MiningOther CommoditiesIndustrial Minerals, Danakali (50%) and Eritrean National Mining Corporation (ENAMCO, 50%). The project has been largely derisked with regard to geopolitics, infrastructure, off-take, and financing. 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. Danakali Lmited is selling share to China. The mine will put Eritrea among the top ten potash producers in the world and impact the global supply chain of high-quality fertiliser. The 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. In comparison, Tessenderlo (OTCPK:TSDOF) and Compass Minerals (CMP) have a P/FCF multiple of 10.0X and 20.9X, respectively. World Class Potash Project In Eritrea Moves Closer To Development - Forbes This long-lasting tension has led to Eritrea's militarisation. 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. 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. 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. Analysis of the potential contribution of Colluli potash project to sustainable development goals in Eritrea. Eritrea's potash mining takes shape but questions remain 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. (5) a community of investors to bounce off ideas and share information with. Some people have been in national conscription for more than 20 years. The plant administration and services facilities will incorporate administration offices, medical clinic, warehouses, and workshops (see graphic above, credit: RA International). 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 Project has unrivalled potash product versatility. .goog-text-highlight {background-color:transparent !important;box-shadow:none !important;}
Potash is an important fertiliser. Eritrea has managed to fall out with and then mend fences with every one of its neighbouring countries. Image courtesy of Danakali. Eritrea is an ancient civilisation dating back thousands of years and was inhabited by early humans. Eritrea's north-eastern and eastern parts have an extensive coastline along the Red Sea, strategically located along the Maritime Silk Road. 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. 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. The Danakil Depression is an emerging potash province in Eritrea and Ethiopia. In turn the well-defined geological features support our ability to maximise the potential from this the multi salt deposit. 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. partnerships for the SDGs.
<>
(as referred to in ASX announcements of 3 October 2022, 1 December 2022, and 12 January 2023), it . The deposit contains mainly three types of potassium bearing salts including sylvinite, carnallitite, and kainitite. The project has a 200-year lifecycle and is expected to start operating in 2022. The Colluli project is a 5050 joint venture between South Boulder Mines and the government-owned Eritrean National Mining Corporation. There are 70 Subscribers monitoring this project. Adjusted net income of $0.52 beat the consensus estimate of $0.43. At a forward P/FCF multiple of 2.6X for Module I (2022-) and 1.3X once Module II comes on-stream in 2028, Danakali appears to be undervalued. Danakali closer to getting Eritrea potash project off the ground The production of other agricultural and salt products, including Rock Salt, Kieserite, Gypsum and Magnesium Chloride, is also possible from the Colluli resource. We have recently upgraded our technology platform. Colluli Potash Project is a 50:50 Joint Venture between Danakali Limited and the Eritrean National Mining Company (ENAMCO). Earth Moving Worldwide (EMW) was selected to provide mining services for the Colluli potash project in December 2019. Danakali to sell stake in flagship Colluli potash project in Eritrea Danakali (DNK) - Technical Analysis - Crux Investor The UN says forced labour and detention without trial are common. What are my chances of getting my money back? A big economic change will come to eritrea, proud to be an nseritrea. Colluli is located in the Danakil Depression region of Eritrea and is approximately 230km by road south-east of the port of Massawa, which is Eritreas key import/export facility. Danakali has a 50% interest in a JV with the Eritrean National Mining Corporation (or ENAMCO), which operates the Colluli project. Many Eritreans hoped that the peace deal with Ethiopia would create economic opportunities for the country, but there is little sign of that happening yet. function GTranslateGetCurrentLang() {var keyValue = document['cookie'].match('(^|;) ?googtrans=([^;]*)(;|$)');return keyValue ? keyValue[2].split('/')[2] : null;}
Fig. Wall Street Bulls Look Optimistic About Nutrien (NTR): Should You Buy? Value: R 200 Million+. The Colluli deposit comprises a massive JORC-2012 compliant Ore Reserve estimate of 1,100Mt @ 10.5% K2O for 203Mt of contained SOP equivalent, providing a mine life of almost 200 years. In August 2019, Danakali announced Africa Finance Corporation and African Export-Import Bank (Afreximbank) have obtained formal credit approval to provide US$200 million in senior debt finance, as part of the overall project funding package used for the construction of Colluli, with the documentation finalized on December 23, 2019. 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. 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. Economic resources for Sulphate of Potash (SOP) production are scarce, and Colluli is favourably positioned to supply the worlds fastest-growing SOP markets. Colluli is the premier greenfield development project globally. We need a bit of money.' The country also boasts impressive marine tourist sites, a wide range of flora and fauna, and scenic terrain. This geographical advantaged is unique. Fig. ,and the value is around 67,000.00 . Information about Eritrea and the Horn of Africa. 4. Danakali eyes finish line for Eritrea potash project 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% . 03 October 2022. 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. In June 2018, Danakali reached a binding take-or-pay offtake agreement with EuroChem Trading GmbH (EuroChem). 5. Shallowest known evaporite deposit globally. 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. Danakali to use filtered sea water at Colluli potash mine 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/). 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. 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. A United Nations reportpublished last yearsuggested that Colluli could significantly boost Eritreas economy. Members of The Natural Resources Hub get exclusive ideas and guidance to navigate any climate. 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. 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. My References:Danakali Ltd:https://www.danakali.com.au/ Interested in supporting this channel: Paypal: PayPal . Plus500. The government monitors telephone and internet traffic and runs an extensive domestic surveillance system. It hosts the youngest evaporite deposit and the largest unexploited potash basin in the world. 3). Open-cut solid salt mining beats underground solid salt mining, lacustrine brine, and playa brine in operating costs. 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). To open fire on your own disabled [people] is pretty appalling.". 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. On July 9, 2018, a joint declaration of peace and friendship was signed between Eritrea and Ethiopia. The construction works for the Colluli potash mine are expected to be started in 2021 with the start of production expected in 2022. 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. Internal industry and services contribute the majority of the remaining GDP, while agriculture accounts for only 13% (despite employing 80% of the population). Colluli Potash Project Aspires to 'Meaningfully' Advance Eritrea's The border lands mostly arable are unusable for farming purposes, because of unexploded land mines left over from the war of independence. Below, let's look at Danakali Ltd. (DNK.ASX) (OTCPK:SBMSF) (OTCPK:DNKLY), which operates in Eritrea. However, the country is home to one of the world's biggest potash deposits which straddles the border with Ethiopia. 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. At a SOP price of US$650/tonne, annual production would generate revenue equivalent to . 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. A United Nations report published in 2019 suggested that Colluli could significantly boost the economy of Eritrea. A United Nations report published in 2019suggested that Colluli could significantly boost the economy of Eritrea. Colluli Potash Project - MBS Environmental Fig. Niels Wage, CEO of Danakali, said: "We are very pleased to announce the appointment of Aggreko as our single power provider. Table 1. World potash demand has grown at an average rate of 2.5-3.0% per year since 2000 (Fig. 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.. Pilot tests from the Colluli salts have generated product samples for marketing purposes which are now being distributed to prospective customers. US Level 1 ADR's OTC-DNKLY, CUSIP.23585T101 The world's largest JORC compliant solid salt, Sulphate of . Danakali explored the use of filtered seawater at Colluli. Colluli - Danakali Limited 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. 11. Fig. I am not receiving compensation for it (other than from Seeking Alpha). It is estimated to have about 80,000 archaeological sites. As a tier-1 potash deposit with a number of unique advantages to its favor, the fully-permitted Colluli carries little underground geological risk. second phase of development, as the project has a possible 200-year plus endobj
Surface mining allows controlled extraction, predictable production rates and efficient stockpiling of additional economic salts know to us. The Australian company Danakali is developing the Colluli potash project in Eritrea and expects to bring it into production in 2022. 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). 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 FEED economic estimates, from the same source as Fig. %
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. Status: Design. It also has access to solar, wind and geothermal energy systems the East African rift. stream
The Colluli Potash Project is located within the Danakil region of Eritrea, approximately 177km south-east of the capital city Asmara. development of the project, and the expected significant boost to royalties, 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. 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. Danakali to sell stake in flagship Colluli potash project in Eritrea The Colluli resource contains kainitite, sylvinite and carnallitite ores. "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. MoEM has shown support for the financing of the project by granting time to begin commercial production (up to mid-December 2022) as well as . Colluli is located in the Danakil Depression . Colluli Potash Mine, Danakali Depression, Eritrea, Eastern Africa 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. Mining in Eritrea: could a new potash project spur sustainable growth? RA International to set up camp at Colluli sulphate of potash mine Please disable your ad-blocker and refresh.
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. endobj
In 2023, Botswana expects diamond output to decline by 1%.
Danakali is developing the tier-1 Colluli potash project, Eritrea, which boasts the world's lowest costs and >200 years of mine life. 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. The Colluli potash project is expected to commence production in 2022. Eritrea has a command economy under the control of the sole political party, the People's Front for Democracy and Justice, led by Afwerki. 4. Disclosure: I am/we are long SBMSF, CMP. It also provides off-takers with additional confidence on Project certainty and fundability, supporting the finalisation of binding bankable offtake agreements. In 2019, the country received only $67.1m in foreign direct investment (FDI) inflows against $61m in 2018, according to the World Bank. Last Updated on: 01 December 2022. 4. 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 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. Jason Mitchell is a senior editor at Investment Monitor, with a specialisation in emerging markets. Required fields are marked *. Abu Dhabi has established a growing reputation as a source of innovation due to forward-thinking projects across sectors including energy, infrastructure, sport, culture and tourism. PDF owned by For personal use only In food production, potassium is removed from the soil in harvested crops and must be replaced in order to maintain future crop growth. After all considerations and government taxes, Danakali said it expects to receive approximately $121m. Gensource Potash : Strategic Business Relationship and Project Update, Analysts Are Bullish on Top Materials Stocks: Albemarle (ALB), Nutrien (NTR), DraftKings To Rally Around 38%? 6. Italy created the colony of Eritrea in the 19th century around Asmara and gave it its current name. This project has been viewed 588 times. 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. growth and decent work, industry, innovation and infrastructure, reduced
Enter your email below to receive updates on your featured companies right to your inbox. 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. <>/Metadata 306 0 R/ViewerPreferences 307 0 R>>
3). 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. Eritrea has one of the world's most brutal dictatorships, but could a huge potash mine be an economic game changer? 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. The project has the worlds largest JORC compliant reserve at 1.1 billion tonnes. Business intelligence for leaders in foreign direct investment. could rise to almost 944,000 tonnes if Danakali decides to go ahead with a Since then, potash price has fallen from the neighborhood of US$600/t MOP to as low as USS$200/t MOP by 2017, and has since been fluctuating between US$200/t and US$270/t. 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. 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 front-end engineering and design (FEED) study for the project was completed in January 2018. The miner said it would use the remaining cash about $12 million to identify new projects and potential new alternative growth opportunities.. What Are the Best Fertilizer Stocks? Construction nears at Colluli potash project following Eritrea ministry the countrys GDP by 2021 and 50% of the nations exports by 2030, while They are in deep need. The deposit is the only one in the world world where SOP can be made from an open-cut mine due to its extreme shallowness. 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 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. The project will be developed in multi-modules, with Module I serving as a platform for future growth. (2) live portfolios for both capital appreciation and income generation. The company expects to start full commercial production in mid-December 2022. Reverso Context-: Flour was awarded the FEED contract for the Colluli potash project in January 2017. 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. - - | Reverso Context 10. and then onto production in 2022, Danakali said. as being forecasted back in 2015 has been removed from the supply side (Fig. The Colluli project requires low upfront development costs and is highly scalable for long-life production. Colluli has a JORC-2012 compliant measured, indicated and inferred resource of 1,289 Mt at 11% K20 equivalent and 7% kieserite. I'd like to emphasize that the articles contributed by these authors are the product of their respective independent research and analysis. 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 benefits of this means we generate cash flow much earlier and more predictably relative to solution mining or brine operations. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Eritreas north-eastern and eastern parts have an extensive coastline along the Red Sea, strategically located along the Maritime Silk Road. A port development at Anfile Bay could assist in unlocking this potential. 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. function doGTranslate(lang_pair){if(lang_pair.value)lang_pair=lang_pair.value;if(lang_pair=='')return;var lang=lang_pair.split('|')[1];if(GTranslateGetCurrentLang() == null && lang == lang_pair.split('|')[0])return;var teCombo;var sel=document.getElementsByTagName('select');for(var i=0;i