The construction works for the Colluli potash mine are expected to be started in 2021 with the start of production expected in 2022. The economy expanded by 2.9% in 2021 and is forecast to surge by 4.8% this year, according to the International Monetary Fund. 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 company is yet to secure an additional US$52 million of capital. Eritreas north-eastern and eastern parts have an extensive coastline along the Red Sea, strategically located along the Maritime Silk Road. The Perth-basedminer noted that despite covid-19 restrictions, engineering, procurement and construction management (EPCM) activities have continued as scheduled. Danakali (ASX: DNK) is the 50% owner of the Colluli Potash Project located in Eritrea. 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. They are in deep need. In comparison, Tessenderlo (OTCPK:TSDOF) and Compass Minerals (CMP) have a P/FCF multiple of 10.0X and 20.9X, respectively. Eritrea has historically struggled to attract large investments because of its unfavourable business climate. The UN says forced labour and detention without trial are common. In 2023, Botswana expects diamond output to decline by 1%. The Report was undertaken during 2018 by senior economists on behalf of the UNDP. Danakali Limited is a resource company focused on the Colluli SOP (Sulphate of Potash) Project in Eritrea, East Africa. 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. 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. 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). During the long struggle, the people of Eritrea managed to forge a common national consciousness but, with peace established, they faced the task of overcoming their ethnic and religious differences in order to raise the country from poverty made worse by years of drought, neglect and war. 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. The project has the worlds largest JORC compliant reserve at 1.1 billion tonnes. 10. Eritrea has one of the world's most brutal dictatorships, but could a huge potash mine be an economic game changer? 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. 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. Colluli is positioned very close to vital potash markets. 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. . Potash products including SOP, MOP, and SOP-M all have the potential to be produced at 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. education, gender equality, clean water and sanitation, sustainable economic 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. Potassium is one of three key fertiliser macro-nutrients essential for healthy soil and plant growth. Profit was boosted by higher metal grades and prices. 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. 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. It is a member of the African Union, the UN and the Intergovernmental Authority on Development which deals with issues around drought and desertification in the Horn of Africa but it is the only African country (out of 55) not to sign up to the African Continental Free Trade Area, the huge free trade area that went live on 1 January 2021. In June 2018, Danakali reached a binding take-or-pay offtake agreement with EuroChem Trading GmbH (EuroChem). 86% of retail CFD accounts lose money. In June 2018, Danakali reached a binding take-or-pay offtake agreement with EuroChem Trading GmbH. second phase of development, as the project has a possible 200-year plus Niels Wage, CEO of Danakali, said: I am pleased to announce the appointment of RA International as our preferred accommodation and support services contractor. Plus500. The report also identified how the mine could help Eritrea It nosedived again in 2017, this time by -10%, before jumping by 13% in 2018. Danakali is just one of many deep-value natural resources ideas covered by Laurentian Research. Status: Design. It also has access to solar, wind and geothermal energy systems the East African rift. It thus follows we should keep an eye on emerging potash producers. Standard, granular and soluble products can be produced for distribution to the market. Fig. .goog-te-menu-value:hover {text-decoration:none !important;} Your email address will not be published. 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 Potash Project, Eritrea. Reminders. 6. the countrys GDP by 2021 and 50% of the nations exports by 2030, while Danakali is developing the tier-1 Colluli potash project, Eritrea, which boasts the world's lowest costs and >200 years of mine life. 7. The stock seems to be agitating for a breakout in recent weeks (Fig. Eritrea is an ancient civilisation dating back thousands of years and was inhabited by early humans. However, in July 2018, a peace agreement was finally reached between Afwerki and Ethiopias Prime Minister, Abiy Ahmed. Please disable your ad-blocker and refresh. The Colluli project requires low upfront development costs and is highly scalable for long-life production. providing 10,000 direct and indirect local jobs. Climate Change and its Impact on Insurance Market - Thematic Ukraine PESTLE Insights - A Macroeconomic Outlook Report, Germany PESTLE Insights - A Macroeconomic Outlook Report. (as referred to in ASX announcements of 3 October 2022, 1 December 2022, and 12 January 2023), it . 5). Members of The Natural Resources Hub get exclusive ideas and guidance to navigate any climate. Journalists say that getting any information out of the country is extremely difficult. 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. body {top:0 !important;} Over 100kg of Colluli product was tested at Ludman Industries in the USA for product compaction behaviour. 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. The Danakil Depression is an emerging potash province in Eritrea and Ethiopia. Shallowest known evaporite deposit globally. It also provides off-takers with additional confidence on Project certainty and fundability, supporting the finalisation of binding bankable offtake agreements. By. 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. Notify me of follow-up comments by email. SOP - a premium grade fertilizer - usually grabs a higher price at US$500-650/t (see here). The cost curve of SOP production as of 2018, from the same source as Fig. Value: R 200 Million+. The project is the only known source of potash that allows extraction of the fertilizer in solid form. DANAKALI Ltd., Eritrea - Colluli Potash Project | Aktienforum | Aktien Forum | Diskussionsboard | Community von finanzen.net 3). It assesses a wide range of econometric data and includes findings . 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 border lands mostly arable are unusable for farming purposes, because of unexploded land mines left over from the war of independence. Asmara is a beautiful city and awash in colonial Italian architectural gems. GDP dropped by -0.6% in 2020 in the wake of the Covid-19 pandemic and a locust invasion. 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. Colluli Mining Share Company secured 165m ($200m) of senior debt finance from the Africa Finance Corporation (AFC) and the African Export-Import Bank (Afreximbank) in August 2019. The Colluli resource contains kainitite, sylvinite and carnallitite ores. In 2023, Botswana expects diamond output to decline by 1%. Pilot tests from the Colluli salts have generated product samples for marketing purposes which are now being distributed to prospective customers. 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. 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. It also has access to solar, wind and geothermal energy systems - the East African rift. Colluli Potash Project is a 50:50 Joint Venture between Danakali Limited and the Eritrean National Mining Company (ENAMCO). 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. 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. The deposit contains mainly three types of potassium bearing salts including sylvinite, carnallitite, and kainitite. It also said that all vendor and contractor packages have now been received. Under the terms of the agreement, EuroChem will take, pay, market, and distribute up to 100% of the Colluli sites SOP fertiliser production over a 10-year term, from the Projects date of commissioning. The Colluli Potash Project is located within the Danakil region of Eritrea, approximately 177km south-east of the capital city Asmara. 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. These circumstances have resulted in it becoming one of the most isolated states in the world. Invest in t. Jason Mitchell is a senior editor at Investment Monitor, with a specialisation in emerging markets. A comparison of Colluli with vertically-integrated SOP producing competitors, from the same source as Fig. 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. Fertiliser is a key component to ensure world food security in the future. Wall Street Bulls Look Optimistic About Nutrien (NTR): Should You Buy? 03 October 2022. Danakali Lmited is selling share to China. The company's strategy targets the development of a world-class potash project that will become pivotal for global and African agriculture. The Company is developing Colluli in partnership with the Eritrean National Mining Corporation (ENAMCO). The project has a 200-year lifecycle and is expected to start operating in 2022. Posted by Daniel Gleeson on 21st August 2020. and mag chloride to be commercialized with minimal further processing required. 4). The Colluli project is located in the Danakil Depression region of Eritrea, East Africa, about 75 km from the Red Sea coast. 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. 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. Sign up HERE today to benefit from Laurentian Research's in-depth research and the TNRH platform right away! Materials handling trials have also been completed to determine the anti-caking requirements for the final SOP product. 5. 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. as being forecasted back in 2015 has been removed from the supply side (Fig. 2). 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. DANAKALI Ltd., Eritrea - Colluli Potash Project | Aktienforum | Aktien Forum | Diskussionsboard | Community von finanzen.at Sadly, Eritrea looks set to remain a failed state as long as he is in office. With planned production of 1m tonnes/year of SOP, it will put Eritrea among the topten potash producers in the world. Colluli has been largely de-risked in terms of. It describes Eritrea as "a dictatorship in which the media has no rights". The location of the Colluli potash deposit, from this source. 3. Thank you for your comment. There is also potential for kieserite I am not receiving compensation for it (other than from Seeking Alpha). Fig. It has had a border war with Ethiopia and a clash along the border with Djibouti. 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. Colluli is a major sulphate of potash (SOP) project located in Eritrea, Eastern Africa. 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). The country only has one preferential trade agreement in force (with Italy) and is not a member of the World Trade Organisation. Foreign investment in most business sectors is heavily restricted and state-owned enterprises distort its markets. In 2019, the country received only $67.1m in foreign direct investment (FDI) inflows against $61m in 2018, according to the World Bank. "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. Colluli is the premier greenfield development project globally. US Level 1 ADR's OTC-DNKLY, CUSIP.23585T101 The world's largest JORC compliant solid salt, Sulphate of . Unlike North Korea, China or Iran, social media is mostly unregulated, but the biggest problem is access to the internet, which is unreliable and expensive. In November 2020, a conflict broke out in the mountainous region of Ethiopia, called Tigray, between Tigrayan forces and the Ethiopian federal troops. 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). 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. The benefits of this means we generate cash flow much earlier and more predictably relative to solution mining or brine operations. Over the next three decades, almost 95% of the population growth will occur in Africa, India, and South-East Asia. 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. Open-cut solid salt mining beats underground solid salt mining, lacustrine brine, and playa brine in operating costs. endobj 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. 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. There are 70 Subscribers monitoring this project. About 55% of the Eritrean population is Tigrinya while 30% is Tigre, but there are a number of other smaller ethnicities including Saho and Kunama. 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. Some people have been in national conscription for more than 20 years. Colluli contains three potassium-bearing salts in solid form, namely. The deposit stretches across the border into Ethiopia. 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. It has industry-leading capital intensity, forecast first quartile operating costs, and highly attractive economic returns. Danakali to cash out of Colluli. Below, let's look at Danakali Ltd. (DNK.ASX) (OTCPK:SBMSF) (OTCPK:DNKLY), which operates in Eritrea. Upon accepting the notice, the ministry, Danakali said, also showed support for the financing of the Colluli project by: Table 1. Eritrea was, until 2018, on the UNs sanctions list. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Colluli is owned by the Colluli Mining Share Company, a 50:50 joint venture with the Eritrean National Mining Company. Fertilizer potash is needed in the sustainable production of grains, oilseeds, fruits, and vegetables. 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. (3) various tools to aid your investment decision making, (4) trade alerts and multiple thematic weekly newsletters and. World potash demand has grown at an average rate of 2.5-3.0% per year since 2000 (Fig. A United Nations report published in 2019suggested that Colluli could significantly boost the economy of Eritrea. The government monitors telephone and internet traffic and runs an extensive domestic surveillance system. Business intelligence for leaders in foreign direct investment. The project will be developed in multi-modules, with Module I serving as a platform for future growth. 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. 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 . 6. Why isn't Europe investing more in recycling plastic. Extraction of the salts in solid form is a crucial positive differentiator of Colluli. Last Updated on: 01 December 2022. keyValue[2].split('/')[2] : null;} The Colluli potash deposit is considered to be one of the worlds shallowest evaporite mineralisation with potash resources found just 16m below the surface. 2 0 obj 9. In the long run, potash consumption is expected to continue to grow as a result of population expansion. Select LanguageChinese (Simplified)EnglishGerman The above advantageous features combine to make Colluli the lowest-cost SOP producer outside of China (Fig. 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. seriously, this Man is a lobbyist of TPLF A group designated as a Terrorist Organisation in Ethiopia. It is actually resistant to the wests oppression in the most pure sense of the term. 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. 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. 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. On September 11, 2018, the Eritrea-Ethiopia border re-opened for the first time since 1998. The Colluli potash project is a low-cost, long-life sulphate of potash (SOP) project under development in Eritrea, Eastern Africa. 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. and then onto production in 2022, Danakali said. Information about Eritrea and the Horn of Africa. Anyone can write a book, as long as is a white person, you would buy it even a white homeless from NYC. 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. 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. 2022 The Colluli potash project is a low-cost, long-life sulphate of potash (SOP) project under development in Eritrea, Eastern Africa. This article lost credibility in characterizing the country of Eritrea as most oppressive regime. 6. 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. Looking for a helping hand in the market? The SOP quality spectrum, from the same source as 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). SOP in developing regions where the highest rates of population growth are expected, from. Simplified process flow for the production of SOP from the Colluli resource, from this source. 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 A number of unique characteristics make Colluli one of the world's largest and lowest-cost deposits of SOP. 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. We need a bit of money.' Danakali, an Australian company that has been developing the Colluli potash project in Eritrea, was recently granted permission by the Eritrean Ministry of Energy and Mines to commence commercial production at Colluli. mine-life. 2023 Glacier Media Group, All Rights Reserved, selling its 50% stake in the Colluli potash project, Botswana mining growth seen flat amid dim diamond outlook, Harmony Gold CEO says gold sector consolidation inevitable, BHP seeks to tighten grip on South Americas copper sector, Quest for worlds biggest diamonds gives De Beers a headache, https://www.hrw.org/world-report/2021/country-chapters/eritrea, https://www.dandc.eu/en/article/how-government-eritrea-became-one-worlds-most-repressive-regimes, https://www.hurstpublishers.com/book/understanding-eritrea-2/, 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. 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. It also has access to solar, wind and geothermal energy systems the East African rift. 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. It is estimated that 49% of the population is Christian and a further 49% is Sunni Muslim.

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