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). 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. 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. 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. Here Are 10 Other Analyst Forecasts For Tuesday, Berenberg Bank Sticks to Their Buy Rating for Nutrien (NTR), Registration on or use of this site constitutes acceptance of our. Anyone can write a book, as long as is a white person, you would buy it even a white homeless from NYC. / Danakali: Colluli Potash Mining Project Eritrea stream RA International to set up camp at Colluli sulphate of potash mine The Colluli project requires low upfront development costs and is highly scalable for long-life production. World potash demand has grown at an average rate of 2.5-3.0% per year since 2000 (Fig. The project is the only known source of potash that allows extraction of the fertilizer in solid form. Colluli is only 75km from the Red Sea coast, 87km from a port planned at the Anfile Bay, and 230km from the existing Port of Massawa, making it the SOP deposit closest to a coastline and giving it an advantage over competing projects in neighboring Ethiopia, such as the Yara Dallol project of Yara International ASA (. and mag chloride to be commercialized with minimal further processing required. 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. Surface mining allows controlled extraction, predictable production rates and efficient stockpiling of additional economic salts know to us. After all considerations and government taxes, Danakali said it expects to receive approximately $121m. A port development at Anfile Bay could assist in unlocking this potential. SOP - a premium grade fertilizer - usually grabs a higher price at US$500-650/t (see here). 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. Colluli Potash Project - MBS Environmental What are my chances of getting my money back? The government monitors telephone and internet traffic and runs an extensive domestic surveillance system. endobj 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. 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 Eritrea's key import/export facility. "We have found Eritrea to be very transparent and consistent across the board," Seamus Cornelius, Danakali's executive chairman, said in an interview. Eritrea was, until 2018, on the UNs sanctions list. The Colluli project is located in the Danakil Depression region of Eritrea, East Africa, and is ~75km from the Red Sea coast, making it one of the most accessible potash deposits globally. 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. 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. 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. It also contains other fertilizer products, such as muriate of potash (MOP) and gypsum, along with rock salt.There is also potential for kieserite and mag chloride to be commercialized with minimal further processing required.A United Nations report published in 2019suggested that Colluli could significantly boost the economy of Eritrea.The project is the only known source of potash that allows extraction of the fertilizer in solid form. seriously, this Man is a lobbyist of TPLF A group designated as a Terrorist Organisation in Ethiopia. providing 10,000 direct and indirect local jobs. 3 0 obj 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. 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. It describes Eritrea as "a dictatorship in which the media has no rights". Asmara is a beautiful city and awash in colonial Italian architectural gems. With a growing world population, demand for food will increase, while the availability of arable land is expected to shrink. The decline is mainly due to a drop in production expected at Barrick Gold's Somilo/Gounkoto mine and B2Gold's Fekola 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. ( source):Danakalihttps://www.danakali.com.au/You can play an important role in investing in a truly once in a lifetime business opportunity. 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. Reverso Context-: Danakali appoints Aggreko as power contractor at Colluli Materials handling trials have also been completed to determine the anti-caking requirements for the final SOP product. DANAKALI Ltd., Eritrea - Colluli Potash Project | Aktienforum | Aktien Forum | Diskussionsboard | Community von finanzen.net The construction works for the Colluli potash mine are expected to be started in 2021 with the start of production expected in 2022. PDF The Colluli Potash Project Project, Colluli) Quarterly Report CMSC, For Proudly Researched by: Melanie Miles. 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. The project is the only known source of potash that allows extraction of the fertilizer in solid form. In the long run, potash consumption is expected to continue to grow as a result of population expansion. These include: No poverty, zero hunger, quality Colluli - Danakali Limited as being forecasted back in 2015 has been removed from the supply side (Fig. Fig. M&A: Mining Finance | Mining Journal Shallowest known evaporite deposit globally. The Colluli project is located in the Danakil Depression region of Eritrea, East Africa, about 75 km from the Red Sea coast. Colluli will be a simple open-cut mining operation utilising truck and shovel methods complemented by continuous surface miners. 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). It has had a border war with Ethiopia and a clash along the border with Djibouti. Mining in Eritrea: could a new potash project spur sustainable growth? Only 1% of the population has access to the internet, according to the World Bank. Annual output 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. 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. Italy created the colony of Eritrea in the 19th century around Asmara and gave it its current name. 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. 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. Table 1. Have the local Afar people been displaced and supplies to their communities cut to allow access to the site? This project has been viewed 588 times. 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. DANAKALI Ltd., Eritrea - Colluli Potash Project | Aktienforum | Aktien The Company is developing Colluli in partnership with the Eritrean National Mining Corporation (ENAMCO). DRA Global was selected as the engineering, procurement, construction and management (EPCM) contractor for the project in September 2018. 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.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 miner said it would use the remaining cash about $12 million to identify new projects and potential new alternative growth opportunities.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.The project has the worlds largest JORC compliant reserve at 1.1 billion tonnes. Discover how your business could benefit from a base in Masdar Citys economic free zone, download this free whitepaper. The project, 50/50 owned by Australian mining company Danakali and the Eritrean Government, is rapidly progressing towards construction. 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. A comparison of Colluli with vertically-integrated SOP producing competitors, from the same source as Fig. Colluli is without peer on capital intensity and production capacity with the ability to expand rapidly. The country only has one preferential trade agreement in force (with Italy) and is not a member of the World Trade Organisation. "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. Please disable your ad-blocker and refresh. #goog-gt-tt {display:none !important;} 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. On July 9, 2018, a joint declaration of peace and friendship was signed between Eritrea and Ethiopia. Potassium bearing minerals are typically found in areas where ancient inland seas have evaporated leaving behind their minerals. 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. I have no business relationship with any company whose stock is mentioned in this article. 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. 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 removal of Eritrea from the sanction list opened up the country for foreign investments, thus significantly reducing geopolitical risk. 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. 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. Colluli Potash Project Aspires to 'Meaningfully' Advance Eritrea's 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. The country also boasts impressive marine tourist sites, a wide range of flora and fauna, and scenic terrain. The Eritrean government, through ENAMCO, has a 50% interest in the Colluli project. At Colluli, the JORC-2012 compliant mineral resource is estimated at 1,289 Mt at 11% K2O for 260 Mt of contained SOP equivalent. World Class Potash Project In Eritrea Moves Closer To Development - Forbes All land is considered state-owned and property rights are non-existent. 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. education, gender equality, clean water and sanitation, sustainable economic You are talking about the garbage written by Plaut ? In November 2021, Eritrea also signed a memorandum of understanding with China to join its Belt and Road Initiative. 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. US Level 1 ADR . 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. For the area a high-temperature geothermal reservoir was identified in Alid with estimates of a potential heat of 250 to 300 degrees Celsius. The Danakil Depression is located in the Southern region of Eritrea and extends over 300km into Eastern Ethiopia. The company's strategy targets the development of a world-class potash project that will become pivotal for global and African agriculture. 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. 10. 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. Reminders. Morgan Leighton. Image courtesy of Danakali. Apart from SOP, the salt composition at the deposit also allows for the production of other potash products including sulphate of potash-magnesia (SOP-M) and muriate of potash (MOP). 1 0 obj Colluli has a JORC-2012 compliant measured, indicated and inferred resource of 1,289 Mt at 11% K20 equivalent and 7% kieserite. 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). 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. Eritrea has managed to fall out with and then mend fences with every one of its neighbouring countries. 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. These alternative producers require substantial lead times to generate their harvest salts for processing. Our 3 Top Picks. 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. Members of The Natural Resources Hub get exclusive ideas and guidance to navigate any climate. Danakali (ASX: DNK) is the 50% owner of the Colluli Potash Project located in Eritrea. Below, let's look at Danakali Ltd. (DNK.ASX) (OTCPK:SBMSF) (OTCPK:DNKLY), which operates in Eritrea.