colluli potash project in eritrea 2022

2). It is actually resistant to the wests oppression in the most pure sense of the term. 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. Upon accepting the notice, the ministry, Danakali said, also showed support for the financing of the Colluli project by: 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. Additionally, it will provide comprehensive camp services incorporating catering, cleaning, laundry, pest and vector control, grounds keeping and waste management. Surface mining allows controlled extraction, predictable production rates and efficient stockpiling of additional economic salts know to us. Image courtesy of Danakali. There is also potential for kieserite and mag chloride to be commercialized with minimal further processing required. I wrote this article myself, and it expresses my own opinions. 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. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Click to follow this blog and receive notifications of new posts by email. .goog-te-menu-value:hover {text-decoration:none !important;} Potash is an important fertiliser. 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. 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. A United Nations reportpublished last yearsuggested that Colluli could significantly boost Eritreas economy. A Front-End Engineering Design (FEED) study confirmed an advanced stage and economically attractive Project. It also has access to solar, wind and geothermal energy systems the East African rift. %PDF-1.7 Eritrea was, until 2018, on the UNs sanctions list. The document estimated that Colluli would contribute 3% of 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. The asset has the potential to produce other fertilizer 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. If you have an ad-blocker enabled you may be blocked from proceeding. as being forecasted back in 2015 has been removed from the supply side (Fig. The Colluli potash deposit is considered to be one of the worlds shallowest evaporite mineralisation with potash resources found just 16m below the surface. Status: Design. partnerships for the SDGs. Masdar City Free Zone, in the United Arab Emirates capital, offers a hassle-free environment in which companies can operate. Table 1. and mag chloride to be commercialized with minimal further processing required. 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. US Level 1 ADR's OTC-DNKLY, CUSIP.23585T101 The world's largest JORC compliant solid salt, Sulphate of . In spite of the projected long-term growth of potash demand, the building of new production capacity has been lagging in the past few years, thanks to low potash prices. of Eritrea and Ethiopia, which officially declared peace in July 2018. These include: No poverty, zero hunger, quality The UN says forced labour and detention without trial are common. It is estimated that 49% of the population is Christian and a further 49% is Sunni Muslim. stream Morgan Leighton. The miner said it would use the remaining cash about $12 million to identify new projects and potential new alternative growth opportunities.. development of the project, and the expected significant boost to royalties, 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. The project has been largely derisked with regard to geopolitics, infrastructure, off-take, and financing. Colluli is positioned very close to vital potash markets. 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 Danakil Depression, which extends over 300km into eastern Ethiopia, hosts over 6,000 Mt of potassium-bearing salts suitable for the production of potash fertilizers. The company expects to start full commercial production in mid-December 2022. growth and decent work, industry, innovation and infrastructure, reduced In November 2021, Eritrea also signed a memorandum of understanding with China to join its Belt and Road Initiative. The Colluli potash project is a low-cost, long-life sulphate of potash (SOP) project under development in Eritrea, Eastern Africa. I recommend a book by Martin Plaut, a senior researcher at Londons Institute of Commonwealth Studies and former Africa Editor of the BBCs World Service called Understanding Eritrea: Inside Africas Most Repressive State (https://www.hurstpublishers.com/book/understanding-eritrea-2/). 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. 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. 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. 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. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Danakali has reported a 1.1 billion ore reserve with a mine life of almost 200 years. So, as a mining jurisdiction, it has got nothing but ticks in all the right boxes.". 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. Required fields are marked *. The total measured, indicated and inferred SOP mineral resources at the deposit are estimated to be 1.29 billion tonnes grading 11% K2O. 1). Fig. Based on what evidence? SOP - a premium grade fertilizer - usually grabs a higher price at US$500-650/t (see here). The SOP quality spectrum, from the same source as Fig. The Colluli potash project is expected to commence production in 2022. 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 is estimated to have about 80,000 archaeological sites. 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. Business intelligence for leaders in foreign direct investment. According to the article below the mine will require 1,115 workers during the construction phase and 600 thereafter. with the move towards diplomatic relations between the once feuding countries There are 70 Subscribers monitoring this project. 2 0 obj 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 fertilizer. 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 production of other agricultural and salt products, including Rock Salt, Kieserite, Gypsum and Magnesium Chloride, is also possible from the Colluli resource. Danakali (ASX: DNK) is the 50% owner of the Colluli Potash Project located in Eritrea. 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. These alternative producers require substantial lead times to generate their harvest salts for processing. The resource contains 303Mt @ 11% K2 0 of Measured Resource, 951Mt @ 11% K2 0 of Indicated Resource and 35Mt @ 10% K20 of Inferred Resource. The shortfall of projected and actual global potash capacity, from this source. 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). "The analysis of direct impacts of Colluli potash project and its potential contributions to the sustainable development agenda in Eritrea is focused on five main areas," the report states. function googleTranslateElementInit2() {new google.translate.TranslateElement({pageLanguage: 'en',autoDisplay: false}, 'google_translate_element2');} 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. function GTranslateGetCurrentLang() {var keyValue = document['cookie'].match('(^|;) ?googtrans=([^;]*)(;|$)');return keyValue ? <> Flour was awarded the FEED contract for the Colluli potash project in January 2017. Annual output Two articles indicate the rapid progress towards the development of a vast potash mine in the Danakil desert. Information about Eritrea and the Horn of Africa. and then onto production in 2022, Danakali said. Eritreas north-eastern and eastern parts have an extensive coastline along the Red Sea, strategically located along the Maritime Silk Road. 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 deposit is located in the Danakil depression region of Eritrea, about 75km away from the Red Sea coast and 177km south-east of Asmara, the capital city (with a population of 960,000 people). The removal of Eritrea from the sanction list opened up the country for foreign investments, thus significantly reducing geopolitical risk. Proudly Researched by: Melanie Miles. The cost curve of SOP production as of 2018, from the same source as Fig. 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. My References:Danakali Ltd:https://www.danakali.com.au/ Interested in supporting this channel: Paypal: PayPal . Members of The Natural Resources Hub get exclusive ideas and guidance to navigate any climate. In 2019, the country received only $67.1m in foreign direct investment (FDI) inflows against $61m in 2018, according to the World Bank. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address. 4 0 obj 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. Danakali is developing the tier-1 Colluli potash project, Eritrea, which boasts the world's lowest costs and >200 years of mine life. 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. However, China has set its sights on the country and perhaps it will receive large amounts of Chinese FDI in the future. One-third of the country's GDP is made up of remittances sent home by Eritreans living in Europe and other developed countries. The border lands mostly arable are unusable for farming purposes, because of unexploded land mines left over from the war of independence. 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. 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). For the area a high-temperature geothermal reservoir was identified in Alid with estimates of a potential heat of 250 to 300 degrees Celsius. 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). 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. 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 best energy and mining stock ideas with multibagger potential. The deposit is the only one in the world world where SOP can be made from an open-cut mine due to its extreme shallowness. It has had a border war with Ethiopia and a clash along the border with Djibouti. 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. In food production, potassium is removed from the soil in harvested crops and must be replaced in order to maintain future crop growth. The Colluli Potash Project is located within the Danakil region of Eritrea, approximately 177km south-east of the capital city Asmara. We use them to give you the best experience. The west really needs to let go of calling every developing nation that doesnt bend at its will oppressive. It also said that all vendor and contractor packages have now been received. Eritrea has historically struggled to attract large investments because of its unfavourable business climate. World potash demand has grown at an average rate of 2.5-3.0% per year since 2000 (Fig. Foreign investment in most business sectors is heavily restricted and state-owned enterprises distort its markets. To open fire on your own disabled [people] is pretty appalling.". #goog-gt-tt {display:none !important;} Danakali is just one of many deep-value natural resources ideas covered by Laurentian Research. The FEED economic estimates, from the same source as Fig. The agreement can be further extended by three years if mutually agreed upon. <> The front-end engineering and design (FEED) study for the project was completed in January 2018. RA, listed . (5) a community of investors to bounce off ideas and share information with. Under the current FEED study for Module 1 and 2, Danakali will be one of the lowest cost SOP producers and with the development of the loading facility at Anfile Bay costs will decrease further as transportation costs are reduced. 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 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. Discover how your business could benefit from a base in Masdar Citys economic free zone, download this free whitepaper. A number of unique characteristics make Colluli one of the world's largest and lowest-cost deposits of SOP. A United Nations report says that Eritrea's Danakali Colluli potash project has the potential to boost the economy of the country that was removed from the UN's sanctions list only two months ago. Open-cut solid salt mining beats underground solid salt mining, lacustrine brine, and playa brine in operating costs. 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. 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). 4. Over the next three decades, almost 95% of the population growth will occur in Africa, India, and South-East Asia. I wrote this article myself, and it expresses my own opinions. It also contains other fertilizer products, such as muriate of potash (MOP) and gypsum, along with rock salt. It also provides off-takers with additional confidence on Project certainty and fundability, supporting the finalisation of binding bankable offtake agreements. AFC also agreed for an additional 39m ($50m) of strategic equity investment in Danakali in December 2019. The company is yet to secure an additional US$52 million of capital. Eritrea's north-eastern and eastern parts have an extensive coastline along the Red Sea, strategically located along the Maritime Silk Road. These circumstances have resulted in it becoming one of the most isolated states in the world. But when [Afwerki] discovers that his authority is being questioned after independence, he begins reacting in the same way. Danakali Lmited is selling share to China. Fig. 3 0 obj It has a geographic area of 117,600km2, making it slightly larger than Bulgaria. Please disable your ad-blocker and refresh. As a tier-1 potash deposit with a number of unique advantages to its favor, the fully-permitted Colluli carries little underground geological risk. 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. The construction works for the Colluli potash mine are expected to be started in 2021 with the start of production expected in 2022. Plus500. By. Therefore, the Eritrean government has a strong incentive to see the project be built, in production, and run successfully. 5). 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. GDP dropped by -0.6% in 2020 in the wake of the Covid-19 pandemic and a locust invasion. 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. Last Updated on: 01 December 2022. 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. 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 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. Invest in t. 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. 11). The United Nations Development Programme (UNDP) has indicated Colluli has the potential to significantly boost the Eritrean economy and have a substantial positive impact on the Sustainable Development Agenda of Eritrea. Colluli has significant multi-commodity potential presenting major additional value upside. 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 November 2020, a conflict broke out in the mountainous region of Ethiopia, called Tigray, between Tigrayan forces and the Ethiopian federal troops. Is this happening to you frequently? Shallowest known evaporite deposit globally. 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. 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? Profit was boosted by higher metal grades and prices. 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. 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). 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. 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. Fig. This article lost credibility in characterizing the country of Eritrea as most oppressive regime. Eritrea had been under UN sanction per Security Council Resolution 1907 since December 23, 2009, for the government's role in aiding Al-Shabaab in Somalia and refusing to withdraw troops from its disputed border with Djibouti following a conflict in 2008. 1. The Colluli resource contains kainitite, sylvinite and carnallitite ores. 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 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. Fig. 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 Australian company Danakali is developing the Colluli potash project in Eritrea and expects to bring it into production in 2022. 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. Please. Notify me of follow-up comments by email. It nosedived again in 2017, this time by -10%, before jumping by 13% in 2018.

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