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

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. 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. In some cases, depending on the ambient conditions, this process can take over two years. The appointment of RA International is testament to sound execution of our growth strategy, highlighting continued new business momentum with another significant award in the mining sector., Your email address will not be published. It also has access to solar, wind and geothermal energy systems - the East African rift. Prime Minister Abiy Ahmed accused the Tigrayans of attacking a military camp and attempting to loot military assets. Standard, granular and soluble products can be produced for distribution to the market. and mag chloride to be commercialized with minimal further processing required. Sign up HERE today to benefit from Laurentian Research's in-depth research and the TNRH platform right away! The report also identified how the mine could help Eritrea 6. Members of The Natural Resources Hub get exclusive ideas and guidance to navigate any climate. with the move towards diplomatic relations between the once feuding countries 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. Required fields are marked *. Danakali Limited is a resource company focused on the Colluli SOP (Sulphate of Potash) Project in Eritrea, East Africa. 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. Fig. The Perth-basedminer noted that despite covid-19 restrictions, engineering, procurement and construction management (EPCM) activities have continued as scheduled. 1 0 obj February 25, 2022. Potash is an important fertiliser. 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. education, gender equality, clean water and sanitation, sustainable economic 03 October 2022. 3). 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. A comparison of the Colluli and competing greenfield SOP development projects in terms of the distance to the export port, from the same source as Fig. Eritrea was, until 2018, on the UNs sanctions list. On September 11, 2018, the Eritrea-Ethiopia border re-opened for the first time since 1998. Some 7 Mt of potash capacity as being forecasted back in 2015 has been removed from the supply side (Fig. Colluli is located in the Danakil Depression . Fertilizer potash is needed in the sustainable production of grains, oilseeds, fruits, and vegetables. As the commodity supercycle unfolds, you are invited to join The Natural Resources Hub today to take advantage of a slew of generational opportunities alongside Laurentian Research. Colluli is positioned very close to vital potash markets. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). Additionally, it will provide comprehensive camp services incorporating catering, cleaning, laundry, pest and vector control, grounds keeping and waste management. There is also potential for kieserite and mag chloride to be commercialized with minimal further processing required. 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. Colluli is 75km from the Red Sea coast, providing unrivalled future logistics potential. 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. Following the agreement, Collulis position as an economically attractive SOP greenfield development project has been reinforced. Anyone can write a book, as long as is a white person, you would buy it even a white homeless from NYC. Both are below. 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. 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. Select LanguageChinese (Simplified)EnglishGerman 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, It has a Human Development Index of 0.42, which puts it among the ten least-developed countries on the planet. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address. 4. Table 1. The production of other agricultural and salt products, including Rock Salt, Kieserite, Gypsum and Magnesium Chloride, is also possible from the Colluli resource. Eritrea has one of the most erratic economies in the world, partly due to chronic drought and highly variable agricultural output: its GDP surged by 31% in 2014 before plummeting by -20.6% in 2015. Fig. 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. It is estimated to have about 80,000 archaeological sites. Under the terms of the agreement, EuroChem will take, pay, market, and distribute up to 100% of the module I SOP production over a 10+3 year term from the project commissioning. The front-end engineering and design (FEED) study for the project was completed in January 2018. 1. 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. It also has access to solar, wind and geothermal energy systems the East African rift. The FEED economic estimates, from the same source as Fig. 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. 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. 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. The project has been largely derisked with regard to geopolitics, infrastructure, off-take, and financing. They are in deep need. The company is yet to secure an additional US$52 million of capital. After all considerations and government taxes, Danakali said it expects to receive approximately $121m. It also has access to solar, wind and geothermal energy systems the East African rift. It has had a border war with Ethiopia and a clash along the border with Djibouti. Danakali is set to sell its stake in its flagship Colluli potash project in Eritrea for US$121 million. We use them to give you the best experience. It has been a Unesco World Heritage Site since 2017. In the initial phase of operation, Wage said, Colluli would There is also potential for kieserite and mag chloride to be commercialized with minimal further processing required. 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. Despite funding setbacks last year, Danakali says that Colluli, a 50:50 joint venture between Danakali and the Eritrean National Mining Corporation (ENAMCO), is on track for production in 2022. 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. (5) a community of investors to bounce off ideas and share information with. Colluli Potash Project, Eritrea. Colluli has a JORC-2012 compliant measured, indicated and inferred resource of 1,289 Mt at 11% K20 equivalent and 7% kieserite. Front End Engineering Design (FEED) strongly confirms Colluli as one of the worlds most economically attractive, and fundable SOP greenfield development project. 10). 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. Best. Agnico Eagle's EPS beat expectations; guidance maintained. 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. 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. According to Reporters Without Borders, only North Korea has less press freedom. These alternative producers require substantial lead times to generate their harvest salts for processing. Eritrea has historically struggled to attract large investments because of its unfavourable business climate. 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. Have the local Afar people been displaced and supplies to their communities cut to allow access to the site? The Report was undertaken during 2018 by senior economists on behalf of the UNDP. 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. The resource contains 303Mt @ 11% K2 0 of Measured Resource, 951Mt @ 11% K2 0 of Indicated Resource and 35Mt @ 10% K20 of Inferred Resource. At Colluli, the JORC-2012 compliant mineral resource is estimated at 1,289 Mt at 11% K2O for 260 Mt of contained SOP equivalent. These include: No poverty, zero hunger, quality Value: R 200 Million+. 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. We are confident in RA Internationals capabilities to deliver a high-quality product and service.. The Colluli potash mine is estimated to hold 1.1 billion tonnes of SOP ore reserves grading 10.5% potassium oxide (K2O). 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. It describes Eritrea as "a dictatorship in which the media has no rights". 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. Potassium is one of three key fertiliser macro-nutrients essential for healthy soil and plant growth. Australia's Danakali (ASX, LON:DNK) is closer than ever to beginning the development of its world-class Colluli potash project in Eritrea, which is expected to become one of the world's. BHP officials met with Argentinian authorities this week, expressing interest in increasing investments in the San Juan province. All land is considered state-owned and property rights are non-existent. 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. endobj 6. 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. 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. 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. 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. 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 company expects to start full commercial production in mid-December 2022. What are the best countries for cryptocurrency adoption? 9. Information about Eritrea and the Horn of Africa. The Eritrean government, through ENAMCO, has a 50% interest in the Colluli project. 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. <>/ExtGState<>/Font<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/MediaBox[ 0 0 594.96 842.04] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>> These authors includeSilver Coast Research, , among others. SOP - a premium grade fertilizer - usually grabs a higher price at US$500-650/t (see here). 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 . The Colluli process is expected to generate a product with a purity of 94.5%. Image courtesy of Danakali. Colluli will be a simple open-cut mining operation utilising truck and shovel methods complemented by continuous surface miners. Eritreas north-eastern and eastern parts have an extensive coastline along the Red Sea, strategically located along the Maritime Silk Road. Fig. 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. RA, listed . 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). There are many sources of potassium, including. 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. A United Nations report published in 2019suggested that Colluli could significantly boost the economy of Eritrea. Notify me of follow-up comments by email. 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. The miner said it would use the remaining cash about $12 million to identify new projects and potential new alternative growth opportunities.. The underapplication of SOP in developing regions where the highest rates of population growth are expected, from this source. In June 2018, Danakali reached a binding take-or-pay offtake agreement with EuroChem Trading GmbH (EuroChem). Danakali (DNK) - Technical Analysis. Producer of Fig. The agreement encourages the maximisation of netback pricing of SOP produced in the Colluli, which will become the first Africa-based fertiliser provider in the supply chain of EuroChem. It has a geographic area of 117,600km2, making it slightly larger than Bulgaria. Adjusted net income of $0.52 beat the consensus estimate of $0.43. One-third of the country's GDP is made up of remittances sent home by Eritreans living in Europe and other developed countries. %PDF-1.7 It also has access to solar, wind and geothermal energy systems the East African rift. "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. 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){}} Colluli is without peer on capital intensity and production capacity with the ability to expand rapidly. AFC also agreed for an additional 39m ($50m) of strategic equity investment in Danakali in December 2019. There are 70 Subscribers monitoring this project. 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. The best energy and mining stock ideas with multibagger potential. endobj Asmara is a beautiful city and awash in colonial Italian architectural gems. By. The asset has the potential to produce other fertilizer Danakali Lmited is selling share to China. 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. Colluli Potash Project is a 50:50 Joint Venture between Danakali Limited and the Eritrean National Mining Company (ENAMCO). 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. 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". Fig. The government will benefit from the longer-term "There is a supportive business environment because mining there is a very strategic industry. Colluli, owned 50:50 by Danakali and the Eritrean National Mining Corporation, has a JORC-2012 compliant measured, indicated and inferred resource of 1,289 Mt at 11% K20 equivalent and 7% kieserite. Invest in t. (2) live portfolios for both capital appreciation and income generation. 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. 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 Depression is located in the Southern region of Eritrea and extends over 300km into Eastern Ethiopia. Open-cut solid salt mining beats underground solid salt mining, lacustrine brine, and playa brine in operating costs. 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. Colluli has significant multi-commodity potential presenting major additional value upside. It thus follows we should keep an eye on emerging potash producers. Sadly, Eritrea looks set to remain a failed state as long as he is in office. 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. Jason Mitchell is a senior editor at Investment Monitor, with a specialisation in emerging markets. Your email address will not be published. The miner said it would use the remaining cash about $12 million to identify new projects and potential new alternative growth opportunities.. "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. 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.