Member Info for extrader

Thanks for this.

.."The EU is expected to sign two memorandums of understanding with Democratic Republic of Congo and Zambia, easing access to critical raw materials as the bloc seeks to diversify suppliers. They will be part of the EU’s broader effort to develop the strategic Lobito/trans-Africa corridor, a railway project to connect Angola, the DRC and Zambia to allow for shipping raw materials and minerals across the Atlantic..."

The EU proposed involvement in Lobito corridor would mean that DRC's mineral-rich area Katanga (main city Lubumbashi) would be shipping out of Angola, at Lobito, rather than ex Lubumbashi down via Ilebo to Kinshasa (and thence Brazzaville/PN).

Which was on Big Den's wishlist summarised yesterday :

"- rail link Kinshasa > Ilebo (headwaters of Kasai river. Wiki says In September 2007 an agreement was signed for China to fund the construction of a railway from Ilebo to Kinshasa, about 700 km. Ilebo is already a transport hub for trains to Lubumbashi in SE DRC, heart of mineral-rich Katanga, next to Zambian border);"

AFAICS, the EU is interested in 'strategic' minerals for renewables eg copper, cobalt, rare earths, etc and hasn't (yet) bought into the 'green iron ore' thesis.

But they'll need to source 'green' steel from somewhere to go into their 'green' EV's, won't they...which is where the Gulfies come in...

ATB

Right. But the borrower is /was 1AF2, wasn't it ie 'AZ Inc'.

So it's his call : from what we've been told , he can ask for the shares back , or cash in lieu.

The cash in lieu doesn't appear to have to be linked to the prevailing s/p at time(s) of unwinding, but to the s/p value at the time the shares were offered as security back in 2020.

I commented at the time the loans were taken out in July 2020 that this was an unusual concession to grant to the lenders, since it effectively capped' their risk of a short squeeze, if they were to sell for their supposed risk management purposes (hah!).

In ice hockey, you skate to where the puck is going to be.

AIUI

Hi Theanalyzer,

Just on a point of information, the revised repayment agreement tagged on as an incidental to the 24/12/2020 RNS actually says :

.."At the end of this stock-lending transaction or on the repayment date (in July 2022), the collateral will be returned to the Group in shares or cash, at the choice of the BORROWER'.

There are, of course, a number of scenarios in which the borrower might choose to accept the latter over the former.

The only (possible) complication being that the 'cash equivalent' value of the shares-as-security seems (unusually) to have been agreed at the outset.

But doubtless AZ knew what he was doing.

HTH

Hi Alwayshoping,

Thanks for putting some meat on the 'bones' I'd summarised earlier in the day, esp the guess at 'Capfound'.

ATB

Hi Jiving

Re speculation of possible Chinese funding issues, see this :

Angola

China Sonangol International Holding to exit Block 3/05A

Chinese-Angolan oil company China Sonangol International Holding Limited (CSIHL), which is based in Hong Kong, will shortly leave oil block 3/05A, on Luanda's northern coast. [...]

Published on 17.10.2023 at 04:40 GMT

Https://www.linkedin.com/feed/update/urn:li:activity:7119600962163400704?updateEntityUrn=urn%3Ali%3Afs_feedUpdate%3A%28V2%2Curn%3Ali%3Aactivity%3A7119600962163400704%29

OneLegal

OneLegalOneLegal

951 followers951 followers

China Sonangol International Holding, Limited, has been expelled from the Block 3/05-A partnership for defaulting on its financial obligations. China Sonangol’s 25% stake was transferred pro-rata to the other partners. The post-transfer ownership of the Lower Congo Basin block is as follows:

• Sonangol P&P (Operator) – 33.33%

• Maurel & Prom – 26.68%

• Azule Energy – 16%

• Etu Energias – 13.33%

• NIS Naftagas – 5.33%

• Afentra – 5.33%

This forced transfer was enacted by Executive Decree 227/23, of 10 October 2023..."

Not sure who's behind China Sonangol....and wonder what the story is?

Ho hum

This is the gist of Big Den's speech:

- thanks China for invite, says quick to reply /accept because keen on investment infrastructure for his people and for Africa;

- references unexploited resources ' leading to slow growth (2%) and lost productivity potential ('40%');

- reminds audience of goals set out for 2040 back in 2012;

The wishlist includes:

-NorthSouth Corridor Djamena/Bangui/Brazzaville/Kinshasa;

- TransAfrica rail Mombasa/Nairobi/Kampala/Kinshasa/Brazzaville/Pointe Noire [ see ref to Ilebo below];

-port/rail infrastructure for River Congo;

- rail link Brazzaville > PN;

- rail link Kinshasa > Ilebo (headwaters of Kasai river. Wiki says back In September 2007 an agreement was signed for China to fund the construction of a railway from Ilebo to Kinshasa, about 700 km. Ilebo is already a transport hub for trains to Lubumbashi in SE DRC, heart of mineral-rich Katanga, next to Zambian border);

-improvements in navigability of Congo and Bangui rivers;

- hydro and agric dams at Sounda (C-B), Chona (sp?)(Cameroon) and along the Congo (C-B/DRC);

- fibre optic corridors throughout the central region of Africa;

- agricultural improvement via mechanisation and irrigation;

Points to the 'finance gap' - in the hundreds of $$$$ millions - and the lack of financial resources to pay for these/'our' aspirations to boost the vision of African free trade.

Invites China/ Xi to re-commit and help pay for this vision.

Reminds audience of need to protect the environment, given the disproportionate effects on Africa of climate change (responsible for barely 3% of global emissions [Not looking at you, China]), reminds everyone of the 3 Basins summit being held 26-28 Oct in Brazzaville.....

'Long live Bridge and Road co-operation! Long live China C-B co-operation! Long live China - Africa co-operation!'

E&OE

ATB

Here's the link to BigDen's speech :

https://twitter.com/PR_Congo/status/1714636579426177178

This is the gist :

- thanks China for invite, says quick to reply /accept because keen on investment infrastructure for his people and for Africa;

- references unexploited resources ' leading to slow growth (2%) and lost productive potential ('40%');

- reminds audience of goals set out for 2040 back in 2012;

The wishlist includes:

-NorthSouth Corridor Djamena/Bangui/Brazzaville/Kinshasa;

- TransAfrica rail Mombasa/Nairobi/Kampala/Kinshasa/Brazzaville/Pointe Noire;

-port/rail infrastructure for River Congo;

- rail link Brazzaville > PN;

- rail link Kinshasa > Ilebo (headwaters of Kasai river. Wiki says In September 2007 an agreement was signed for China to fund the construction of a railway from Ilebo to Kinshasa, about 700 km. Ilebo is already a transport hub for trains to Lubumbashi in SE DRC, heart of mineral-rich Katanga, next to Zamnbian border);

-improvements in navigability of Congo and Bangui rivers;

- hydro and agric dams at Sounda (C-B), Chona (sp?)(Cameroon) and along the Congo (C-B/DRC);

- fibre optic corridors throughout the central region of Africa;

- agricultural improvement via mechanisation and irrigation;

Points to the 'finance gap' - in the hundreds of $$$$ millions - and the lack of financial resources to pay for these/'our' aspirations to boost the vision of African free trade.

Invites China/ Xi to re-commit and help pay for this vision.

Reminds audience of need to protect the environment, given the disproportionate effects on Africa of climate change (responsible for barely 3% of global emissions [Not looking at you, China]), reminds everyone of the 3 Basins summit being held 26-28 Oct in Brazzaville.....

'Long live Bridge and Road co-operation! Long live China C-B co-operation! Long live China - Africa co-operation!'

E&OE

ATB

.."Via a bridge, admittedly, that is 'under discussion' in Beijing...."

That would be CRBC and CRCC, covering the road/rail bridge intended to span the Congo River between the 2 capitals.

For any pub quiz aficionados, the 2 closest capital cities in the world, unless you go for Vatican City/Rome....

ATB

Here's a timely overview from the BBC

https://www.bbc.co.uk/news/world-africa-67101736

The SGR currently ends at Naivasha and hasn't reached critical mass re cargo traffic.

It needs extension/completion to do that.

..""Uganda really needs to also be onboard,"

But that ambition looks shaky.

The original East Africa Transport Master Plan, proposed by the East Africa Community around two decades ago, wanted two routes into landlocked countries from the coast - one coming from Kenya, known as the northern corridor, and another from Tanzania, dubbed the central corridor. It then had connections to South Sudan and DR Congo.

However Uganda may decide to push its business towards Tanzania. Its railway project has cost way less to build and offers higher speeds as the line is electrified.

Former Tanzanian President John Magufuli tore up the deal that had been signed by his predecessor with China to build the railway and chose to get funding instead from Turkey and Portugal to finance the first leg of the project.

Tanzania also appears on track to connect to Rwanda, Burundi and DR Congo - with China coming onboard in latter sections..."

There's a squeeze on China's State level-lending

.."Internal issues that have affected the Chinese economy have also led to hugely diminished funding, says Nigeria's former Deputy Central Bank Governor, Kingsley Moghalu.

"The funding levels in the past couple of years have not been more than $2bn across the continent," he says - down, he estimates, from between $10bn and $20bn a decade ago..."

Which may be taken up by the private sector

.." Mr Murkomen says Kenya is open to options: "We have private sector players in China who have said they are willing to put their own resources as long as we can have a conversation about how they'll recoup their finances."

One could be a grace period to allow the country to first service the loans taken to finance the sections of the railway that are complete, he explains..."

So, lots of heavy lifting still needed.

And the relevance to ZIOC is minimal, since any extension through to DRC would only make Brazzaville > Pointe Noire the terminus.

Via a bridge, admittedly, that is 'under discussion' in Beijing....

As I see it.

ATB

Meetings with representatives of :

- Exim Bank, to review past and present projects being financed;

- CRBC - discussion re Sangha bridge (2002); highway Ouesso>Bokola; Twin Towers ring road; and Brazzaville-Kinshasa bridge;

- HuaWei - Phase 3 of telecomms network, to extend coverage;

-China State Eng'g Corp - Kintele Sports stadium; Brazzaville > PN highway; a bank HO in Brazzaville;

- CRCC - repairs to Braz> PN railway, part of the Congo Ocean loop;

- agriculture : LD keen to promote domestic fertiliser industry ('gas, potash and phosphate all within 150Km of PN'), mentions an investor 'Cap Found' (?)

No mention of ZIOC, as expected (too early).

A propos Jiving's comment re 'grooming for succession', both tweets were carried on the Presidential site, Little Den's also on his Min of Cooperation one....

ATB

Newsflow is by definition unpredictable.

It's 'confirmation bias' if you only look at the 'good stuff' and ignore/play down the 'complicating' stuff.

Or do you genuinely think that Gaza/Israel and potential Gulf spillover; BigDen succession issue; global macro are irrelevant to the ZIOC investment thesis ?

As for China, here's the BBC's take https://www.bbc.co.uk/news/world-asia-china-67120726

All about Bridges and Roads track record.

On the positive side (from the map), no plans for wasteful transAfrican railways, either north or south of C-B.

On the negative side, less money to splash out on projects (as we may be seeing at Simandou) BUT - positively, surely - more willingness to J/V with others, instead of going it alone:

.." China has cut down financing. It has imposed limits on external lending by Chinese banks, and investment deals are now nearly 50% smaller than they were five years ago, according to a GFDC analysis. It has also moved away from being the only creditor in the BRI, and started a platform where other countries and international banks can lend money..."

Oh - and btw - it's not all 'bad news' locally : it looks as thought the PN port scanner issue is being resolved and that it's getting (a little bit) of its house in order.

HTH

'Always darkest before the dawn'

.."ria20

Posts: 6,195

Price: 55.00

2 Oct 2023 09:57

£1.00 Coming shorters are going to get burnt this week.."

Hope he held, long and strong.

Hi 99icecream,

Yes, I got that bit. I just thought it might be that BigDen is throwing the more 'expendable' members of his extended family to the wolves. And, if so, after such a long time working together, why?

Bouya will know where a lot of bodies are buried (perhaps literally ;-

This is a cross-post , prompted by comment elsewhere.

... taking a fresh look at things from a different perspective, that of dilution.

SRT started life with 69m shares and an implied MCap of £24m after issuing 11.5m shares @35p.

It now has an MCap of £85m, based on 192m shares and a 44p shareprice.

The history of placings - total 95m shares, raising £ 31.05m at an average of 32.7p- is

-5/2006 9m @47p = £4.25m

-3/2007 9.5m @42p = £4.0m

-4/2012 9.5m @27p = £2.5m

-7/2014 8.5m @ 18p = £1.5m

-5/2018 12m @25p = £3.0m

-1/2019 13.4m @30p = £4.0m

-4/2020 6.0m @25p = £1.5m

-3/2022 16.4m @30p = £4.9m

-6/2023 10.7m @50p = £5.4m

There's been further dilution of (192 -(69+95)= 28m shares, through a mix of options and warrant exercise that will have raised a bit more cash.

Meanwhile, the Loan Note Facility has grown progressively, from an initial £ 10m in 9/2017 to the recently-increased (3/2023)£ 40m.

As shareholders/owners - we should recognise that the LNF has so far reduced the immediate need for further dilution.

OTOH, these secured loans come at a price, not only in interest but also operational flexibility : the March 2023 breach of covenants in relation to debt service cover and gearing was only cured, AFAICS , by the latest placing.

SRT reported gross cash balances of £3.9m @ 30 September 2023 (historically about £900K of this has been restricted), at 3/2023 it was £ 2.2m gross and the LNF stood at £ 7.7m.

On the face of it, this affords reasonable headroom, depending on covenant test definitions.

Timely progress re: project execution, client acceptance, invoicing and payment - all remain pretty critical, though.

Corrections and clarifications more than welcome!

ATB

ATB

I posted recently about africa intelligence comment re Little Den interdepartmental rivalry :

11.4.2023

"Congo ministers 'Kiki' and Bouya spar in contest to attract foreign investment

The international cooperation minister Denis Christel Sassou Nguesso has been given the official go-ahead for an inter-ministerial committee to manage foreign investments. His rival, the minister of territorial development Jean-Jacques Bouya, has been kept on the sidelines.."

Latest per BrazzaNews :" Jean Jacques BOUYA stripped of his exclusive powers over major works. The decision was taken at the Council of Ministers on Wednesday October 11, 2023. Several modifications have been made to the legal status of Major Works. Also, the Minister of Regional Planning must henceforth submit to the control of the Congolese Prime Minister..."

Supposedly because of peculation over a major building project ' Twin Towers'.

Interesting, because Bouya was part of Big Den's inner circle:

Per wiki

.."Jean-Jacques Bouya (born 24 May 1962[1]) is a Congolese politician who has served in the government of Congo-Brazzaville as Minister of Spatial Planning and Major Projects since 2012. A pilot by profession, he served as Transport Adviser to President Denis Sassou Nguesso beginning in 1997 and as Delegate-General for Major Projects beginning in 2003...

.. Bouya is an ethnic Mbochi related to Denis Sassou Nguesso, who became President of Congo-Brazzaville in 1979; he is the son of a cousin of Sassou Nguesso...

..The decision to include Bouya in the government [in 2012] was attributed to a need to assuage the concerns of foreign partners about the lack of parliamentary oversight for Bouya and his General Delegation for Major Projects; given the amount of power wielded by Bouya, it seemed incongruous that he did not hold a government ministry through which he could be held accountable by Parliament...."

In other news, Global Access Congo has got a Finance Ministry Circular that says importers are to start using the scanner (and, presumably, pay the import duties....).

Slowly, slowly...

Denis Sassou-N'Guesso - Officiel

@SassouNGuesso_

Je me suis entretenu, ce 13 octobre 2023, avec Madame GiorgiaMeloni , à l’occasion de sa visite de travail au Congo.

A working visit, no doubt in connection with ENI's USD 5Bn floating LNG plant, see

https://www.reuters.com/business/energy/eni-buys-floating-liquefaction-facility-produce-lng-congo-republic-2022-08-05/

augmented by a second FLNG vessel

https://www.eni.com/en-IT/media/press-release/2022/12/eni-launches-second-flng-project-republic-of-congo.html

with Saipem just announcing its subcontract for conversion of Scarabeo 5 semisubmersible drilling unit into a separation and boosting plant (Floating Production Unit - FPU)

https://www.saipem.com/en/media/press-releases/2023-08-10/saipem-awarded-two-new-contracts-total-value-around-700-million-usd

The commissioning offshore works and the start-up of the FPU are scheduled by the fourth quarter of 2025.

This contract awarded to Saipem is part of Eni’s Congo LNG Project, the country's first natural gas liquefaction project that is expected to reach an overall liquefied natural gas (LNG) production capacity of 3 million tons per year (approximately 4.5 billion cubic meters/year) from 2025.

Part of the West's scramble for alternatives to Russian gas, post sanctions.

.." Italy’s energy sector is strongly reliant on fossil fuel imports from the Russian Federation (hereafter “Russia”), which in 2021 accounted for one third of total energy supply (TES) of fossil fuels. Natural gas was the single largest fuel in TES in Italy at 42% in 2021, 94% of which was imported and around 41% of natural gas imports originated from Russia. Natural gas is also the dominant fuel in the electricity sector, with a share of 50% of generation. Italy is committed to phasing out the dependence of Russian gas by 2025."

Europe has an interest in maintaining the status quo.

ATB

Seriously 'unclean' hands...

Knives out.

hxxps://abcnews.go.com/International/wireStory/prosecutor-files-case-argentinas-frontrunner-javier-milei-days-103971903

A prosecutor has launched a criminal case against Argentina’s frontrunner in this month’s presidential elections, accusing Javier Milei of deliberately causing a sharp drop in the Argentine currency when he encouraged citizens not to save in pesos...

President Alberto Fernández had called for the investigation in a complaint filed Wednesday, saying that the right-wing populist candidate was trying to scare the public and that HIS [ Ed.: my caps] actions were “a severe affront to the democratic system.”

Prosecutor Franco Picardi on Friday referred a criminal case to a federal judge, going off Fernández's accusation that claimed Milei and other candidates on his party's ticket were inciting public fear — a charge that carries possible prison terms of up to six years. Federal Judge María Servini will later decide whether there is enough evidence to indict.

Milei is considered the frontrunner in the Oct. 22 election, after rocking Argentina’s political landscape when he unexpectedly received the most votes in August primaries that are widely seen as a massive poll of voter preferences.

ATB

Hi Eddsy

There's no negative on my part, I wrote 'we can but hope'.

I was encouraged by the headlined 'last minute change of plan' since there's precedent for this leading to good news viz AD Ports signing , influenced by this

Sassou lobbies AU leaders to postpone Ukraine mediation mission

BREAKING NEWS published on 15/06/23, 19.15 - OVER THE LAST 24 HOURS Denis Sassou Nguesso has been trying to convince his counterparts at the African Union to delay a mediation mission to Kyiv and Moscow scheduled for 16 June.

Diplomacy 14.06.2023

I leave others to 'join the dots' and end every post with Boom!

HTH.

Those acronyms:

- CRCC = China Rail Construction Co

- MCC = China Metallurgical Group Corporation a Chinese state-owned enterprise engaged in EPC (engineering, procurement, and construction), natural resources exploitation...

China Metallurgical Group Corporation's subsidiary, Metallurgical Corporation of China Limited, co-invested by China Metallurgical Group Corporation and Baosteel Group Corporation (Baosteel Group)

- Tsingshan = Tsingshan Holdings Group , largest nickel producer in the world (nickel being key for stainless steel);

- YTP = Yantian Port Group, the people behind ZIOC's proposed floating, dewatering, storage and offloading FDSO solution.

ATB

Continued...

Cameroon, Congo

Alexandre Mbiam will struggle to keep his promises on Mbalam-Nabeba iron ore project

The Cameroonian businessman, who has good links with the authorities in Yaounde and Brazzaville, is trying to give the impression that his legal battle with Sundance, which was deprived of the project in late 2021, will affect neither the Chinese financing he hopes to get for it or its production date. [...]

10.10.2023

This suggests that the Sundance Burford-funded litigation re expropriation is still an issue...and maybe that Chinese funding issues are more widespread than the recent Rio/Simfer/Simandou bridging loan indicates.

This article from 6 months back describes what the plan was then (a deferral to start date) with some good detail re scope of mines, infrastructure and parties reportedly involved - CRCC, MCC, BaoWu, Tsinghan and YTP....

https://bougna.net/2023/09/25/contact/projet-nabeba-mbalam-alexandre-mbiam-annonce-la-pose-de-la-premiere-pierre-t4-2023/

ATB