The border lands mostly arable are unusable for farming purposes, because of unexploded land mines left over from the war of independence. The cost curve of SOP production as of 2018, from the same source as Fig. 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. 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). Mobile data does not exist. Posted by Daniel Gleeson on 21st August 2020. of Eritrea and Ethiopia, which officially declared peace in July 2018. 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. Discover how your business could benefit from a base in Masdar Citys economic free zone, download this free whitepaper. "There is a supportive business environment because mining there is a very strategic industry. EuroChem is an outstanding partner with global reach and extensive fertiliser capabilities. There are many sources of potassium, including. Invest in t. Potassium bearing minerals are typically found in areas where ancient inland seas have evaporated leaving behind their minerals. Colluli has a JORC-2012 compliant Measured, Indicated and Inferred Mineral Resource estimate of 1,289Mt @11% K20. It also contains other fertilizer products, such as muriate of potash (MOP) and gypsum, along with rock salt. The underapplication of SOP in developing regions where the highest rates of population growth are expected, from this source. RA, listed . 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. 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. Reverso Context-: The Danakil Depression is an emerging potash province in Eritrea and Ethiopia. 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. Colluli is the premier greenfield development project globally. He is one of the world's most brutal and paranoid dictators and has repressed the population for many decades. second phase of development, as the project has a possible 200-year plus Table 1. The resource contains 303Mt @ 11% K2 0 of Measured Resource, 951Mt @ 11% K2 0 of Indicated Resource and 35Mt @ 10% K20 of Inferred Resource. 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. Fig. I'd like to emphasize that the articles contributed by these authors are the product of their respective independent research and analysis. Image courtesy of Danakali. Some people have been in national conscription for more than 20 years. 10. education, gender equality, clean water and sanitation, sustainable economic Morgan Leighton. 2022 The Colluli potash project is a low-cost, long-life sulphate of potash (SOP) project under development in Eritrea, Eastern Africa. 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 assesses a wide range of econometric data and includes findings . In July 2013, major producer Belaruskali broke up with former Belarusian Potash Company cartel partner Uralkali, and in a move to grab market share, signed a potash sales contract for the Chinese market at US$315/t MOP. 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 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. My References:Danakali Ltd:https://www.danakali.com.au/ Interested in supporting this channel: Paypal: PayPal . The development of the Colluli potash projects coincides keyValue[2].split('/')[2] : null;} Fig. One-third of the country's GDP is made up of remittances sent home by Eritreans living in Europe and other developed countries. It has a Human Development Index of 0.42, which puts it among the ten least-developed countries on the planet. Over the next three decades, almost 95% of the population growth will occur in Africa, India, and South-East Asia. Sylvinite and carnallitite both produce potassium chloride, which is then combined with decomposed kainitite to form high purity potassium sulphate. We are confident in RA Internationals capabilities to deliver a high-quality product and service.. With the first production scheduled for 2022, Danakali is well positioned to emerge as a pure-play SOP producer in the coming years, especially considering its low-cost structure (Fig. Colluli has significant multi-commodity potential presenting major additional value upside. 6. Surface mining allows controlled extraction, predictable production rates and efficient stockpiling of additional economic salts know to us. Artists impression of the plant at the Colluli project. Disclosure: I am/we are long SBMSF, CMP. Colluli contains three potassium-bearing salts in solid form, namely. The border with Sudan was closed until early 2019 because relations were so bad. The Eritrean government, through ENAMCO, has a 50% interest in the Colluli project. 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 document estimated that Colluli would contribute 3% of 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,. Potash, an important fertiliser, could be a game changer for Eritrea and other African countries. 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. The stock chart of Danakali, modified from this source. Extraction of the salts in solid form is a crucial positive differentiator of Colluli. 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. Open-cut solid salt mining beats underground solid salt mining, lacustrine brine, and playa brine in operating costs. Journalists say that getting any information out of the country is extremely difficult. 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. 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). 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). I have taken a starter position and plan to build a position of meaningful size in the next couple of years. .goog-te-menu-value:hover {text-decoration:none !important;} 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. Eritreas north-eastern and eastern parts have an extensive coastline along the Red Sea, strategically located along the Maritime Silk Road. (. 9. The benefits of this means we generate cash flow much earlier and more predictably relative to solution mining or brine operations. There are 70 Subscribers monitoring this project. Has access to the Ethiopian side of the deposit been guaranteed? providing 10,000 direct and indirect local jobs. 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. A United Nations reportpublished last yearsuggested that Colluli could significantly boost Eritreas economy. It is actually resistant to the wests oppression in the most pure sense of the term. 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. function googleTranslateElementInit2() {new google.translate.TranslateElement({pageLanguage: 'en',autoDisplay: false}, 'google_translate_element2');} 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. A pre-feasibility study for the project was completed in February 2015 followed by the completion of a definitive feasibility study (DFS) in November 2015, while the mining license was granted in February 2017. Fig. Danakali Limited is a resource company focused on the Colluli SOP (Sulphate of Potash) Project in Eritrea, East Africa. endobj 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. It is estimated to have about 80,000 archaeological sites. 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. Proudly Researched by: Melanie Miles. 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. AFC also agreed for an additional 39m ($50m) of strategic equity investment in Danakali in December 2019. The mine will put Eritrea among the top ten potash producers in the world and impact the global supply chain of high-quality fertiliser. 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. Shallowest known evaporite deposit globally. inequalities, climate action, peace, justice and strong institutions and After all considerations and government taxes, Danakali said it expects to receive approximately $121m. With planned production of 1m tonnes/year of SOP, it will put Eritrea among the topten potash producers in the world. 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. It thus follows we should keep an eye on emerging potash producers. 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. 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. development of the project, and the expected significant boost to royalties, 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. This post has been syndicated from a third-party source. What Are the Best Fertilizer Stocks? All land is considered state-owned and property rights are non-existent. It has a geographic area of 117,600km2, making it slightly larger than Bulgaria. Only 1% of the population has access to the internet, according to the World Bank. MiningOther CommoditiesIndustrial Minerals, Danakali (50%) and Eritrean National Mining Corporation (ENAMCO, 50%). 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. 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. The project also involves the construction of a heavy fuel oil-based power plant on-site to meet the electricity requirement. 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 . It has been a Unesco World Heritage Site since 2017. RA, listed on the London Stock Exchanges AIM board, specialises in building, operating and maintaining facilities in remote and challenging conditions across Africa, providing complex humanitarian, governmental, mining, and other commercial developments and services, Danakali says. The SOP quality spectrum, from the same source as Fig. If you have an ad-blocker enabled you may be blocked from proceeding. 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. A Front-End Engineering Design (FEED) study confirmed an advanced stage and economically attractive Project. This project has been viewed 588 times. mine-life. <>/Metadata 306 0 R/ViewerPreferences 307 0 R>> 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 (ASX: DNK) is the 50% owner of the Colluli Potash Project located in Eritrea. Sign up HERE today to benefit from Laurentian Research's in-depth research and the TNRH platform right away! 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 economy expanded by 2.9% in 2021 and is forecast to surge by 4.8% this year, according to the International Monetary Fund. It nosedived again in 2017, this time by -10%, before jumping by 13% in 2018. 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. 10). Fig. Following the agreement, Collulis position as an economically attractive SOP greenfield development project has been reinforced. 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. 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. 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 (. 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. The Colluli potash mine is estimated to hold 1.1 billion tonnes of SOP ore reserves grading 10.5% potassium oxide (K2O). 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. The front-end engineering and design (FEED) study for the project was completed in January 2018. 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 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 total measured, indicated and inferred SOP mineral resources at the deposit are estimated to be 1.29 billion tonnes grading 11% K2O. 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. It has industry-leading capital intensity, forecast first quartile operating costs, and highly attractive economic returns. 11). 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 was, until 2018, on the UNs sanctions list. The Colluli potash deposit is considered to be one of the worlds shallowest evaporite mineralisation with potash resources found just 16m below the surface. They have significant experience in executing projects of the scale and quality required for the Colluli project. According to the article below the mine will require 1,115 workers during the construction phase and 600 thereafter. The Colluli potash project is a low-cost, long-life sulphate of potash (SOP) project under development in Eritrea, Eastern Africa. 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. Niels Wage, CEO of Danakali, said: I am pleased to announce the appointment of RA International as our preferred accommodation and support services contractor. The open-cut, high-grade potash project is being developed by Colluli Mining Share Company (CMSC), a 50:50 joint venture partnership between Australias Danakali and Eritrean National Mining Corporation (ENAMCO). A big economic change will come to eritrea, proud to be an nseritrea. 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). These circumstances have resulted in it becoming one of the most isolated states in the world. 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. The agreement can be further extended by three years if mutually agreed upon. Eritrea has historically struggled to attract large investments because of its unfavourable business climate. A United Nations report published in 2019suggested that Colluli could significantly boost the economy of Eritrea. 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. Australias Danakali (ASX, LON:DNK) said on Thursday it was in the final stages of completing the second phase of developmentof its world-class Colluli potash project in Eritrea, Africa. The UN says forced labour and detention without trial are common. In 2023, Botswana expects diamond output to decline by 1%. 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? 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 Therefore, the Eritrean government has a strong incentive to see the project be built, in production, and run successfully. "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. Anyone can write a book, as long as is a white person, you would buy it even a white homeless from NYC. Economic resources for Sulphate of Potash (SOP) production are scarce, and Colluli is favourably positioned to supply the worlds fastest-growing SOP markets. Danakali explored the use of filtered seawater at Colluli. Your email address will not be published. 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). We use them to give you the best experience. But when [Afwerki] discovers that his authority is being questioned after independence, he begins reacting in the same way. Producer of 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. 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. Colluli is 75km from the Red Sea coast, providing unrivalled future logistics potential. So, as a mining jurisdiction, it has got nothing but ticks in all the right boxes.". 6. Niels Wage, CEO of Danakali, said: "We are very pleased to announce the appointment of Aggreko as our single power provider. In 2019, the country received only $67.1m in foreign direct investment (FDI) inflows against $61m in 2018, according to the World Bank. Adjusted net income of $0.52 beat the consensus estimate of $0.43. SOP - a premium grade fertilizer - usually grabs a higher price at US$500-650/t (see here). The asset has the potential to produce other 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.

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