Member Info for extrader

.."

Europe can still avoid the coming green steel crunch...

https://www.ft.com/content/ffaae533-b555-4a40-8b77-d0dda278b874

.."Building DRI facilities is not sufficient. Running these requires green hydrogen, made using renewable power. In much of Europe, that will be expensive. 

For an idea of the cost, consider that a 2mn-tonne DRI plant will need perhaps 6 terawatt hours (TWh) of electricity a year. At an all-in cost of €80/MWh, that’s a €480mn power bill. The same mill built in a green electricity sweet spot, where costs are perhaps €30/MWh, would save €300mn. 

Such economics are available in some European locations and help explain how H2 Green Steel — a greenfield project positioned near low-cost Swedish hydropower — secured €4bn in financing last week. 

But traditional steel plants usually don’t have the fortune of co-location with cheap renewables. That leaves them exposed to competition from enterprising newcomers. 

Moving clean energy around is an oft-touted solution. BUT STEELMAKERS MIGHT ALSO WISH TO RETHINK THEIR INPUTS. REDUCE IRON ORE WHERE GREEN POWER IS CHEAP, AND THEN SHIP THIS TO STEEL MILLS.

In an era of snarled-up supply chains and reshoring, this may not appeal to all. But it could preserve steelmaking capabilities in Europe. This could protect perhaps two-thirds of the labour force of a traditional plant, according to the Rocky Mountains Institute. And, in a crunch, creative solutions should not be ruled out...."

Blindingly obvious solution, I'd have thought!

GLA

Hi Jiving,

Point taken re delay.

I wasn't a shareholder at the time, but understand that this was a 'news-rich' period, with a referendum held Oct 2015 to seek approval for Constitutional changes (incl allowing DSN to serve another term(s); a 'questionable' election which he won in 2016; and a possibly-related insurrection (?) by 'ninja's '(?) in the sensitive Pool district (between Brazzaville and PN.

It may also coincide with the fall-out with the IMF, consequent upon Country Manager shenanigans and some question-marks over some SNPC/Coraf oil pre-finance deals (not GLEN, AFAIAA).

With hindsight - and the subsequent history of iron-ore prices (at or lower through to 2020) - maybe the delay was a blessing in disguise....!

ATB

I can't see BigDen - now in his 80's - holding up proceedings for a couple of years, whilst his poodle Council deliberated over a modification to the Mining Convention....

Just IMO.

Jared Dilian blowing his own trumpet, but could be reflecting the Davos bankers' optimism...

He's bombastic but frequently right tho'/because contrarian, which IMO is better than the alternative.....

.."Argentina! Have no idea what is going on. I’ve been traveling.

[Bloomberg chart of GGAL Grupo Financiero Galicia S.A]

Great googly moogly. YPF looks similar.

Go Milei.

Don’t look at it. Don’t look at it for 5 years.

Saw an interesting chart which I could not share. It was a chart of stock market capitalization to GDP, country by country. The United States is at 170%.

Argentina is at 9%. The mean is 100%.

If Argentina goes to the mean, it’s a 10-bagger. I am not making this up. Do

you have enough?

Remember when I told you after the election that the trade was just beginning? It is just beginning. I had some crazy Austrian tell me that in a central bank-free world, that stocks would go down.

Maybe that is true in the United States, but not in Argentina, where they are deregulating like they are going to the electric chair.

This remains one of the best calls in the history of TDD. We were before EVERYONE in calling Milei. And we didn’t bail when the polls went pearshaped. I had the confidence that the people of Argentina had had enough and that they were willing to do something radical to get themselves out of the hole. And they did it. And it continues to pay off, and it will pay off for years.

I think if you were to put on a spread trade and buy Argentina and sell the U.S., the two extremes of the market cap to GDP ratio, you would be pretty happy in 10 years. And that is essentially what we are doing.

The U.S. is corrupt and bloated, and this grandiose, malignant homeowners association that we have is going to do us all in.

Buy a place in Recoleta...."

Ed.: hxxps://www.gringoinbuenosaires.com/neighborhood-guides/recoleta/

NAI, DYOR, GLA etc etc

Under the heading ' Global business elite infatuated with Milei', here's the FT Davos take :

.."WEF participants, whom the economics professor labelled the “heroes” of the capitalist world, had been “co-opted” by neo-Marxists, radical feminists and climate activists, he warned.

The address drew substantial applause, with one European private equity veteran confided in being “impressed”, while a fund manager insisted that beneath Milei’s provocative veneer lay “some truths”. The Davos elite had been lectured about losing its way and had loved it.

It was not just Milei’s staunchly pro-business stance that struck a chord. “People are intrigued because he managed to get elected on an austerity platform, by telling voters he would cut their benefits and state subsidies,” said one WEF attendee.

The warm reception echoed positive comments from the IMF, a big creditor to Argentina. The Washington-based institution agreed to disburse funds after the Milei administration sought to slash the deficit and devalued the peso. The new administration “has moved boldly to correct several of the misalignments that are there in the economy”, the IMF’s deputy managing director Gita Gopinath said in Davos.

JPMorgan’s number two Daniel Pinto, an Argentine and WEF regular, was also bullish. Milei’s administration was “addressing all the right things in the economy”, he said, hoping that the measures could bring “an end to 80 years of economic deterioration”.

Others speculated that some of the praise might be part of a cynical move for a share of Milei’s planned privatisations of dozens of state-owned companies. “I’ve been surprised by how positive some bankers are about Milei’s ‘economic theories’,” said Allianz chief economist Ludovic Subran after the speech. “I am wondering if it’s not pure vested interests — the smell of a big privatisation wave coming and its investment banking mandates.”

But, perhaps naively, many found comfort in the belief that Milei’s most radical ideas would be tempered by a grown-up team around him. A private meeting between CEOs and foreign minister Diana Mondino, chief of staff Nicolás Posse and economy minister Luis Caputo made a good impression, according to one executive in attendance. “They came across as professionals,” he said.

Sure enough, back home from the Swiss Alps, the Argentine president was forced to make concessions on his sweeping reform bill currently being debated in congress, in which Milei’s party holds a minority of seats. The privatisation of state-owned oil major YPF no longer features in it — a sign that the libertarian politician might have to compromise with the neo-Marxist forces he was so quick to decry in Davos..."

Exclusion of YPF from Milei's programme doesn't mean that it's not still part of BUR's, though ;->

ATB

Hi Jiving,

The dam disaster (and human, reputational and financial impacts) must weigh on all co's involved, esp in 'home country' Brazil : you've got to imagine that there'll be some pushback on any project that is - or might be - a repeat risk.

Our presumed collaborator PSEI, with its dry beneficiation offering, may be the answer.

As to GLEN's possible interest in iron ore offtake, that was in the days of the blessed Ivan, of course, who wanted the product but was squeamish about how to get it (greenfield projects), which means/meant any 'green ore' project.

I like what I understand GLE's current strategy to be, of mixing the unfashionable cash cows of 'old' mining - coal - with the sexy-but-newish 'green metas - effectively backing a more measured transition than the enthusiasts/idealists would advocate.

So I hope that - whatever the eventual outcome - GLEN retains an interest in ZIOC offtake.

PS Thanks for the reminder re C-B royalty entitlement of 3 %. If that's any indication of what GLEN could hope to recover, the Royalty 'consolation prize' would be worth a pretty penny, esp @ 60mtpa..

ATB and GLA

Hi Savvy006,

I'm not going to waste much time on this, as you seem incorrigible.

.."Loan shares valued at 50m August 2020 before being sold down.."

From the 29 Jul 2020 RNS, shares transferred and value :

- 1,615,253,000 SYME shares transferred to High West Capital Partners LLC

@ 0.075p = £1,211, 440

- 778,571,429 SYME shares transferred to Stock Loan Solutions LLC

@ 0.09p = £700,714

- 3,500,000,000 SYME shares transferred to Union Pacific Capital Ltd

@ 0.07617p = £2,665,950

= £ 4,578, 104.

That was the valuation for security purposes, IIRC the illustrative shrinkage/security margin quoted was around 30%, so these pledges will have raised about £ 3m for 1AF2/TAG at the time.

This must be a contender (in a wide field) for the worst deal AZ has ever struck, from a common shareholder p.ov. at least.

HTH

Hi StarBright,

Well, contractually the host Govt has a 10% free carry.

If at topco, I can't believe anyone would agree to Board representation, for commercial confidentiality reasons.

No doubt, everyone will be 'encouraged' to have a local partner...and goods and services may have to go through preferred/short-listed suppliers.

As to anything else, the Asperbras history is a pointer.

IMO

Hi Mitch984,

GLEN have 100% of offtake rights over minelife, but surely (a) this is 'under existing structure' and (b) there is a fall-back/consolation prize ( m(ii) - Royalty) for GLEN if this is overturned.

The reference from the Marketing Agreement below is to a 'New Buyer' taking 100% of MPD, but if you think of it in terms of 'New Buyer' being a consortium : Manara its '(voluntarily?) capped 20%; other Gulfies; Vale; the Chinese (incl EPC Partner?), there's a bit of room for creative compromise, IMO on shareholding vs %age offtake on the one hand; and - in any event- GLEN has the 'option' /silver medal of settling for a Royalty agreement that may - in financial terms at least, if not strategic/commercial - give it most of what it seeks....

From the Marketing Agreement :

.."(m) If there is a direct or indirect change in ownership of MPD amounting to 50% + 1 share or more of the issued share capital of the relevant target entity, and, following such change in ownership, MPD notifies Glencore International in accordance with the terms of the Marketing Agreement that it wishes to cancel the Marketing Agreement and enter into a new life-of-mine marketing agreement (a "New Marketing Agreement") in respect of 100% of the production of the Mine with the relevant investor or its Affiliate (a "New Buyer"), then Glencore International may notify MPD, subject to the terms and requirements of the Marketing Agreement, that either:

(i) it shall match the terms of the New Marketing Agreement, in which event the parties shall discuss and agree in good faith such minimum amendments required to the Marketing Agreement to align with the key commercial terms agreed between MPD and the New Buyer under the New Marketing Agreement; or

(ii) it agrees to the termination of the Marketing Agreement, in which event the Marketing Agreement shall be terminated upon execution by MPD of the New Marketing Agreement and thereafter Glencore International shall be entitled, for the term of the New Marketing Agreement and / or any replacement or supplement to such agreement, to receive a fee in each calendar month by way of consideration for the initial marketing role played by Glencore International under the Marketing Agreement ("Royalty"), and

the Marketing Agreement shall be terminated only upon execution of the Royalty by Glencore International and MPD in a form acceptable to Glencore International acting reasonably..."

Only one thing is certain : The eventual outcome isn't going to be influenced by our musings and speculation, that's for sure !

ATB and GLA

Hi Driving,

Thanks for this!

.." unless China can find another massive deposit somewhere else, the 2 countries [China and Australia] will continue intertwined..."

Incidentally, the new 'mineral port' destination for Simandou ore is Morebeya, just along from conventional port Conakry, which is managed by AlBayrak Group, who are said to have signed a recent 25-year concession for the 'conventional port' at PN...with the question of who's to develop the new 'mineral port ' at PN (per Council of Ministers report), left unaddressed.

Lots going on behind the scenes, it would seem !

ATB and GLA.

Hi Jiving,

Sorry for not getting back sooner, I'm currently Stateside.

As it happens, I sent a 'chaser' to AT yesterday on both those (unanswered ) questions, also asking him re

(1) the Council of Ministers article re progression of Avima etc and reference to mineral port in C-B (where does AD Ports fit in, if at all?)

(2) Al Bayrak group report re 'conventional port' at PN (and ditto re AD Ports)

(3) 'legacy unanswered Q's' re (a) Simandou/Zanaga - which first to export? (b) Binding Solutions- any involvement (c) Three Basins - any extra 'environmental' issues ? (d) teaser reference to > 60mtpa - how advanced are the studies..?

As a general comment, I'll report back anything I learn, unless requested specifically not to.

I also don't put on the board some of the (publicly available) corruption stuff I've come across, because it might be taken as 'de-ramping' : it's certainly not suitable for anyone of a 'sensitive' disposition ;-<

ATB and GLA

And from Wiki (note link to Turkish ruling party):

.."Albayrak Group is a Turkish multinational conglomerate company based in Istanbul, Turkey. For the first three decades it was a construction company, but since 1982 it has expanded into other sectors, including transport and logistics, waste management, and media. It acquired the Yeni Şafak newspaper in 1997.

The group has been contracted by the government multiple times because of its close ties with AK Parti. It is also active internationally and has done construction of Lahore Metro Bus and is currently managing Mogadishu Port in Somalia and Conakry port in Guinea..."

Great find !

From the same link

.."Strategic Outlook

Albayrak Group sees this project as a starting point in the Republic of Congo and is gearing up to implement different projects in the future. One prominent project on the horizon is the rehabilitation of the railway between Pointe Noire and Brazzaville. If realized, this project will transform the Pointe Noire – Brazzaville route into a robust logistics corridor in the region..."

Apart from anything else, it would make PN a high quality logistics route for export of goods/minerals from DRC...there's nothing like eating someone else's lunch...;->

..and maybe here (C-B) as well...

From today's Depeches (report of Council of Ministers meeting 18 January) :

.."Communications

The Council of Ministers was then presented with two papers. The first paper, presented by Mr. Pierre, Minister of State, Minister of Mining Industries and Geology, related to the mission to Beijing (China) from December 27 to 29, 2023, as part of the project to build a rail link between Congo and Cameroon.

The construction of this infrastructure will make it possible to transport iron ore from the Badondo, Avima and Nabeba deposits to the port of Kribi in Cameroon.

The work will be carried out in two phases, the first towards Cameroon and the second consisting of the construction of a railroad from the Sangha to the port of Pointe-Noire, with the construction of a mineral port.

The total cost of the private investment expected from the companies involved is 4 billion US dollars.

The Council of Ministers welcomed this prospect and congratulated their Excellencies, Messrs Paul Biya, President of the Republic of Cameroon, and Denis Sassou N'Guesso, President of the Republic of Congo, for this spectacular illustration of the policy of cooperation between our two countries, a symbol of sub-regional integration..."

Thoughts : the Minister of Communications isn't communicating very clearly :

- if export is via Kribi, Cameroon, Congo involvement should be a rail-link up-country (Sangha) to the Cameroon border and onwards....

- what's the deal with rail in opposite direction, to PN and a 'mineral port' there? Are 2 x projects conflated?

- US$ 4 billion *seems a lorra, lorra money for the Chinese private sector (esp. as mine title is being litigated).

* ZIOC infrastructure will be a snip, by comparison.

Ho hum.

.."Argentina: On Friday, there were media reports that the government was close to securing the support of the three other parties in its incipient Congressional alliance to approve the Omnibus Law. According to Clarín, the government is supposedly pledging to lower duration of the delegation of emergency powers, reverse the 15% increase for export tax for regional economies, and modify the article of the retirement reform. Other newspapers speculate that YPF will be out of the privatisation list and that political reforms in the Omnibus bill will be postponed.

The Argentine government seems to be focusing on sweeping deregulation of the economy to undo decades of red tape, betting on the ability to implement further fiscal measures while attracting investments to the country. The good news for the Government is that, after appointing members from other parties – notably Macri’s Juntos por el Cambio – to its cabinet, Milei seems to understand the importance of negotiating its sweeping changes in Congress, increasing the likelihood of its reform programme to be successful.

The negotiation over the Omnibus bill may help the Emergency Decree with more than 300 rules which was issued on 20 December and is valid since the end of 2023 (except the labour chapter, which was successfully challenged in court).

The decree may still be voted down if both Congress and the Senate repeal it by the end of the month or if the Supreme Court rules it unconstitutional.

In economic news, the trade balance moved to a USD 1.0bn surplus in December after a USD 0.6bn deficit in November, as exports rose by USD 0.4bn to USD 5.3bn and imports declined by 1.2bn to USD 4.3bn."

'Steady as she goes'.

GLA

See p 13 of last presentation :

- ZIOC alumina @ Stage 2 (0.4%) is 1/3rd of Vale's IOCJ 1.4%, 1/6th of Pilbara/Newam 2.3-2.4%...

- ZIOC silica @ 3.0% above Vale's IOCJ (1.4%), but below Pilbara/Newman 3.7-4.3%...

-ZIOC phosphorus @ 0.04% less than half Vale's, Pilbara/Newman's 0.08 > 0.1%...

AFAICS

reiterates the case for zioc :

.."dr quality

the direct reduction route is more sensitive to iron ore quality and market-based iron ore pellet supply will be crucial, according to the international iron metallics association.

the iima forecasts a gap in 2033 of around 34 million mt in dr-grade iron ore pellets factoring in demand growth from global dri plants, in a november presentation. even with some lower quality blast furnace pellets being used for dri, the iima estimates a remaining gap of 18 million mt—equivalent to around 12 million mt/year of dri capacity or 5 dri modules short of feed.

dri plants cannot use **** to remove impurities and control iron quality, as well as production rates. dri plants need pellets with low alumina and silica to optimize dri quality, to limit effects on energy consumption and quality in downstream steelmaking processes...."

atb

Manara Minerals' Bob Wilt may be wanting to develop an in-house (future offtake) trading capability, it looks as though the process has been jump-started :

https://www.mining.com/web/saudi-arabia-flags-commodity-trading-ambitions-with-dme-stake/

.."The owner of Saudi Arabia’s stock market has acquired a 32.6% stake in the Dubai Mercantile Exchange as it seeks to diversify its revenue and gain access to oil, metals and agricultural trading.

Saudi Tadawul Group bought the holding in the DME, as the Dubai exchange is known, for 107 million riyals ($28.5 million), according to a statement on Thursday, making it the joint largest shareholder along with US-based CME Group...."

CME Group operates financial derivatives exchanges including the Chicago Mercantile Exchange, Chicago Board of Trade, New York Mercantile Exchange, and The Commodity Exchange. The company also owns 27% of S&P Dow Jones Indices. It is the world's largest operator of financial derivatives exchanges. Its exchanges are platforms for trading in agricultural products, currencies, energy, interest rates, metals, futures contracts, options, stock indexes, and cryptocurrencies futures.

'Another brick in the wall..'

And pursuing its own (future) offtake trading ambitions, it would seem..

https://www.mining.com/web/saudi-arabia-flags-commodity-trading-ambitions-with-dme-stake/

Little Den's tweet today :

Not until late 2024....and C-B wants to Co-Chair....

.."In view of the holding, this year, of the next edition of the Forum on Sino-African Cooperation ( #FOCAC ), I received, on January 19, the Ambassador of #Chine to #Congo with whom I had fruitful discussions around this important multilateral meeting. On this occasion, I confirmed Congo's desire to co-chair this forum which promotes the creation of synergies between China and African countries.

Subsequently, we focused our exchanges on the preparations for the next joint commission #coopération between China and Congo, which will be an opportunity to take an exhaustive assessment of our bilateral cooperation and identify new opportunities to strengthen our partnership which has continued unhindered for around fifty years.

Indeed, this year marks the sixtieth anniversary of the establishment of diplomatic relations between China and our country. On the sidelines of this celebration, a series of activities will be organized to mark these six decades of bilateral relations. It is also planned that His Excellency the President of the Republic of Congo will make a working visit to China; a subject which was also on the menu of discussions with Ambassador Li Yan..."