Andrada Mining acquisition elevates the miner to emerging mid-tier status. Watch the video here.
Well, well - What do we have here?
PSEI are very likely to be our EPC on beneficiation and pipelines. They were named checked in the BFS in 2014 and image searches match their PR with ZIOC's latest presentation. Hidden on their website are details of 2 Congolese projects, Zanaga and another with a slurry pipe some 100kms shorter. That can *ONLY* be Mayoko:
FROM MAY 2018:
PSEI IS CURRENTLY WORKING ON THE FOLLOWING SLURRY PIPELINE PROJECTS (FEASIBILITY STUDY, BASIC DESIGN AND DETAILED DESIGN, CONSTRUCTION MANAGEMENT, START-UP AND COMMISSIONING) - (AMONGST MANY):
> Congo Resources Inc., Iron Ore Project, Republic of Congo - Feasibility study for the entire project, including mining, beneficiation, pipeline transportation (250Km long and 20 MTA), harbor and hydropower stations.
> Glengore’s Zanaga Iron Ore Project, Republic of Congo – Bankable Feasibility Study for the pipeline transportation (350Km long and 30 MTA)
https://psei.co/wp-content/uploads/2018/05/PSEI2018_SOQ.pdf
SEPT 2022
In 2022 ZIOC revealed the following:
> Significant engagement underway with other mining project developers in RoC to explore potential collaboration opportunities, especially in relation to logistics solutions and alternatives for upgrades to existing infrastructure
https://www.lse.co.uk/rns/ZIOC/interim-results-5ifwptotddk9sle.html
>> Given the 2 statements, and logically, ZIOC's 'Significant engagement underway with other mining project developers in RoC' must be Mayoko, and the ' collaboration opportunities' likely encompass the full spectrum of services that PSEI detail for 'Congolese Resources'.
>> Hugely significant if, as we suspect, Mayoko is owned by Nguesso interests, and are now being chaperoned by ZIOC's development capabilities.
Me too, 99icecream.
Exploiting the copious natural gas coming ashore at Pointe Noire makes sense for pellet production. Why ship pellet feed (Zanaga's high grade) *AND* natural gas half way round the world to China when you can produce the finished product and then ship - plus it would open up the European and Middle Eastern markets for Baowu.
Now the scramble will be to do something similar in the ME, or perhaps PN still, and then ship the low-carbon product into Europe and duck underneath the looming carbon taxes.
It all fits nicely.
Of note and topically is that Big D opened ENI's new LNG facility at Pointe Noire just yesterday...
Ah - that is very interesting, Guffers, Thank You. What happened to COIDIC, and when, was a mystery and that fills in the blank very nicely.
Baowu could and should be a much more useful partner and, I reckon, will be part of the strategic investor deal to be announced before the end of this quarter.
Well, this is very interesting, with all sorts on implications and rabbit holes. I'm not sure I recall reading about Baowu's interest in Pointe Noire:
(translated)
TECHNICAL MEETING OF SEPTEMBER 10, 2021 BY VIDEO CONFERENCE.
The working session was led by Mr. Frédéric MANIENZE, Director of Cabinet of the Minister of SEZ and Economic Diversification.
A technical meeting was held this Friday, Sept 10, 2021 in the meeting room of the Ministry of SEZ and Economic Diversification between the Congolese party composed of executives from the Ministry of SEZ and Economic Diversification, assisted by the representative of the ministry in charge of territorial planning, two representatives of the ministry in charge of finance, a representative of the ministry of hydrocarbons, the outgoing ambassador of the Republic of Congo to China, the new ambassador of Congo to China and the Chinese party composed of representatives of Cad fund and the General Director of the China Baowu Company with his team.
The meeting focused mainly on the redefinition of the position of CAD Fund regarding its commitment to the development of area A of the SEZ of Pointe-Noire, in particular the position of COIDIC mandated by it for this purpose and the presentation of the China Baowu Company (its identity and ambitions for the Republic of Congo).
https://www.facebook.com/zes.gouv.cg/posts/reunion-technique-du-10-septembre-2021-par-visio-conf%25C3%25A9rencela-s%25C3%25A9ance-de-travail-/3035117346773526/
> If I am reading this correctly, Baowu's interest in Pointe Noire *must* have been in constructing a steel mill - (given that ZIOC had scoped out all the land necessary for iron ore dewatering and then landslide activities for the port).
> This implies that Baowu must know all about Zanaga and the efforts to develop.
> The meeting was a teleconference (in the middle of COVID insanity). AT revealed in late 2022 that engagement had restarted with Chinese entities who had been prevented from travelling outside of China.
>> There is one other possibility - that Baowu were working on development at Mayoko, and this meeting was in some way parallel to Zanaga possibilities/optionalities. In which case, recall this from ZIOC in September 2022:
'Significant engagement underway with other mining project developers in RoC to explore potential collaboration opportunities, especially in relation to logistics solutions and alternatives for upgrades to existing infrastructure.'
>> In the meantime Baowu and Chinalco are currently delaying their F.I.D.s on Simandou until 'hopefully in March', according to Rio's CEO.
Hmmmmm
From Africa Intelligence this morning ($12.50)
The UK-Australian giant has been busy selecting subcontractors and discussing the sale price of iron with its Chinese buyers as it awaits its partner Chinalco's financial commitment to the project, hopefully in March. Rio Tinto has also been in talks with the Guinean junta.
https://www.africaintelligence.com/west-africa/2024/02/26/rio-tinto-puts-finishing-touches-to-simandou-mining-project,110184137-art
4 parallels of note:
1. 'The UK-Australian giant has been busy selecting subcontractors...'
> Exactly what Marty is currently doing,
2. '...and discussing the sale price of iron with its Chinese buyers ...'
> This is ZIOC's '...market enquiry and financial modelling phase 2...' from The 28th Dec RNS,
3. '...it awaits its partner Chinalco's financial commitment to the project...'
> Chinalco are dragging their feet, ostensibly waiting on Beijing to sign off their Simandou investment. Chinalco own 15% of Rio and so already have some exposure to Simandou.
>> They do have an alternative. Zanaga.
4. '...hopefully in March.'
> Clifford Elphick, ZIOC's CEO, September 2023: 'Following the acquisition of full ownership and control of the Zanaga Project we are now engaging with strategic entities interested in participating in the Zanaga Project, and intend on securing a selected partner by the end of Q1 2024".'
>> Uncanny, huh?!!
That rate of growth, +50,000%, would see today's 7.82p turn into £39....
Or perhaps again with high grade iron ore.......
IRON ORE BOOM OF THE 2000S REPEATING – THIS TIME WITH CRITICAL METALS
A headline published in The Age back in July 2003 reads: “[Andrew] Forrest has a grand $1.2bn plan for tiny Perth mining company.”
That company was called Allied Mining and Processing and you’ve probably never heard of it. But from small roots this tiny outfit grew into one of Australia’s largest listed companies with a market cap exceeding A$88 billion.
Twenty years ago, Andrew (Twiggy) Forrest renamed this micro-cap stock to Fortescue Metals Group (ASX: FMG). The rest is history, but it was quite the story behind Twiggy’s road to immense wealth.
Fortescue was perhaps the single biggest success story from the last mining boom. A stock that grew from a measly A2¢ per share back in 2003 to more than $10 a share just five years later.
It seems absurd, but that’s around a 50,000% return.
Junior iron ore miners were the poster child from the early 2000s China-led commodity rush.
https://www.mining.com/iron-ore-boom-of-the-2000s-repeating-this-time-with-critical-metals/
Elliott Management is setting up a company to invest at least $1bn to buy mining assets globally, as it seeks to take advantage of the depressed valuation of groups operating in the sector, people familiar with the matter said.
The New York investment firm’s new venture, Hyperion, will be led by Sandeep Biswas, the former chief executive of gold mining group Newcrest Mining and a veteran dealmaker and operator in the sector, those people added.
The mandate is to buy across all assets, including base metals and precious metals in addition to commodities in demand for electric vehicle production. Elliott’s move comes when metal prices have pulled back because of macroeconomic weakness but are expected to rise rapidly on a surge in demand, particularly for electric vehicle batteries, renewable energy and power grids, as supply struggles to keep pace. However, valuations of mining companies have been hit by investor concerns over environmental, social and governance risks as well as geopolitical volatility and the boom-bust nature of commodity markets, leading institutional shareholders to reduce their exposure to the sector.
Elliott, headed by Paul Singer, joins a nascent wave of private equity groups such as Orion Resource Finance and Appian Capital that focus on mining, as they attempt to provide capital to a sector that needs to spend trillions of dollars to meet surging global demand for metals.
Sovereign wealth has also emerged as a force of capital to help the sector boost the supply of minerals needed for the energy transition and push up valuations, most notably Saudi Arabia’s establishment of the Manara Minerals joint venture last year.
https://www.ft.com/content/6430d8db-a9cb-45cb-8ce9-5686a462152a
It's no contest with Zanaga. Simandou doesn't make the DRI-grade.
Yesterday, in Rio's Annual Report, they were obliged to declare Simandou's grades:
SIMANDOU - ORE RESERVES
Simandou Ore Reserves referenced on slide 54 are based on the Ore Reserves as reported in Rio Tinto’s 2023 Annual Report released to the Australian Securities Exchange (ASX) on 21 February 2023 and available at http://riotinto.com.
The Simandou Ore Reserves comprise 0.3 Bt @ 66.4% Fe of Proved Ore Reserves and 1.2 Bt @ 65.0% Fe of Probable Ore Reserves.
The Competent Person responsible for the information in the 2023 Annual Report that relates to Simandou Ore Reserves is Michael Apfel, who is a Member of the Australasian Institute of Mining and Metallurgy (MAusIMM).
https://www.riotinto.com/en/invest/reports/annual-report
In all likelihood Rio will have to use Simandou's 65% to blend up their Pilbara junk (which has fallen to a 61.4% average) in order to maintain the benchmark 62% Pilbara Blend.
> All of which means that there's no new supply for DRI and green steel
>> Zanaga is set to produce 66% in Stage 1, and 69%+ in Stage 2 for a blended average of 67.5%.
...many developments are bubbling, if you know where to look.
Rio Tinto CEO Jakob Stausholm announced on Wednesday that the company’s board has given the green light to the Simandou mining project in West Africa.
Stausholm told the Financial Times that the company aims to commence iron ore production from the $20 billion development as early as 2025.
Sign Up for the Iron Ore Digest
Rio Tinto plans to invest $6.2 billion in the mine, rail, and port project in the Republic of Guinea, in collaboration with other companies, including five from China.
“The board yesterday approved the largest mining project in the world,” Stausholm informed the Financial Times.
HOWEVER, FINAL INVESTMENT APPROVAL FROM RIO’S STATE-OWNED CHINESE PARTNERS, INCLUDING CHINALCO AND BAOWU, IS STILL PENDING. Nonetheless, Stausholm expressed confidence that this approval would be granted soon.
In January, Baowu raised $1.4 billion from a bond issue in China intended to support the project, said Rio’s CEO.
https://www.mining.com/rio-tintos-board-gives-green-light-to-simandou/
Lula has already detailed how Brazil's 'reconquest' of Africa (after the ill-fated Vale/Simandou escapade that was both a company and national endeavour) will go via N'Guesso. The major synergies are the rainforests and iron ore deposits...
This from June just gone.
June 2023: Pour Lula, la reconquête de l’Afrique passe par Sassou Nguesso
https://www.jeuneafrique.com/1457305/politique/pour-lula-la-reconquete-de-lafrique-passe-par-sassou-nguesso/
8.35p, +10%
No news but does someone know something?
I have had some email correspondence with the IEEFA authors and they are well aware of Zanaga and its potential.
The sole issue at present is that it remains 'potential' until the point of hard development news....the potential of which they are also cognisant. The moment we have our strategic partner revealed then the media coverage will begin, and we will be mentioned in the same breath as Simandou.
Well, I didn't appreciate this. While Rio's execs are calling Simandou's ore 'caviar' in fact it's more lumpfish roe:
Blocks 3 and 4 are 65.5% FE, whilst Blocks 1 and 2 are just 63.5%, as per Portergeo below.
The IEEFA then comment that Simandou is good for 'early stage steel decarbonisation' but it's essentially just for the blast furnaces.
Published Mineral Resources for Simandou South (Blocks 3 and 4 which include Pic de Fon and Ouéléba) at 31 December, 2019 (Rio Tinto Annual Report, 2019) were: Measured + Indicated + Inferred Mineral Resource: 2.757 Gt @ 65.5% Fe
Simandou North, Blocks 1 and 2 with resources additional to those quoted above was held as of January 2020, by The Société Minière de Boké-Winning (SMB-Winning) consortium. Blocks 1 and 2 are estimated to contain an additional ~2 Gt @ 63.5% Fe.
https://portergeo.com.au/database/mineinfo.asp?mineid=mn1247
IRON ORE QUALITY A POTENTIAL HEADWIND TO GREEN STEELMAKING
However, although some of Simandou output would be suitable for DRI – “the vast majority would only make the cut as premium BF-grade feed”. (50 Fastmarkets. Understanding the high-grade iron ore market. March 2021.)
This would meanthat Simandou would mostly assist early-stage steel industry decarbonisation efforts (blast furnace optimisation) rather than later-stage zero-carbon steelmaking.
https://ieefa.org/sites/default/files/2022-06/Iron%20Ore%20Quality%20a%20Potential%20Headwind%20to%20Green%20Steelmaking_June%202022.pdf
Ticking higher on larger volume yet with no apparent news.
When have we seen that before?
Oh my! - he's done it again.
RACE TO GREEN STEEL: NEW CAMPAIGN URGES CARMAKERS TO SWITCH TO LOW CARBON STEEL
https://www.businessgreen.com/news/4173735/race-green-steel-campaign-urges-carmakers-switch-low-carbon-steel
Automotive makers and other industrialists agree to 20-30% green steel premium from H2GS
https://pemedianetwork.com/hydrogen-economist/articles/strategies-trends/2024/h2-green-steel-banks-30-premium/
and the stick:
POTENTIAL FOR $102 TO $190 PER TON TAX CHARGES ON INDIAN STEEL EXPORTS TO EUROPE, SAYS GOLDMAN SACHS.
Steel producers in India are most at risk from Europe’s new carbon tax on imports due to their high sales to the region and mills’ elevated emissions intensity, according to Goldman Sachs Group Inc.
https://www.hindustantimes.com/business/indian-steel-exports-at-high-risk-from-europes-new-carbon-tax-goldman-sachs-101707903529718-amp.html
Consider this. As I type:
HE1 MCap of £64m
EEE MCap of £60m
but
ZIOC MCap of £44m
Only 1 has a JORC Resource, ZIOC at 6.9bn tonnes of in-ground, high grade worth $350bn+ at steel mills.
....and ZIOC's ultimate Resource could be several times that size.
It's frustrating, V10, that's for sure.
However there are some very interesting developments in the background and some eye-opening tell tales to be found.
From these I reckon we get big news within the next couple of weeks, incl. the port MoU.