it is promising future.for our country and people .Thank God. "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. 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. We have recently upgraded our technology platform. 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. This post has been syndicated from a third-party source. Required fields are marked *. BHP officials met with Argentinian authorities this week, expressing interest in increasing investments in the San Juan province. 6. Are the rights of those working on the site ensured, or will they be slaves forced to work on the mine as National Service conscripts? Internal industry and services contribute the majority of the remaining GDP, while agriculture accounts for only 13% (despite employing 80% of the population). 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 assesses a wide range of econometric data and includes findings . The FEED economic studies envisage the production of 472 Ktpa in module I for development capital of US$302 million and another 472 Ktpa in module II beginning year 6 for additional investment of US$202 million. 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. Danakali (ASX: DNK) is the 50% owner of the Colluli Potash Project located in Eritrea. Phase one, involving an estimated capital investment of 220m ($298m), is expected to produce 472,000 tonnes per annum (tpa) of high-quality SOP, while in phase two, the mine is expected to produce up to 944,000tpa of SOP from year six of the project with an additional capital investment of 148m ($202m). 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. Potash demand is largely driven by the need to increase crop production and by improved potash application rates, particularly in developing countries such as Asia, Africa, and Latin America, where potash has been historically under-applied relative to scientifically-recommended levels (Fig. 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 Colluli Potash Project is located within the Danakil region of Eritrea, approximately 177km south-east of the capital city Asmara. Sign up HERE today to benefit from Laurentian Research's in-depth research and the TNRH platform right away! The company expects to start full commercial production in mid-December 2022. 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. Why isn't Europe investing more in recycling plastic. In 1993, after a brutal war of independence from Ethiopia lasting almost three decades and led by Isaias Afwerki Eritrea became a sovereign country. education, gender equality, clean water and sanitation, sustainable economic Eritrea has historically struggled to attract large investments because of its unfavourable business climate. A United Nations report published in 2019suggested that Colluli could significantly boost the economy of Eritrea. 1 0 obj Posted by Daniel Gleeson on 21st August 2020. Wall Street Bulls Look Optimistic About Nutrien (NTR): Should You Buy? I am not receiving compensation for it (other than from Seeking Alpha). 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. region, chief executive Niels Wagetold MINING.COM last year. SOP in developing regions where the highest rates of population growth are expected, from. The project has a 200-year lifecycle and is expected to start operating in 2022. 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. As part of the agreement with CMSC, owned 50:50 by Danakali and the Eritrean National Mining Corporation, RA will supply, deliver and install a mine accommodation camp as well as a plant administration and service facilities for the Colluli mine site. Mineral & Phosphate Mining in the US industry outlook (2022-2027) poll Average industry growth 2022-2027: x.x lock Purchase this report or a membership to unlock the average company profit margin for this industry. 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. <> If you continue using our website, we'll assume that you are happy to receive all cookies on this website. In late 2019, the China Shanghai Corporation for Foreign Economic and Technological Cooperation began constructing part of the 500km road connecting Eritreas Massawa and Assab harbours (both have special economic zones). AFC also agreed for an additional 39m ($50m) of strategic equity investment in Danakali in December 2019. Shallowest known evaporite deposit globally. (MOP) and gypsum, along with rock salt. The stock chart of Danakali, modified from this source. I wrote this article myself, and it expresses my own opinions. Danakali Lmited is selling share to China. Danakali is just one of many deep-value natural resources ideas covered by Laurentian Research. Have the local Afar people been displaced and supplies to their communities cut to allow access to the site? 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. 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. Producer of 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 Danakil Depression is located in the Southern region of Eritrea and extends over 300km into Eastern Ethiopia. The miner said it would use the remaining cash about $12 million to identify new projects and potential new alternative growth opportunities.. The plant administration and services facilities will incorporate administration offices, medical clinic, warehouses, and workshops (see graphic above, credit: RA International). Plus500. What are the best countries for cryptocurrency adoption? You are talking about the garbage written by Plaut ? Colluli has been largely de-risked in terms of geopolitics, infrastructure, off-take, and financing, with the module I scheduled to come on-stream in 2022. Fig. The resource contains 303Mt @ 11% K2 0 of Measured Resource, 951Mt @ 11% K2 0 of Indicated Resource and 35Mt @ 10% K20 of Inferred Resource. Danakali to cash out of Colluli. To lower infrastructure uncertainties, in August and October 2020, respectively, Danakali appointed RA International Group PLC as the preferred contractor for the supply of accommodation, support services, and other infrastructure buildings, and Aggreko (AGK.LSE) as its preferred power supply contractor for its 12MW HFO power plant at Colluli under a five-year BOOT contract, removing a major infrastructure uncertainty. According to the article below the mine will require 1,115 workers during the construction phase and 600 thereafter. 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. Potassium is one of three key fertiliser macro-nutrients essential for healthy soil and plant growth. Eritrea has one of the world's most brutal dictatorships, but could a huge potash mine be an economic game changer? 10. Colluli has a JORC-2012 compliant measured, indicated and inferred resource of 1,289 Mt at 11% K20 equivalent and 7% kieserite. Danakali has reported a 1.1 billion ore reserve with a mine life of almost 200 years. Eritrean troops are fighting on the Ethiopian government's side (Eritrea borders Tigray to the north). 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. I'd like to emphasize that the articles contributed by these authors are the product of their respective independent research and analysis. body {top:0 !important;} Click HERE for a free trial now. There was a famous incident where some of the disabled tried to walk into town to complain to him, and they were met by the police and the army who opened fire on them. Niels Wage, CEO of Danakali, said: "We are very pleased to announce the appointment of Aggreko as our single power provider. We are confident in RA Internationals capabilities to deliver a high-quality product and service.. 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. What are my chances of getting my money back? Therefore, the Eritrean government has a strong incentive to see the project be built, in production, and run successfully. I based my assertion of Eritrea being ONE of the most oppressive regimes on a series of reports by human rights advocates such as Human Rights Watch (https://www.hrw.org/world-report/2021/country-chapters/eritrea) as well as sites such as D+C (https://www.dandc.eu/en/article/how-government-eritrea-became-one-worlds-most-repressive-regimes). 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. The deposit stretches across the border into Ethiopia. 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. In food production, potassium is removed from the soil in harvested crops and must be replaced in order to maintain future crop growth. This long-lasting tension has led to Eritrea's militarisation. The company is yet to secure an additional US$52 million of capital. 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). 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,. In November 2021, Eritrea also signed a memorandum of understanding with China to join its Belt and Road Initiative. The front-end engineering and design (FEED) study for the project was completed in January 2018. Eritrea has managed to fall out with and then mend fences with every one of its neighbouring countries. Extraction of the salts in solid form is a crucial positive differentiator of Colluli. Ok as claimed above I dure hope the dictatorship in place will be nice enough this time around to be honest and work for the sake of the people and show the truth about the budgetary issues to the public unlike what the dictatorship did on the gold mining sector.we Eritreans cannot wait to see the benefits of the potash industry on projects that will enhance peoples living standards and create a sustainable economic growth as stipulated on the government sustainable development goals and agendatime only will tell if the dictatorship will have a changing to work for the betterment of the country but not gew clicks. and mag chloride to be commercialized with minimal further processing required. It hosts the youngest evaporite deposit and the largest unexploited potash basin in the world. Morgan Leighton. 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. of Eritrea and Ethiopia, which officially declared peace in July 2018. #google_translate_element2 {display:none!important;} All land is considered state-owned and property rights are non-existent. The border with Sudan was closed until early 2019 because relations were so bad. Sadly, Eritrea looks set to remain a failed state as long as he is in office. The Colluli project is located in the Danakil Depression region of Eritrea, East Africa, about 75 km from the Red Sea coast. Based on what evidence? The location of the Colluli potash deposit, from this source. 5. Colluli boasts a 1.1Bt Ore Reserve and almost 200-year mine life, shallow mineralisation allowing low-cost open-cut mining, simple, proven, low-cost processing, favourable logistics, expansion, diversification and multi-commodity potential. It is estimated that 49% of the population is Christian and a further 49% is Sunni Muslim. The production of other agricultural and salt products, including Rock Salt, Kieserite, Gypsum and Magnesium Chloride, is also possible from the Colluli resource. 6. Shareholders are slated to . could rise to almost 944,000 tonnes if Danakali decides to go ahead with a There are 70 Subscribers monitoring this project. The shortfall of projected and actual global potash capacity, from this source. Soraya Narfeldt, CEO of RA International, said: We are delighted to have been chosen as the preferred contractor to work with Danakali and its partners on this project which we see as globally significant. Fig. Fertiliser is a key component to ensure world food security in the future. If you have an ad-blocker enabled you may be blocked from proceeding. The decline is mainly due to a drop in production expected at Barrick Gold's Somilo/Gounkoto mine and B2Gold's Fekola mine. Prime Minister Abiy Ahmed accused the Tigrayans of attacking a military camp and attempting to loot military assets. 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 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. A port development at Anfile Bay could assist in unlocking this potential. I bought many shares @ 67 Cents per share, total of 240.000.00 Now the share is under 20 Cents. The agreement can be further extended by three years if mutually agreed upon. 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. Potash historical demand trends by region, from this source. 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. Eritrea was, until 2018, on the UNs sanctions list. 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. The extracted ore will be sent to a nearby processing plant where it will undergo crushing, flotation, mixing, and drying for the production of the final SOP product. Danakali Limited is a resource company focused on the Colluli SOP (Sulphate of Potash) Project in Eritrea, East 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. 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. 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 fertilizer. 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. We use them to give you the best experience. Agnico Eagle's EPS beat expectations; guidance maintained. Colluli Potash Project, Eritrea. Disclosure: I am/we are long SBMSF, CMP. 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. The Colluli potash mine is estimated to hold 1.1 billion tonnes of SOP ore reserves grading 10.5% potassium oxide (K2O). The Colluli potash deposit is considered to be one of the worlds shallowest evaporite mineralisation with potash resources found just 16m below the surface. Two articles indicate the rapid progress towards the development of a vast potash mine in the Danakil desert. The cost curve of SOP production as of 2018, from the same source as Fig. 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. Some people have been in national conscription for more than 20 years. Colluli is 75km from the Red Sea coast, providing unrivalled future logistics potential. 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. 9). countries-EritreaReverso Context-: Only four out of now 55 countries-Eritrea, Swaziland, Libya and Somalia-lack a multi-party constitution, and the last two will get one soon. development of the project, and the expected significant boost to royalties, 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 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. 8. Afwerki has become close to Abiy and is a sworn enemy of the Tigray Peoples Liberation Front, which ruled Ethiopia when the two countries fought a border war. 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. Copyright 2023, All Rights Reserved | Alphastox | Proudly Hosted by, Danakali to sell stake in flagship Colluli potash project in Eritrea, Canada Nickel develops new method for accelerated carbon capture, Patriot Battery Metals drills nine holes at Corvette, Metso Outotec expands digital grinding inspections with acquisition of Global Physical, Fatal accident at Ivanhoes Kamoa-Kakula mine in Congo. With a growing world population, demand for food will increase, while the availability of arable land is expected to shrink. The JORC-2012 compliant mineral resource estimate, from this source. As a matter of fact, Zijin Mining (OTCPK:ZIJMF) acquired Nevsun Resources along with its Bisha zinc-copper mine in Eritrea on December 28, 2018. Send Me Updates. The mine will put Eritrea among the top ten potash producers in the world and impact the global supply chain of high-quality fertiliser. In comparison, Tessenderlo (OTCPK:TSDOF) and Compass Minerals (CMP) have a P/FCF multiple of 10.0X and 20.9X, respectively. 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. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Click to follow this blog and receive notifications of new posts by email. Open-cut solid salt mining beats underground solid salt mining, lacustrine brine, and playa brine in operating costs. The project is the only known source of potash that allows extraction of the fertilizer in solid form. The government monitors telephone and internet traffic and runs an extensive domestic surveillance system. 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){}} 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. This article lost credibility in characterizing the country of Eritrea as most oppressive regime. Colluli is owned by the Colluli Mining Share Company, a 50:50 joint venture with the Eritrean National Mining Company. 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. 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. On July 9, 2018, a joint declaration of peace and friendship was signed between Eritrea and Ethiopia. EuroChem is an outstanding partner with global reach and extensive fertiliser capabilities. Colluli is located in the Danakil Depression . 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. Table 1. Danakali (DNK) - Technical Analysis. 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 company has completed a front-end engineering design for the production of potassium sulphate, otherwise known as sulphate of potash or SOP. It also said that all vendor and contractor packages have now been received. Following the agreement, Collulis position as an economically attractive SOP greenfield development project has been reinforced. The Australian company Danakali is developing the Colluli potash project in Eritrea and expects to bring it into production in 2022. 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. Profit was boosted by higher metal grades and prices. Potash products including SOP, MOP, and SOP-M all have the potential to be produced at Colluli. For the area a high-temperature geothermal reservoir was identified in Alid with estimates of a potential heat of 250 to 300 degrees Celsius. All Eritreans are subject to conscription into the military and can be compelled into forced labour that the UN says effectively abuses, exploits and enslaves them for years". The Colluli resource contains kainitite, sylvinite and carnallitite ores. Mobile data does not exist. 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. I have no business relationship with any company whose stock is mentioned in this article. Whilst SOP demand is population growth story it is more of an economic growth story and the African continent is seen to be where the majority of the worlds economic growth will occur in the coming decades. Profit was boosted by higher metal grades and prices. The project is the only known source of potash that allows extraction of the fertilizer in solid form. 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. 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. The Colluli project requires low upfront development costs and is highly scalable for long-life production. The economy expanded by 2.9% in 2021 and is forecast to surge by 4.8% this year, according to the International Monetary Fund. Image courtesy of Danakali. The relative location of the Colluli resource to these critical markets gives it a significant logistics advantage and unrivalled access to the potash markets of the future. 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. 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. 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. Eritrea has a command economy under the control of the sole political party, the People's Front for Democracy and Justice, led by Afwerki. Information about Eritrea and the Horn of Africa. This project has been viewed 588 times. 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. To open fire on your own disabled [people] is pretty appalling.". Finance > M-a. The border lands mostly arable are unusable for farming purposes, because of unexploded land mines left over from the war of independence. partnerships for the SDGs. I think you should research about th e author. Flour was awarded the FEED contract for the Colluli potash project in January 2017. ( source):Danakalihttps://www.danakali.com.au/You can play an important role in investing in a truly once in a lifetime business opportunity. It has a Human Development Index of 0.42, which puts it among the ten least-developed countries on the planet. 2022 The Colluli potash project is a low-cost, long-life sulphate of potash (SOP) project under development in Eritrea, Eastern Africa. It also contains other fertilizer products, such as muriate of potash (MOP) and gypsum, along with rock salt. But when [Afwerki] discovers that his authority is being questioned after independence, he begins reacting in the same way. The asset has the potential to produce other fertilizer The Project has unrivalled potash product versatility. 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. Danakali is set to sell its stake in its flagship Colluli potash project in Eritrea for US$121 million. In turn the well-defined geological features support our ability to maximise the potential from this the multi salt deposit. .goog-te-menu-value:hover {text-decoration:none !important;} 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. Climate Change and its Impact on Insurance Market - Thematic Ukraine PESTLE Insights - A Macroeconomic Outlook Report, Germany PESTLE Insights - A Macroeconomic Outlook Report. Potash, an important fertiliser, could be a game changer for Eritrea and other African countries. These include: No poverty, zero hunger, quality (5) a community of investors to bounce off ideas and share information with. 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.
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