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. It thus follows we should keep an eye on emerging potash producers. It also has access to solar, wind and geothermal energy systems the East African rift. Colluli is obviously a tier-1 asset, boasting the lowest-costs in the world and >200 years of mine life. He is one of the world's most brutal and paranoid dictators and has repressed the population for many decades. It also contains other fertilizer products, such as muriate of potash (MOP) and gypsum, along with rock salt. <> I am not receiving compensation for it (other than from Seeking Alpha). Colluli is located about 75 kilometres from the Red Sea coast, making it among the most accessible premium potash deposits globally. EuroChem is an outstanding partner with global reach and extensive fertiliser capabilities. Due to this change if you are seeing this message for the first time please make sure you reset your password using the Forgot your password Link. Has access to the Ethiopian side of the deposit been guaranteed? The deposit contains mainly three types of potassium bearing salts including sylvinite, carnallitite, and kainitite. It has a geographic area of 117,600km2, making it slightly larger than Bulgaria. The Colluli project is located in the Danakil Depression region of Eritrea, East Africa, about 75 km from the Red Sea coast. 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,. The front-end engineering and design (FEED) study for the project was completed in January 2018. The country also boasts impressive marine tourist sites, a wide range of flora and fauna, and scenic terrain. Below, let's look at Danakali Ltd. (DNK.ASX) (OTCPK:SBMSF) (OTCPK:DNKLY), which operates in Eritrea. 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. The project's potential profitability is helped by soaring potash prices they jumped by 300% during 2021, sitting at above $700 per tonne (CFR Brazil Spot) at the end of October 2021. By downloading this Whitepaper, you acknowledge that we may share your information with our white paper partners/sponsors who may contact you directly with information on their products and services. 2 0 obj The report also identified how the mine could help Eritrea Das wrde mich fr Eritrea sehr freuen und hoffe das es den Menschen dort zugute kommt.Ich liebe dieses Land zumal meine Tochter einen eritreischen Vater hat.. Danakali Limited is a resource company focused on the Colluli SOP (Sulphate of Potash) Project in Eritrea, East Africa. RA, listed . Our people is poor continue!!!! 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. Invest in t. Potassium bearing minerals are typically found in areas where ancient inland seas have evaporated leaving behind their minerals. Proudly Researched by: Melanie Miles. Fig. These include: No poverty, zero hunger, quality Profit was boosted by higher metal grades and prices. 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. 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. Danakali is just one of many deep-value natural resources ideas covered by Laurentian Research. In the initial phase of operation, Wage said, Colluli would 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. 4. The country only has one preferential trade agreement in force (with Italy) and is not a member of the World Trade Organisation. 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. 6. Last Updated on: 01 December 2022. 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. 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. According to the article below the mine will require 1,115 workers during the construction phase and 600 thereafter. BHP officials met with Argentinian authorities this week, expressing interest in increasing investments in the San Juan province. finished in June, will take the company a step closer to the construction phase Asmara is a beautiful city and awash in colonial Italian architectural gems. 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 600 person camp capacity is exclusive of camp services personnel, which will have an additional camp, provided by RA, located within the overall camp boundary. A pre-feasibility study was completed in February 2015, followed by the completion of a definitive feasibility study in November 2015, while the mining licence was granted in February 2017. 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. 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. 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 shortfall of projected and actual global potash capacity, from this source. In November 2021, Eritrea also signed a memorandum of understanding with China to join its Belt and Road Initiative. In 2023, Botswana expects diamond output to decline by 1%. 4). #goog-gt-tt {display:none !important;} Danakali to cash out of Colluli. Fig. 4. The Colluli project is a 5050 joint venture between South Boulder Mines and the government-owned Eritrean National Mining Corporation. 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. There is also potential for kieserite 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. 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. Fig. 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. (3) various tools to aid your investment decision making, (4) trade alerts and multiple thematic weekly newsletters and. Have the local Afar people been displaced and supplies to their communities cut to allow access to the site? 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){}} A United Nations reportpublished last yearsuggested that Colluli could significantly boost Eritreas economy. Net to Danakali's 50% interest, Module I is projected to generate NPV-10 of 242 million, on average delivering an undiscounted FCF of US$43 million per year, with a post-finance IRR of 29.7%; module I&II is projected to generate NPV-10 of 439 million, on average delivering an undiscounted FCF of US$85 million per year, with a post-finance IRR of 31.3% (Table 1). Shareholders are slated to . A binding offtake agreement for up to 100% of Module I SOP production, and a US$200M debt financing term sheet have been executed, and all material permits are in place. Sadly, Eritrea looks set to remain a failed state as long as he is in office. 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. The company expects to start full commercial production in mid-December 2022. However, the country is home to one of the world's biggest potash deposits which straddles the border with Ethiopia. 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. This is a report that was prepared by independent consultants and initiated and funded by the United Nations Development Programme (UNDP) on the potential contributions of Colluli to Eritrea's Sustainable Development Goals has been released. For the area a high-temperature geothermal reservoir was identified in Alid with estimates of a potential heat of 250 to 300 degrees Celsius. In the long run, potash consumption is expected to continue to grow as a result of population expansion. 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. Fertilizer potash is needed in the sustainable production of grains, oilseeds, fruits, and vegetables. We are confident in RA Internationals capabilities to deliver a high-quality product and service.. 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. I focus on identifying high-quality deep values in the natural resources sector and undervalued wide-moat businesses, an investment approach that has proven to be extremely rewarding over the years. with the move towards diplomatic relations between the once feuding countries 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. Colluli Potash Project is a 50:50 Joint Venture between Danakali Limited and the Eritrean National Mining Company (ENAMCO). Niels Wage, CEO of Danakali, said: "We are very pleased to announce the appointment of Aggreko as our single power provider. 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 also said that all vendor and contractor packages have now been received. I have no business relationship with any company whose stock is mentioned in this article. Profit was boosted by higher metal grades and prices. education, gender equality, clean water and sanitation, sustainable economic . I have taken a starter position and plan to build a position of meaningful size in the next couple of years. Fig. endobj The project, 50/50 owned by Australian mining company Danakali and the Eritrean Government, is rapidly progressing towards construction. 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. 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. The stock seems to be agitating for a breakout in recent weeks (Fig. The Danakil Depression that commences in Eritrea and extends up to 300km into Ethiopia, is believed to contain more than six billion tonnes of potassium bearing salts. Danakali (ASX: DNK) is the 50% owner of the Colluli Potash Project located in Eritrea. produce more than 472,000 tonnes a year of Sulphate of Potash. Best. Finance > M-a. Danakali is developing the tier-1 Colluli potash project, Eritrea, which boasts the world's lowest costs and >200 years of mine life. Colluli Potash Project, Eritrea. 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. The Danakil Depression is an emerging potash province in Eritrea and Ethiopia. #google_translate_element2 {display:none!important;} It has been a Unesco World Heritage Site since 2017. Analysis of the potential contribution of Colluli potash project to sustainable development goals in Eritrea. The project also involves the construction of a heavy fuel oil-based power plant on-site to meet the electricity requirement. AFC also agreed for an additional 39m ($50m) of strategic equity investment in Danakali in December 2019. <> 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. 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. 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? The front-end engineering design (FEED), expected to be I bought many shares @ 67 Cents per share, total of 240.000.00 Now the share is under 20 Cents. Looking for a helping hand in the market? 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). 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. Posted by Daniel Gleeson on 21st August 2020. The border with Sudan was closed until early 2019 because relations were so bad. .goog-te-menu-value:hover {text-decoration:none !important;} It is estimated to have about 80,000 archaeological sites. These alternative producers require substantial lead times to generate their harvest salts for processing. The Colluli project requires low upfront development costs and is highly scalable for long-life production. This article lost credibility in characterizing the country of Eritrea as most oppressive regime. Sylvinite and carnallitite both produce potassium chloride, which is then combined with decomposed kainitite to form high purity potassium sulphate. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. keyValue[2].split('/')[2] : null;} Some 7 Mt of potash capacity as being forecasted back in 2015 has been removed from the supply side (Fig. With a growing world population, demand for food will increase, while the availability of arable land is expected to shrink. Your email address will not be published. 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 independent study, commissioned and funded by the UN Development Program (UNDP), assesses a wide range of econometric data and includes . 1. Additionally, it will provide comprehensive camp services incorporating catering, cleaning, laundry, pest and vector control, grounds keeping and waste management. We use them to give you the best experience. seriously, this Man is a lobbyist of TPLF A group designated as a Terrorist Organisation in Ethiopia. Danakali has reported a 1.1 billion ore reserve with a mine life of almost 200 years. taxation and exports, and from jobs and skills and economic development of the 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. This long-lasting tension has led to Eritrea's militarisation. 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. SOP - a premium grade fertilizer - usually grabs a higher price at US$500-650/t (see here). Status: Design. The government will benefit from the longer-term 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. A comparison of Colluli with vertically-integrated SOP producing competitors, from the same source as Fig. The deposit stretches across the border into Ethiopia. The JORC-2012 compliant mineral resource estimate, from this source. Disclosure: I am/we are long SBMSF, CMP. 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. Anyone can write a book, as long as is a white person, you would buy it even a white homeless from NYC. The economy expanded by 2.9% in 2021 and is forecast to surge by 4.8% this year, according to the International Monetary Fund.