We would love to hear your thoughts about our site and services, please take our survey here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
J. a few points...
"Clearly they would prefer full ownership & sole control - which is on offer here" ..is it??? Err, at least not publicly.
Glencore were the majority controlling partner for the vast majority of ZIOC's time, yes "option value", that stands (cannot simply be shrugged off as 'throwaway'). When they incorporated into the company very recently, even then the unpalatable strings were attached of "marketing rights". Plain to see where the big obstacle was and is, imo.
Agree to disagree. Anyway, that is all history, I am supremely confident in this going forward..
ATG. Calling it option value (actually I believe for way less than a decade, a throwaway comment by Glasenberg) doesn't imply they were responsible for deals not occurring, it equally could have been Elphick (having not sold out at 156-222p) having his sights on a valuation above what any potential strategic investors were prepared to pay.
This project remains a perfect fit for the Chinese - already responsible for power & the entire project EPC & taking the financial risks for both. In various remarks on Simandou I have noted Chinese complaints about the extent of their equity interest/offtake vs their financial risk & having to accept joint management of the project with RTZ. Clearly they would prefer full ownership & sole control - which is on offer here (unlike Simandou). Tactically a potential buyer would ideally want to deal ahead of the public release of an FS (when it would potentially draw in other bidders) so I also view the next couple of weeks as extremely interesting - external events aside.
J. Fact is, Glencore called this "option value" for well over a decade. Agree to disagree 🙂
ATG. Actually we dont know where the delays in this 13+ year process have occurred - it could be Glencore, it could be Elphick - most likely its both. But Elphick is Chairman & has the main executive responsibility for this project, it is a minor matter for Glencore. We know there was interest by a Chinese consortium & by the Japanese in the last 5-6 years, but nothing happened.
I share the positive hopes regarding April but we need a deal ASAP before external events intercede. Elphick/Glencore can tailor their demands to get this over the line - between them they control price, structure, offtake. What they cant do & what concerns me most, is they are powerless to stop big external issues - a ME war, a collapse of the iron ore price or a coup/civil war in the Congo - all of which could permanently derail any deal again.
Fingers crossed that ZIOc stick to their word and actually make the FS public before the end of the month
Indeed Marcus, small top up for me come Monday. I can only see the SP strengthen going into next week as we near the FS reveal and strategic investors.
12 working days to updated FS and potential news on Strategic Investor(s). It could come any day!!
This goes up next week, end of.
To be repetitive. To be fair it is not Elphick where the delays over time lie, Glencore has always called the shots. We accept whatever Glencore accepts. Plus there are plenty of other stranded African iron ore projects out there, Zanga is not unusual.
Since October the possibility of an escalation to the conflict outside of Gaza has always existed. The danger to us is the possibility of devastating attacks on the Saudi oil pipeline & refining infrastructure (as Iran undertook as recently as 2019 on Abqaiq & Khurais ) and/or the Gulf States. Likewise an Iranian blockade at Hormuz & accentuated Houthi attacks in the Red Sea could severely damage global oil supplies & the world economy. Directly or indirectly both our likely strategic investors (Saudi, China) could be affected by a major escalation by Iran.
At 3.00 am UK time it seems the vast majority of Iranian drones were intercepted outside of Israel & caused little damage in Israel. Crucially substantial numbers were taken out by allies - US, Jordan & UK - which gives all of them some influence on the nature of the counter attack. The key here is whether the Israeli counter attacks focuses on 'traditional' military targets like missile & military bases or whether they specifically target the vast Iranian nuclear infrastructure. This has been a longstanding target of the Israelis (& Netanyahu in particular, twice having attack authorisation refused by the key cabinet security/defense committee) & an attack on it would send the Iranians literally 'ballistic' - they would attack on all fronts.
My biggest irritation with Elphick & his various negotiating ploys is he often appears to have little regard for time, acting as if we have 'all the time in the world' when in fact we clearly dont on all fronts. This was why I was so relieved when he finally announced an end Q1 date for a strategic investor & so disappointed when he failed to meet that target & didnt announce a new target date. The situation in the Congo, as ably recorded by Extrader, is also deteriorating ahead of the Nguesso succession - their last vicious civil war ended only 25 years ago. If there is any deal out there we need to get signatures on contracts, essentially regardless of price & conditions - we get what we get.
.."The natives are getting restless..."
This won't help matters.
I think the situation just got more complicated ;-<
https://www.icij.org/investigations/pandora-papers/us-prosecutors-push-to-seize-apartment-tied-to-congolese-president-in-luxury-trump-complex
The US Gov filing 29 March is a civil asset forfeiture case against Big Den, with details.
Timing is 'unhelpful' - to say the least - and seems particularly a complicating factor for GLEN, who's working hard on clearing up historic issues on the ethics compliance front.
The 'reputational risk' stakes have got higher, which may impact GLEN's overall priorities in any deal and/or the structure of the transaction, AFAICS.
OTOH, this (or the likelihood/possibility of something similar) will have been a 'known unknown' for some time and a contingency that's hopefully already been factored in. The approach to handling of any 'news' will be interesting, to say the least....
'Dum spiro, spero'
GLA
Unfortunately you have to pay and subscribe which I am not willing to do. Project is 200m plus, they have details of parties involved. Other than that, cannot see too much...
Care to summarise?
Log in or subscribe required for lesser mortals.
Https://www.l2b.co.za/Project/Zanaga-Iron-Ore-Project-Congo/8761
This is interesting.
Speaking of taxes, C-B seems to be having trouble raising any...
From BrazzaNews last week there was a report about the preventive detention and fine of the head of customs, for alleged forgery of documents and misappropriation of funds.
Today sees :
..." 1000 billion FCFA in revenue in 2024, this is the objective set for the Congo tax services under the leadership of DG Ludovic Itoua. A real cover-up, his place is in prison. Sassou must stop running this country like a family grocery store. #Chezmoiaucongo.."
.."Why does Congolese customs only mobilize 100 billion FCFA per year, while Benin's customs revenue amounts to 700 billion FCFA / year? Where does the Customs money go? A real mafia in an organized gang. #Chezmoiaucongo..."
.."How incredible is that??? Senegal makes 1500 billion per year. There really is something fishy going on. Having lived in the Congo and importing food to Brazza, I find this strange!!!.."
The natives are getting restless.
GLA
Not been out of this over the weekend for 12 long years! Still think the SP is indicating LTHs are going to be very disappointed! Veteran10's 60p may well be optimistic - I suspect most of the value will be trousered by whoever gets away with a low offer which is accepted by GLEN and Elphick as majority shareholders. Except they won't have it that easy as other offers suddenly materialise and money talks!
I won’t be going anywhere Driving
2weeks+2 days until costings updates, and hopefully MOU’s with port + strategic partners..
Volume picking up.
Really wouldn’t want to be out of this weekend!
Gla.
I reckon MK@zanagairon.com is the elusive CEO's email...Worth a try perhaps.
0777 close your PC and take a look end month and read the cost update, and for myself I hope I will be happier than today
It is the overwhelming agony some marathon runners experience when they can finally see the finish line, they collapse within meters of the line but crawl over to finish..
Trying to be patient but this is becoming extremely difficult
Ukraine estimates min $500-800bn needed for rebuild, and it's safe to say that will double. Rough estimate of steel needed to support the effort is 3.5 million metric ton. This is expected to drive steel and all supporting commodity costs significantly.
I guess plenty of steel producers will be looking for iron “shovel ready” projects to ramp up production.
Gla.
MM has offered a prediction of 300p at that stage. I have a conservative 60p but would obviously hope for more.
Totally agree -