Dehai News

(The Financial Times) Eritrean potash deposit company readies London listing

Posted by: Semere Asmelash

Date: Thursday, 12 July 2018

Eritrean potash deposit company readies London listing


Neil Hume, Natural Resources Editor   July 12 , 2018


A company developing a large potash deposit in Eritrea has announced plans to list in the UK, testing the appetite of investors for ‘greenfield’ mining projects in Africa.

Danakali Limited said joining the London Stock Exchange would help it raise the cash it needs to fund development of the Colluli deposit.

Analysts at Numis reckon Danakali, which is currently listed in Australia, needs to raise around $300m of debt and equity to develop the first phase of the project.

“The LSE listing provides us with additional access to sophisticated investors in London and internationally with a strong appetite for advance stage development projects and a good understanding of African mining and resource environment,” said Danakali’s executive chairman Seamus Cornelius.

In the initial phase of operation, Colluli should produce more than 470,000 tonnes a year of sulphate of potash (SOP), a premium grade of fertiliser that can be used on high value fruit, nuts and teas. Output could rise to almost 950,000 tonnes if the company decides to go ahead with a second phase of development.

Colluli is being developed as a joint venture with the Eritrea’s state mining company and Danakali has already struck an ‘offtake’ agreement with EuroChem, one of the world’s biggest fertiliser companies. Under the 10-year deal, EuroChem has agreed to buy at least 87 per cent of Colluli’s output from the first phase of development.

SOP currently trades at a premium $260 a tonne over the more widely available muriate of potash (MOP), which is used on grains.

“As a straightforward open pit . . . Colluli has low associated technical risk,” analysts at Numis wrote in a report published this week. “The deposit is also located only 230km from the Red Sea port of Massawa.”

Danakali, which expects to list later this month, joins a growing number of fertiliser companies trading in London, including Sirius Minerals, which is developing a large deposit under a national park in Yorkshire, and Congo-based Kore Potash.

Numis is acting as financial adviser to Danakali’s listing.




Dm eri tv subscribe

ERi-TV, Eritrea: Hamid Idris Awate's story - book released at Festival Eritrea Expo

Hamid idris awate book release

Hdri Media Books on Amazon.com
visit hdrimedia.com