colluli potash project in eritrea 2022

Earth Moving Worldwide (EMW) was selected to provide mining services for the Colluli potash project in December 2019. Shallowest known evaporite deposit globally. 4. There are 70 Subscribers monitoring this project. 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 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. 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. 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. 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. 11. The cost curve of SOP production as of 2018, from the same source as Fig. 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. A number of unique characteristics make Colluli one of the world's largest and lowest-cost deposits of SOP. Thank you for your comment. The project has the worlds largest JORC compliant reserve at 1.1 billion tonnes. 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,. Internal industry and services contribute the majority of the remaining GDP, while agriculture accounts for only 13% (despite employing 80% of the population). The removal of Eritrea from the sanction list opened up the country for foreign investments, thus significantly reducing geopolitical risk. 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. .goog-te-banner-frame {display:none !important;} 4. 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. Fig. In June 2018, Danakali reached a binding take-or-pay offtake agreement with EuroChem Trading GmbH. 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. 9. 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. The Colluli project is a 5050 joint venture between South Boulder Mines and the government-owned Eritrean National Mining Corporation. Danakali has a 50% interest in a JV with the Eritrean National Mining Corporation (or ENAMCO), which operates the Colluli project. The Colluli potash project is a low-cost, long-life sulphate of potash (SOP) project under development in Eritrea, Eastern Africa. Front End Engineering Design (FEED) strongly confirms Colluli as one of the worlds most economically attractive, and fundable SOP greenfield development project. (2) live portfolios for both capital appreciation and income generation. 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. 6. It has been a Unesco World Heritage Site since 2017. (as referred to in ASX announcements of 3 October 2022, 1 December 2022, and 12 January 2023), it . The stock seems to be agitating for a breakout in recent weeks (Fig. Posted by Daniel Gleeson on 21st August 2020. The UN says forced labour and detention without trial are common. Send Me Updates. By clicking the Download Free Whitepaper button, you accept the terms and conditions and acknowledge that your data will be used as described in the Masdar City Free Zone privacy policy Fig. body {top:0 !important;} 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. Sylvinite and carnallitite both produce potassium chloride, which is then combined with decomposed kainitite to form high purity potassium sulphate. The Danakil salt basin, in Eritrea, is a positively unique example as it is one of only very few known potash deposits where kainite, a sulphate bearing mineral key for potassium sulphate production, is found in solid form. 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. Many Eritreans hoped that the peace deal with Ethiopia would create economic opportunities for the country, but there is little sign of that happening yet. Disclosure: I am/we are long SBMSF, CMP. 1). Eritrea has historically struggled to attract large investments because of its unfavourable business climate. 3). There are many sources of potassium, including. 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 agreement can be further extended by three years if mutually agreed upon. Artists impression of the plant at the Colluli project. I think you should research about th e author. 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). The Colluli potash deposit is considered to be one of the worlds shallowest evaporite mineralisation with potash resources found just 16m below the surface. The country only has one preferential trade agreement in force (with Italy) and is not a member of the World Trade Organisation. 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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). Eritrea had been under UN sanction per Security Council Resolution 1907 since December 23, 2009, for the government's role in aiding Al-Shabaab in Somalia and refusing to withdraw troops from its disputed border with Djibouti following a conflict in 2008. The front-end engineering design (FEED), expected to be Is this happening to you frequently? Development is already underway with expected production in 2022. 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. The economy expanded by 2.9% in 2021 and is forecast to surge by 4.8% this year, according to the International Monetary Fund. I wrote this article myself, and it expresses my own opinions. 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. In turn the well-defined geological features support our ability to maximise the potential from this the multi salt deposit. 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 mine is estimated to hold 1.1 billion tonnes of SOP ore reserves grading 10.5% potassium oxide (K2O). Two articles indicate the rapid progress towards the development of a vast potash mine in the Danakil desert. The project will be developed in multi-modules, with Module I serving as a platform for future growth. 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. 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. The miner said it would use the remaining cash about $12 million to identify new projects and potential new alternative growth opportunities.. 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. In food production, potassium is removed from the soil in harvested crops and must be replaced in order to maintain future crop growth. 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. The Colluli project requires low upfront development costs and is highly scalable for long-life production. The Colluli process is expected to generate a product with a purity of 94.5%. Business intelligence for leaders in foreign direct investment. Producer of Fig. This long-lasting tension has led to Eritrea's militarisation. Development Goals (SDGs). It also contains other fertilizer products, such as muriate of potash (MOP) and gypsum, along with rock salt. 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. The project's potential profitability is helped by soaring potash prices they jumped by 300% during 2021, sitting at above $700 per tonne (CFR Brazil Spot) at the end of October 2021. The project is the only known source of potash that allows extraction of the fertilizer in solid form. Morgan Leighton. Image courtesy of Danakali. In June 2018, Danakali reached a binding take-or-pay offtake agreement with EuroChem Trading GmbH (EuroChem). The Eritrean government, through ENAMCO, has a 50% interest in the Colluli project. Upon accepting the notice, the ministry, Danakali said, also showed support for the financing of the Colluli project by: Journalists say that getting any information out of the country is extremely difficult. function GTranslateGetCurrentLang() {var keyValue = document['cookie'].match('(^|;) ?googtrans=([^;]*)(;|$)');return keyValue ? Economic resources for Sulphate of Potash (SOP) production are scarce, and Colluli is favourably positioned to supply the worlds fastest-growing SOP markets. Potash is an important fertiliser. He is one of the world's most brutal and paranoid dictators and has repressed the population for many decades. Colluli has a JORC-2012 compliant measured, indicated and inferred resource of 1,289 Mt at 11% K20 equivalent and 7% kieserite. It also has access to solar, wind and geothermal energy systems the East African rift. Annual output The Colluli potash mine is estimated to hold 1.1 billion tonnes of SOP ore reserves grading 10.5% potassium oxide (K2O). DANAKALI Ltd., Eritrea - Colluli Potash Project | Aktienforum | Aktien Forum | Diskussionsboard | Community von finanzen.net RA, listed . 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 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. Members of The Natural Resources Hub get exclusive ideas and guidance to navigate any climate. Climate Change and its Impact on Insurance Market - Thematic Ukraine PESTLE Insights - A Macroeconomic Outlook Report, Germany PESTLE Insights - A Macroeconomic Outlook Report. Danakali Limited is a resource company focused on the Colluli SOP (Sulphate of Potash) Project in Eritrea, East Africa. They have significant experience in executing projects of the scale and quality required for the Colluli project. A United Nations report published in 2019suggested that Colluli could significantly boost the economy of Eritrea. But when [Afwerki] discovers that his authority is being questioned after independence, he begins reacting in the same way. The government will benefit from the longer-term Following the agreement, Collulis position as an economically attractive SOP greenfield development project has been reinforced. 8. It has a geographic area of 117,600km2, making it slightly larger than Bulgaria. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. %PDF-1.7 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. The mine will put Eritrea among the top ten potash producers in the world and impact the global supply chain of high-quality fertiliser. Therefore, a wide moat that's rarely seen in miners of other commodities can be found among potash miners, such as Nutrien Ltd (NTR), as discussed by fellow Seeking Alpha authors. Click HERE for a free trial now. 6. In November 2020, a conflict broke out in the mountainous region of Ethiopia, called Tigray, between Tigrayan forces and the Ethiopian federal troops. I have taken a starter position and plan to build a position of meaningful size in the next couple of years. 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. 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). 1. GDP dropped by -0.6% in 2020 in the wake of the Covid-19 pandemic and a locust invasion. In some cases, depending on the ambient conditions, this process can take over two years. In 1993, after a brutal war of independence from Ethiopia lasting almost three decades and led by Isaias Afwerki Eritrea became a sovereign country. Unlike North Korea, China or Iran, social media is mostly unregulated, but the biggest problem is access to the internet, which is unreliable and expensive. 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. Colluli is located about 75 kilometres from the Red Sea coast, making it among the most accessible premium potash deposits globally. On July 9, 2018, a joint declaration of peace and friendship was signed between Eritrea and Ethiopia. DANAKALI Ltd., Eritrea - Colluli Potash Project | Aktienforum | Aktien Forum | Diskussionsboard | Community von finanzen.at The resource contains 303Mt @ 11% K2 0 of Measured Resource, 951Mt @ 11% K2 0 of Indicated Resource and 35Mt @ 10% K20 of Inferred Resource. 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. The project has the worlds largest JORC compliant reserve at 1.1 billion tonnes. Masdar City Free Zone, in the United Arab Emirates capital, offers a hassle-free environment in which companies can operate. 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. The Colluli potash project is considered one of the world's most significant and lowest-cost sources of sulphate of potash (SOP), a premium grade fertilizer. 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. as being forecasted back in 2015 has been removed from the supply side (Fig. 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 Perth-basedminer noted that despite covid-19 restrictions, engineering, procurement and construction management (EPCM) activities have continued as scheduled. The country also has 486,200 refugees, including 123,413 living in Sudan, 172,750 in Ethiopia and 18,976 in Egypt. 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. 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. With mineralisation commencing at just 16m, the Colluli resource is the shallowest known evaporite deposit globally and is amenable to open-cut mining. We are confident in RA Internationals capabilities to deliver a high-quality product and service.. 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). It also said that all vendor and contractor packages have now been received. 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. 3. A Front-End Engineering Design (FEED) study confirmed an advanced stage and economically attractive Project. The total measured, indicated and inferred SOP mineral resources at the deposit are estimated to be 1.29 billion tonnes grading 11% K2O. "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. 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. inequalities, climate action, peace, justice and strong institutions and The Company is developing Colluli in partnership with the Eritrean National Mining Corporation (ENAMCO). "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. Additional details about the agreement are available in the following announcement >>. 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. For the area a high-temperature geothermal reservoir was identified in Alid with estimates of a potential heat of 250 to 300 degrees Celsius. The Colluli Potash Project (Project, Colluli ) is 100%. Adjusted net income of $0.52 beat the consensus estimate of $0.43. The company has completed a front-end engineering design for the production of potassium sulphate, otherwise known as sulphate of potash or SOP. AFC also agreed for an additional 39m ($50m) of strategic equity investment in Danakali in December 2019. Colluli, a 50:50 joint venture between Danakali and the Eritrean National Mining Corporation (ENAMCO), has been called a game-changer for Eritreas economy, as it is expected to become one of the worlds most significant and lowest-cost sources of sulphate of potash (SOP), a premium grade fertiliser. 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. 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. At Colluli, the JORC-2012 compliant mineral resource is estimated at 1,289 Mt at 11% K2O for 260 Mt of contained SOP equivalent. % 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. It is actually resistant to the wests oppression in the most pure sense of the term. 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){}} Gensource Potash : Strategic Business Relationship and Project Update, Analysts Are Bullish on Top Materials Stocks: Albemarle (ALB), Nutrien (NTR), DraftKings To Rally Around 38%? It hosts the youngest evaporite deposit and the largest unexploited potash basin in the world. In addition to these benefits our grade control drilling provides us to approach the open cut mine plan with a high degree of selectivity and certainty. 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. We have recently upgraded our technology platform. There is also potential for kieserite and mag chloride to be commercialized with minimal further processing required. US Level 1 ADR . 11). It is estimated to have about 80,000 archaeological sites. The asset has the potential to produce other fertilizer and then onto production in 2022, Danakali said. Reverso Context-: Eritrea has one of the world's most brutal dictatorships, but could a huge potash mine be an economic game changer? 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). 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. Colluli is owned by the Colluli Mining Share Company, a 50:50 joint venture with the Eritrean National Mining Company. Therefore, the Eritrean government has a strong incentive to see the project be built, in production, and run successfully. Best. In 2019, the country received only $67.1m in foreign direct investment (FDI) inflows against $61m in 2018, according to the World Bank. The front-end engineering and design (FEED) study for the project was completed in January 2018. 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. Eritrea was, until 2018, on the UNs sanctions list. So, as a mining jurisdiction, it has got nothing but ticks in all the right boxes.". and mag chloride to be commercialized with minimal further processing required. 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 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. This project has been viewed 588 times. (3) various tools to aid your investment decision making, (4) trade alerts and multiple thematic weekly newsletters and. 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. Potassium bearing minerals are typically found in areas where ancient inland seas have evaporated leaving behind their minerals. Fig. If you continue using our website, we'll assume that you are happy to receive all cookies on this website. 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.