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World potash demand has grown at an average rate of 2.5-3.0% per year since 2000 (Fig. Danakali Limited is a resource company focused on the Colluli SOP (Sulphate of Potash) Project in Eritrea, East Africa. 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). 4. (MOP) and gypsum, along with rock salt. 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. The report also identified how the mine could help Eritrea Niels Wage, CEO of Danakali, said: I am pleased to announce the appointment of RA International as our preferred accommodation and support services contractor. inequalities, climate action, peace, justice and strong institutions and The project has the worlds largest JORC compliant reserve at 1.1 billion tonnes. 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 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continued new business momentum with another significant award in the mining sector., Your email address will not be published. Colluli is a major sulphate of potash (SOP) project located in Eritrea, Eastern Africa. The potassium salt composition in the resource provides the option to diversify the potash product suite as the Project grows. Fig. 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. The deposit contains mainly three types of potassium bearing salts including sylvinite, carnallitite, and kainitite. Fig. In the initial phase of operation, Wage said, Colluli would ,and the value is around 67,000.00 . The economy expanded by 2.9% in 2021 and is forecast to surge by 4.8% this year, according to the International Monetary Fund. 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 mineralization in the Colluli deposit starts at just 16m, making it the shallowest known potash deposit in the world, and thus amenable to low-cost, open-cut mining. 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. 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. keyValue[2].split('/')[2] : null;} You are talking about the garbage written by Plaut ? 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. Danakali: Why This Little-Known Potash Developer Is A Buy <> 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. 4. Danakali is just one of many deep-value natural resources ideas covered by Laurentian Research. Surface mining allows controlled extraction, predictable production rates and efficient stockpiling of additional economic salts know to us. Although the total productive life is estimated to be approximately 200 years, the current plan calls for the development of the mine in two stages to support an initial operational life of 60 years. The UN says forced labour and detention without trial are common. Colluli is located in the Danakil Depression region of Eritrea and is approximately 230km by road southeast of the port of Massawa, which is Eritreas key import/export facility. It has industry-leading capital intensity, forecast first quartile operating costs, and highly attractive economic returns. Internal industry and services contribute the majority of the remaining GDP, while agriculture accounts for only 13% (despite employing 80% of the population). Fertiliser is a key component to ensure world food security in the future. DANAKALI Ltd., Eritrea - Colluli Potash Project | Aktienforum | Aktien Forum | Diskussionsboard | Community von finanzen.at 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. The Project has unrivalled potash product versatility. The Colluli resource contains kainitite, sylvinite and carnallitite ores. The project has been largely derisked with regard to geopolitics, infrastructure, off-take, and financing. Reminders. PDF The Colluli Potash Project Project, Colluli) Quarterly Report CMSC, For For the area a high-temperature geothermal reservoir was identified in Alid with estimates of a potential heat of 250 to 300 degrees Celsius. It describes Eritrea as "a dictatorship in which the media has no rights". 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. 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. 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). 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. Danakali eyes finish line for Eritrea potash project mine-life. 2022 The Colluli potash project is a low-cost, long-life sulphate of potash (SOP) project under development in Eritrea, Eastern Africa. 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. Eritrea has historically struggled to attract large investments because of its unfavourable business climate. I am not receiving compensation for it (other than from Seeking Alpha). A two-and-a-half-year border war between Ethiopia and Eritrea ended in June 2000 and was followed by about eight years of heightened tension and hostility between the two countries. Colluli is located about 75 kilometres from the Red Sea coast, making it among the most accessible premium potash deposits globally. It is estimated to have about 80,000 archaeological sites. The accommodation camp, meanwhile, has been designed to accommodate 600 personnel during the production phase with the flexibility to accommodate 1,115 during the construction phase. The project has the world's. The front-end engineering and design (FEED) study for the project was completed in January 2018. Fertilizer potash is needed in the sustainable production of grains, oilseeds, fruits, and vegetables. 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. (5) a community of investors to bounce off ideas and share information with. 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. 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). development of the project, and the expected significant boost to royalties, 3). I am not receiving compensation for it (other than from Seeking Alpha). 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. Mobile data does not exist. Two articles indicate the rapid progress towards the development of a vast potash mine in the Danakil desert. 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. countries-Eritrea - - | Reverso Context second phase of development, as the project has a possible 200-year plus Copyright 2023, All Rights Reserved | Alphastox | Proudly Hosted by, Danakali to sell stake in flagship Colluli potash project in Eritrea, Canada Nickel develops new method for accelerated carbon capture, Patriot Battery Metals drills nine holes at Corvette, Metso Outotec expands digital grinding inspections with acquisition of Global Physical, Fatal accident at Ivanhoes Kamoa-Kakula mine in Congo. 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? SOP - a premium grade fertilizer - usually grabs a higher price at US$500-650/t (see here). The Danakil Depression is located in the Southern region of Eritrea and extends over 300km into Eastern Ethiopia. Business intelligence for leaders in foreign direct investment. 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. 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. Upon accepting the notice, the ministry, Danakali said, also showed support for the financing of the Colluli project by: A big economic change will come to eritrea, proud to be an nseritrea. Danakali (DNK) - Technical Analysis - Crux Investor 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. After all considerations and government taxes, Danakali said it expects to receive approximately $121m. Danakali rates 2022 potash target unlikely as "all options - Miningmx My References:Danakali Ltd:https://www.danakali.com.au/ Interested in supporting this channel: Paypal: PayPal . Is this happening to you frequently? It has a Human Development Index of 0.42, which puts it among the ten least-developed countries on the planet. But when [Afwerki] discovers that his authority is being questioned after independence, he begins reacting in the same way. The west really needs to let go of calling every developing nation that doesnt bend at its will oppressive. Agnico Eagle's EPS beat expectations; guidance maintained. These authors includeSilver Coast Research, , among others. 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. 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. Danakali to use filtered sea water at Colluli potash mine The asset has the potential to produce other fertilizer 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. Therefore, the Eritrean government has a strong incentive to see the project be built, in production, and run successfully. 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. Sylvinite and carnallitite both produce potassium chloride, which is then combined with decomposed kainitite to form high purity potassium sulphate. To open fire on your own disabled [people] is pretty appalling.". The Colluli potash mine is estimated to hold 1.1 billion tonnes of SOP ore reserves grading 10.5% potassium oxide (K2O). Eritrea was, until 2018, on the UNs sanctions list. Danakali to sell stake in flagship Colluli potash project in Eritrea 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 company expects to start full commercial production in mid-December 2022. 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. Visit our privacy policy for more information about our services, how we may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Danakali closer to getting Eritrea potash project off the ground 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. 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. % Posted by Daniel Gleeson on 21st August 2020. Danakali (DNK) - Technical Analysis. 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. Image courtesy of Danakali. The Colluli potash project is located in the Danakil Depression region of Eritrea, in East Africa, approximately 75km away from the Red Sea coast and approximately 177km southeast of capital Asmara. 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. BHP officials met with Argentinian authorities this week, expressing interest in increasing investments in the San Juan province. A United Nations report published in 2019 suggested that Colluli could significantly boost the economy of Eritrea. 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. 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