2 0 obj It has industry-leading capital intensity, forecast first quartile operating costs, and highly attractive economic returns. A number of unique characteristics make Colluli one of the world's largest and lowest-cost deposits of SOP. Image courtesy of Danakali. 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. 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. Analysis of the potential contribution of Colluli potash project to sustainable development goals in Eritrea. 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. The project is on the Eritrean side of the border, giving Colluli a significant advantage relative to the other potash development projects in the Danakil Depression, which need to ship from the Tadjoura Port in Djibouti over 790km by road from the closest project on the Ethiopian side of the border. Required fields are marked *. Pilot tests from the Colluli salts have generated product samples for marketing purposes which are now being distributed to prospective customers. The above advantageous features combine to make Colluli the lowest-cost SOP producer outside of China (Fig. 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. 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continued new business momentum with another significant award in the mining sector., Your email address will not be published. Climate Change and its Impact on Insurance Market - Thematic Ukraine PESTLE Insights - A Macroeconomic Outlook Report, Germany PESTLE Insights - A Macroeconomic Outlook Report. 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. It has been a Unesco World Heritage Site since 2017. The Colluli resource contains kainitite, sylvinite and carnallitite ores. So, as a mining jurisdiction, it has got nothing but ticks in all the right boxes.". In turn the well-defined geological features support our ability to maximise the potential from this the multi salt deposit. All land is considered state-owned and property rights are non-existent. Its constitution has not been implemented, the parliament has been prorogued for many years, the ruling party has not held a congress for a number of years and independent media is banned. The stock chart of Danakali, modified from this source. Colluli Potash Project is a 50:50 Joint Venture between Danakali Limited and the Eritrean National Mining Company (ENAMCO). It has a geographic area of 117,600km2, making it slightly larger than Bulgaria. 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. and mag chloride to be commercialized with minimal further processing required. Fig. 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). 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 Project (Project, Colluli) is 100% owned by Colluli Mining Share Company (CMSC,) a 50:50 Joint Venture between Danakali Limited (DNK) and Eritrean National Mining rporation (ENAMCO) Codes: ASX: DNK, SO3-FRA, SO3-BER. Morgan Leighton. Colluli is 75km from the Red Sea coast, providing unrivalled future logistics potential. Unlike other potash producing basins of the world, the Danakil region contains a variety of potassium-bearing salts, enabling the opportunity to generate a range of potash fertilizers. Eritrean troops are fighting on the Ethiopian government's side (Eritrea borders Tigray to the north). 86% of retail CFD accounts lose money. Is this happening to you frequently? Both are below. 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. 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 deposit stretches across the border into Ethiopia. Reminders. advance its sustainable development agenda, which are 13 priority Sustainable The United Nations Development Programme (UNDP) has indicated Colluli has the potential to significantly boost the Eritrean economy and have a substantial positive impact on the Sustainable Development Agenda of Eritrea. The 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. Colluli is a major sulphate of potash (SOP) project located in Eritrea, Eastern Africa. 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. Fig. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address. The decline is mainly due to a drop in production expected at Barrick Gold's Somilo/Gounkoto mine and B2Gold's Fekola mine. Extraction of the salts in solid form is a crucial positive differentiator of Colluli. The project has the world's. Profit was boosted by higher metal grades and prices. 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. Artists impression of the plant at the Colluli project. Danakali has a 50% interest in a JV with the Eritrean National Mining Corporation (or ENAMCO), which operates the Colluli project. 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>. 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. 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. Finance > M-a. Danakali explored the use of filtered seawater at Colluli. According to the article below the mine will require 1,115 workers during the construction phase and 600 thereafter. 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. Colluli will be a simple open-cut mining operation utilising truck and shovel methods complemented by continuous surface miners. 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. Status: Design. SOP in developing regions where the highest rates of population growth are expected, from. It describes Eritrea as "a dictatorship in which the media has no rights". 5). Notify me of follow-up comments by email. Eritrea has huge tourism potential, but it is hard for foreign visitors to obtain a visa. The best energy and mining stock ideas with multibagger potential. The Colluli Potash Project (Project, Colluli ) is 100%. 10). Annual output My References:Danakali Ltd:https://www.danakali.com.au/ Interested in supporting this channel: Paypal: PayPal . Looking for a helping hand in the market? I think you should research about th e author. .goog-te-banner-frame {display:none !important;} 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. 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). Some 7 Mt of potash capacity as being forecasted back in 2015 has been removed from the supply side (Fig. The front-end engineering design (FEED), expected to be 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. Potassium bearing minerals are typically found in areas where ancient inland seas have evaporated leaving behind their minerals. 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. 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). After the Second World War, it was annexed to Ethiopia. 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. Over 6Bt of potassium bearing salts suitable for the production of potash fertilisers have been identified in the region to date. The potassium salt composition in the resource provides the option to diversify the potash product suite as the Project grows. 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. #google_translate_element2 {display:none!important;} The independent study, commissioned and funded by the UN Development Program (UNDP), assesses a wide range of econometric data and includes . Danakali (DNK) - Technical Analysis. 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. They have significant experience in executing projects of the scale and quality required for the Colluli project. Prime Minister Abiy Ahmed accused the Tigrayans of attacking a military camp and attempting to loot military assets. These alternative producers require substantial lead times to generate their harvest salts for processing. of Eritrea and Ethiopia, which officially declared peace in July 2018. Earth Moving Worldwide (EMW) was selected to provide mining services for the Colluli potash project in December 2019. I bought many shares @ 67 Cents per share, total of 240.000.00 Now the share is under 20 Cents. 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. What are my chances of getting my money back? 8. 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. Previously, in London, he was editor of Investment Adviser and news editor of Financial Adviser, both of which belong to the Financial Times Group, Namibian Investment Promotion and Development Board, Dubais new family office rules can drive economic growth for the UAE, Opinion: New Brexit deal can only be a good thing for Northern Ireland, African FDI into mines on the rise as continent steps up its role in energy transition, How proptech is driving sustainability: Lessons from Stockholm, How Montrals unique agtech community is boosting local food production, EU to launch quest for raw materials critical for cleantech, Finding a cure: How cell and gene therapies could revolutionise medicine, China Shanghai Corporation for Foreign Economic and Technological Cooperation, Norway PESTLE Insights - A Macroeconomic Outlook Report, PESTLE Insights: Macroeconomic Outlook Report - Norway. 03 October 2022. 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. the countrys GDP by 2021 and 50% of the nations exports by 2030, while Surface mining allows controlled extraction, predictable production rates and efficient stockpiling of additional economic salts know to us. I am not receiving compensation for it (other than from Seeking Alpha). Italy created the colony of Eritrea in the 19th century around Asmara and gave it its current name. The Colluli potash mine is estimated to hold 1.1 billion tonnes of SOP ore reserves grading 10.5% potassium oxide (K2O). Colluli is located about 75 kilometres from the Red Sea coast, making it among the most accessible premium potash deposits globally. 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. There is also potential for kieserite and mag chloride to be commercialized with minimal further processing required. The resource contains 303Mt @ 11% K2 0 of Measured Resource, 951Mt @ 11% K2 0 of Indicated Resource and 35Mt @ 10% K20 of Inferred Resource. mine-life. Potash is the common term for fertiliser forms of the element potassium (K). Information about Eritrea and the Horn of Africa. If you have an ad-blocker enabled you may be blocked from proceeding. It has a Human Development Index of 0.42, which puts it among the ten least-developed countries on the planet. 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 Report was undertaken during 2018 by senior economists on behalf of the UNDP. Adjusted net income of $0.52 beat the consensus estimate of $0.43. function googleTranslateElementInit2() {new google.translate.TranslateElement({pageLanguage: 'en',autoDisplay: false}, 'google_translate_element2');} Niels Wage, CEO of Danakali, said: "We are very pleased to announce the appointment of Aggreko as our single power provider. 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. Colluli has significant multi-commodity potential presenting major additional value upside. 4. The development of the Colluli potash projects coincides Colluli has a JORC-2012 compliant measured, indicated and inferred resource of 1,289 Mt at 11% K20 equivalent and 7% kieserite. 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). Sylvinite and carnallitite both produce potassium chloride, which is then combined with decomposed kainitite to form high purity potassium sulphate. 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. As a tier-1 potash deposit with a number of unique advantages to its favor, the fully-permitted Colluli carries little underground geological risk. One-third of the country's GDP is made up of remittances sent home by Eritreans living in Europe and other developed countries. The project will be developed in multi-modules, with Module I serving as a platform for future growth. The company has completed a front-end engineering design for the production of potassium sulphate, otherwise known as sulphate of potash or SOP. and then onto production in 2022, Danakali said. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Click to follow this blog and receive notifications of new posts by email. However, China has set its sights on the country and perhaps it will receive large amounts of Chinese FDI in the future. There are many sources of potassium, including. Danakali is just one of many deep-value natural resources ideas covered by Laurentian Research. The Danakil Depression is an emerging potash province in Eritrea and Ethiopia. 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. (as referred to in ASX announcements of 3 October 2022, 1 December 2022, and 12 January 2023), it . If you continue using our website, we'll assume that you are happy to receive all cookies on this website. 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. 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. 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 . 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. What are the best countries for cryptocurrency adoption? ( source):Danakalihttps://www.danakali.com.au/You can play an important role in investing in a truly once in a lifetime business opportunity. 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. Gensource Potash : Strategic Business Relationship and Project Update, Analysts Are Bullish on Top Materials Stocks: Albemarle (ALB), Nutrien (NTR), DraftKings To Rally Around 38%? 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. Please disable your ad-blocker and refresh. 2). 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. On September 11, 2018, the Eritrea-Ethiopia border re-opened for the first time since 1998. Colluli is without peer on capital intensity and production capacity with the ability to expand rapidly. Fertiliser is a key component to ensure world food security in the future. 3. The mine will put Eritrea among the top ten potash producers in the world and impact the global supply chain of high-quality fertiliser. Additionally, it will provide comprehensive camp services incorporating catering, cleaning, laundry, pest and vector control, grounds keeping and waste management. 11. The project has the worlds largest JORC compliant reserve at 1.1 billion tonnes. After all considerations and government taxes, Danakali said it expects to receive approximately $121m. The country also has 486,200 refugees, including 123,413 living in Sudan, 172,750 in Ethiopia and 18,976 in Egypt. 6. A Front-End Engineering Design (FEED) study confirmed an advanced stage and economically attractive Project. development of the project, and the expected significant boost to royalties, 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 saleable SOP product will be trucked via road for sipping to the Massawa port which is located approximately 230km north-west of the project site. 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. 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. 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. endobj World potash demand has grown at an average rate of 2.5-3.0% per year since 2000 (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. Fertilizer potash is needed in the sustainable production of grains, oilseeds, fruits, and vegetables. I have taken a starter position and plan to build a position of meaningful size in the next couple of years. The Colluli project is located in the Danakil Depression region of Eritrea, East Africa, about 75 km from the Red Sea coast. It also said that all vendor and contractor packages have now been received. <> 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. The construction works for the Colluli potash mine are expected to be started in 2021 with the start of production expected in 2022. 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 Colluli project requires low upfront development costs and is highly scalable for long-life production. A United Nations reportpublished last yearsuggested that Colluli could significantly boost Eritreas economy. endobj Potassium is one of three key fertiliser macro-nutrients essential for healthy soil and plant growth. "There is a supportive business environment because mining there is a very strategic industry. 3). 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. 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. Only 1% of the population has access to the internet, according to the World Bank. 6. endobj 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 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. ,and the value is around 67,000.00 . The miner said it would use the remaining cash about $12 million to identify new projects and potential new alternative growth opportunities.. 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. A port development at Anfile Bay could assist in unlocking this potential. Demand for fertiliser is driven by population and economic growth which directly translates to food demand. The shortfall of projected and actual global potash capacity, from this source. Potash supply has historically been controlled by production cartels, such as a German export monopoly in the early 1900s, the agreement strategies between German and French producers until 1939, and then oligopolistic competition prevailing on world markets (see here). The JORC-2012 compliant mineral resource estimate, from this source. Eritreas north-eastern and eastern parts have an extensive coastline along the Red Sea, strategically located along the Maritime Silk Road. BHP officials met with Argentinian authorities this week, expressing interest in increasing investments in the San Juan province. 2023 Glacier Media Group, All Rights Reserved, Botswana mining growth seen flat amid dim diamond outlook, Harmony Gold CEO says gold sector consolidation inevitable, Quest for worlds biggest diamonds gives De Beers a headache, Mali forecasts 3.5% decline in industrial gold output in 2023, Canada injects $75 million into BHPs Jansen potash mine, Russia raises fertilizer export quota by 500,000 tonnes, World to face potash price crunchas Brazil Potash propels Autazes project toward production, Europes largest rare earths deposit found in Sweden. Sadly, Eritrea looks set to remain a failed state as long as he is in office. For the area a high-temperature geothermal reservoir was identified in Alid with estimates of a potential heat of 250 to 300 degrees Celsius. Colluli is positioned very close to vital potash markets. 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. Over the next three decades, almost 95% of the population growth will occur in Africa, India, and South-East Asia. 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 Only 12% of the total land area is suitable for farming in part due to the countrys rocky and mountainous terrain but also due to a persistent drought that afflicts much of the remaining countryside. 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.
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