no business relationship with any company whose stock is mentioned in this article. 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). 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. 7. A United Nations report published in 2019suggested that Colluli could significantly boost the economy of Eritrea. "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. February 25, 2022. Colluli is owned by the Colluli Mining Share Company, a 50:50 joint venture with the Eritrean National Mining Company. "We have found Eritrea to be very transparent and consistent across the board," Seamus Cornelius, Danakali's executive chairman, said in an interview. This article lost credibility in characterizing the country of Eritrea as most oppressive regime. 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. 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). 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. Australia's Danakali (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. 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. 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. function GTranslateFireEvent(element,event){try{if(document.createEventObject){var evt=document.createEventObject();element.fireEvent('on'+event,evt)}else{var evt=document.createEvent('HTMLEvents');evt.initEvent(event,true,true);element.dispatchEvent(evt)}}catch(e){}} 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 above advantageous features combine to make Colluli the lowest-cost SOP producer outside of China (Fig. In 1993, after a brutal war of independence from Ethiopia lasting almost three decades and led by Isaias Afwerki Eritrea became a sovereign country. The country also boasts impressive marine tourist sites, a wide range of flora and fauna, and scenic terrain. The document estimated that Colluli would contribute 3% of DANAKALI Ltd., Eritrea - Colluli Potash Project | Aktienforum | Aktien Forum | Diskussionsboard | Community von finanzen.net 3. Have the local Afar people been displaced and supplies to their communities cut to allow access to the site? The front-end engineering design (FEED), expected to be mine-life. stream 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 located in the Danakil Depression region of Eritrea and is approximately 230km by road south-east of the port of Massawa, which is Eritreas key import/export facility. The production of other agricultural and salt products, including Rock Salt, Kieserite, Gypsum and Magnesium Chloride, is also possible from the Colluli resource. 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. 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. 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. The Colluli potash deposit is considered to be one of the worlds shallowest evaporite mineralisation with potash resources found just 16m below the surface. . 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. What are my chances of getting my money back? The Colluli Potash Project (Project, Colluli ) is 100%. education, gender equality, clean water and sanitation, sustainable economic SOP in developing regions where the highest rates of population growth are expected, from. 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. It also has access to solar, wind and geothermal energy systems the East African rift. function googleTranslateElementInit2() {new google.translate.TranslateElement({pageLanguage: 'en',autoDisplay: false}, 'google_translate_element2');} Profit was boosted by higher metal grades and prices. 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. It describes Eritrea as "a dictatorship in which the media has no rights". (MOP) and gypsum, along with rock salt. 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. Only 1% of the population has access to the internet, according to the World Bank. The total measured, indicated and inferred SOP mineral resources at the deposit are estimated to be 1.29 billion tonnes grading 11% K2O. On July 9, 2018, a joint declaration of peace and friendship was signed between Eritrea and Ethiopia. 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. 10). Colluli is located about 75 kilometres from the Red Sea coast, making it among the most accessible premium potash deposits globally. The Project has unrivalled potash product versatility. The Colluli potash project is a low-cost, long-life sulphate of potash (SOP) project under development in Eritrea, Eastern Africa. Click HERE for a free trial now. Pilot tests from the Colluli salts have generated product samples for marketing purposes which are now being distributed to prospective customers. 4. They have significant experience in executing projects of the scale and quality required for the Colluli project. 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.. Upon accepting the notice, the ministry, Danakali said, also showed support for the financing of the Colluli project by: 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. 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. Reminders. A Front-End Engineering Design (FEED) study confirmed an advanced stage and economically attractive Project. 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. Discover how your business could benefit from a base in Masdar Citys economic free zone, download this free whitepaper. "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. 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. Materials handling trials have also been completed to determine the anti-caking requirements for the final SOP product. Italy created the colony of Eritrea in the 19th century around Asmara and gave it its current name. Eritrea was, until 2018, on the UNs sanctions list. The miner said it would use the remaining cash about $12 million to identify new projects and potential new alternative growth opportunities.. In June 2018, Danakali reached a binding take-or-pay offtake agreement with EuroChem Trading GmbH (EuroChem). It has had a border war with Ethiopia and a clash along the border with Djibouti. 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. Image courtesy of Danakali. 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. 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/). .goog-te-menu-value:hover {text-decoration:none !important;} The Colluli potash project is considered one of the worlds most significant and lowest-cost sources of sulphate of potash (SOP), a premium grade fertilizer. 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). The project will be developed in multi-modules, with Module I serving as a platform for future growth. Eritreas north-eastern and eastern parts have an extensive coastline along the Red Sea, strategically located along the Maritime Silk Road. After the Second World War, it was annexed to Ethiopia. 5). Sign up HERE today to benefit from Laurentian Research's in-depth research and the TNRH platform right away! 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. Our people is poor continue!!!! Economic resources for Sulphate of Potash (SOP) production are scarce, and Colluli is favourably positioned to supply the worlds fastest-growing SOP markets. Foreign investment in most business sectors is heavily restricted and state-owned enterprises distort its markets. 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$614 million of direct capital investment, generate 3% of Eritrean GDP once module I is up running, and account for 50% of Eritrean Exports by when module II is on stream. body {top:0 !important;} Fig. Under the current FEED study for Module 1 and 2, Danakali will be one of the lowest cost SOP producers and with the development of the loading facility at Anfile Bay costs will decrease further as transportation costs are reduced. According to the article below the mine will require 1,115 workers during the construction phase and 600 thereafter. function GTranslateGetCurrentLang() {var keyValue = document['cookie'].match('(^|;) ?googtrans=([^;]*)(;|$)');return keyValue ? The Colluli potash mine is estimated to hold 1.1 billion tonnes of SOP ore reserves grading 10.5% potassium oxide (K2O). The project is the only known source of potash that allows extraction of the fertilizer in solid form. The border with Sudan was closed until early 2019 because relations were so bad. 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 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 Perth-basedminer noted that despite covid-19 restrictions, engineering, procurement and construction management (EPCM) activities have continued as scheduled. Fig. 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. So, as a mining jurisdiction, it has got nothing but ticks in all the right boxes.". (3) various tools to aid your investment decision making, (4) trade alerts and multiple thematic weekly newsletters and. Following the agreement, Collulis position as an economically attractive SOP greenfield development project has been reinforced. Eritrea has huge tourism potential, but it is hard for foreign visitors to obtain a visa. produce more than 472,000 tonnes a year of Sulphate of Potash. Is this happening to you frequently? The company expects to start full commercial production in mid-December 2022. The project has been largely derisked with regard to geopolitics, infrastructure, off-take, and financing. Why isn't Europe investing more in recycling plastic. and mag chloride to be commercialized with minimal further processing required. The project has a 200-year lifecycle and is expected to start operating in 2022. Agnico Eagle's EPS beat expectations; guidance maintained. It nosedived again in 2017, this time by -10%, before jumping by 13% in 2018. The benefits of this means we generate cash flow much earlier and more predictably relative to solution mining or brine operations. 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. In July, the Eritrean Ministry of Energy & Mines paved the way for construction to start at the project after accepting the Colluli Notice of Commencement of Mine Development. region, chief executive Niels Wagetold MINING.COM last year. 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. 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. 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. Muriate of potash, i.e., MOP (KCl; 0-0-60), which is used for wheat, corn, and other chloride-tolerant crops; Sulfate of potash or SOP (K2SO4; 0-0-50-18S), which also supplies both potassium and sulfur for high yields and quality; Potassium-magnesium sulfate, i.e., SOP-M (K2SO4-2MgSO4; 0-0-22-22S-11Mg) used as specialty fertilizer; Potassium thiosulfate (K2S2O3; 0-0-25-17S); and, Potassium nitrate (KNO3; 13-0-44) used for chloride sensitive crops that require additional nitrogen (see. Colluli Mining Share Company secured 165m ($200m) of senior debt finance from the Africa Finance Corporation (AFC) and the African Export-Import Bank (Afreximbank) in August 2019. 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.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 miner said it would use the remaining cash about $12 million to identify new projects and potential new alternative growth opportunities.The Colluli potash project is considered one of the worlds most significant and lowest-cost sources of sulphate of potash (SOP), a premium grade fertilizer.The project has the worlds largest JORC compliant reserve at 1.1 billion tonnes. 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. of Eritrea and Ethiopia, which officially declared peace in July 2018. Has access to the Ethiopian side of the deposit been guaranteed? 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 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. Its constitution has not been implemented, the parliament has been prorogued for many years, the ruling party has not held a congress for a number of years and independent media is banned. The 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. Fig. "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. 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. Mobile data does not exist. Wall Street Bulls Look Optimistic About Nutrien (NTR): Should You Buy? These alternative producers require substantial lead times to generate their harvest salts for processing. providing 10,000 direct and indirect local jobs. Some 7 Mt of potash capacity as being forecasted back in 2015 has been removed from the supply side (Fig. The company has completed a front-end engineering design for the production of potassium sulphate, otherwise known as sulphate of potash or SOP. Over the next three decades, almost 95% of the population growth will occur in Africa, India, and South-East Asia. 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. According to Reporters Without Borders, only North Korea has less press freedom. Please. 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. 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 stock seems to be agitating for a breakout in recent weeks (Fig. Potassium bearing minerals are typically found in areas where ancient inland seas have evaporated leaving behind their minerals. SOP - a premium grade fertilizer - usually grabs a higher price at US$500-650/t (see here). 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. 4 0 obj The government will benefit from the longer-term 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. It is actually resistant to the wests oppression in the most pure sense of the term. Danakali (DNK) - Technical Analysis. It also has access to solar, wind and geothermal energy systems the East African rift. It has been a Unesco World Heritage Site since 2017. Additional details about the agreement are available in the following announcement >>. .goog-text-highlight {background-color:transparent !important;box-shadow:none !important;} Flour was awarded the FEED contract for the Colluli potash project in January 2017. 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). products, such as Sulphate of PotashMagnesium (SOP-M), muriate of potash "A lot of the troops that he had under his command all of whom were volunteers, all of whom were guerrilla fighters had been fighting, some of them, for 10, 15 years without pay. Information about Eritrea and the Horn of Africa. 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. RA, listed . Standard, granular and soluble products can be produced for distribution to the market.
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