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Hi Mynytho / caml,

.. "So that would suggest that they view Zanaga as un-competitive and not viable?..."

No. It would suggest that GLN PR isn't 'up to speed' on its own products : when he (?) writes of .."future facing commodities – those needed to enable the world to decarbonise the global economy. ...." he(?)'s ignored that the current divergence in price between high and low FeO iron ore prices is PRECISELY because the former are much less polluting than the latter.

There's even been talk of some lower quality mines ending up as 'stranded assets' as the industry moves towards 'cleaner' sources, given the air quality issues that are a 'hot topic' in China at the moment (given air pollution links to Covid-19 vulnerability etc).

I'm faintly surprised that a switched-on spin doctor didn't reference this. Also , that he didn't seem to be aware of the cost-competitiveness of a potential Zanaga supply, driven primarily by the same quality /'indirect de-carbonising' considerations....

ATB

Hi CF73,

..."were relevant sections of our tender lifted out and pasted into their respective areas of the tender docs??.."

Good point ! Quite possibly, but more likely by CMEC than NCCL, if anyone, I'd suggest : the former would likely know potential suppliers and be better able , therefore, to 'tweak' the specs to favour an in-house or connected business.

ATB

Hi Longlad,

AT has confirmed that the Sept report will include a post B/S (that's balance sheet, in case anyone was wondering) update including any developments re COIDIC and SCM.....

ATB

Hi TheHoopedBaron,

AIUI, unless the MozGov offtake agreement (to buy the electricity at an agreed tariff) is on a 'cost plus' basis, I don't see how we can talk of 'earnings per share '.
We need to know what capex and opex outgoings are that have to be deducted from revenue, surely ? The former depends on the eventual capital structure ( debt/equity ratio and mix) and supplier agreements. Hence my earlier Q.

It seems premature to be 'counting chickens' when we're still awaiting the SHA TS.

ATB

ATB

Hi CF73,

Thanks for this. Good stuff re prospective inflows.

I'm looking for info on the upfront outflows ie how the project (s)- mine and power plant - are (conceptually at least) going to be financed : capital structure, supplier credits , export credits etc. I can't readily see that on the website.

Is it buried in a presentation somewhere ?

ATB

Hi again,

As a follow-on to this Bloomberg article, it's worth recalling that when Xstrata invested in Zanaga (pre-GLEN) it was their flagship investment as part of their plan to finally secure [direct] exposure to iron ore.

Iron ore figures as the highest margin commodity within the portfolios of GLEN's major miner competitors - GLEN's lack of which has been criticised by its largest insti shareholders over the years and is still perceived as an issue , as evidenced by recent articles.

If Ivan can indeed be persuaded/pressured to 'embrace change', a pivot to the Xstrata view would seem to be one material, 'popular' and obvious shift.

With this background, it can't hurt ZIOP's prospects that GLEN's current Head of Industrial Assets - Peter Freyberg (one of 3 x named management after Ivan) - came from Xstrata and was involved closely in its initial investment in Zanaga.

If I was indeed on twitter, this is where I'd be tempted to say........join the dots ;->

ATB

Hi Jiving,

.." What is Glasenberg going to do, build, JV or sell - here we are 7 years later, same question. All the current explanations for the low price were given then - its a big seller..."

By coincidence, here's an (not necessarily THE) answer, courtesy of GTA5 elsewhere :

"Maybe this is a good indication of things to come:

HTTPS://www.bloombergquint.com/business/ivan-glasenberg-s-glencore-needs-to-embrace-change

I think Glasenbergs days are counted and it'd be odd if the decision to kickstart Zanaga is not taken soon considering the macroeconomics around Iron Ore and Glencore's pitiful lack of exposure.
All they need is to work out a formula to stop Nguesso&Co from raiding the asset/operator once the infrastructure is built. (or at least keep the raiding within reason and profitability to ZIOP)
The stars are aligning very nicely, and although ZIOC is a two man band fronted by Trahar, all they need is for Glencore, Coidic, Yantai or anyone with a little credibility to say "go" and the re-rating into a Mid-size FTSE company would be almost instant.

Onwards and upwards, (and note to self: more patience required.)

GL, GTA"

I concur with the concluding sentiments ! Oh.. and the general thrust of the article.

ATB

Hi Longlad,

I think Yantai Group's suggestion - that the floating platform have a dual purpose and be enabled to deliver product onshore (bauxite, in their case - is interesting : C-B's associated gas is currently flared wastefuly/pollutingly; processing the bauxite Yantai ships out of Guinea only as far as C-B for processing would save on bulk transport costs to China....

In a previous existence, I financed a soft-drinks can-making plant in the Middle East: it made economic sense to manufacture the cans locally, rather than ship a large volume of fragile, empty cans (from Holland, IIRC) , where most of the volume was Dutch air....

The concept is different, but the underlying principle is similar.

ATB

Hi Sootysnipes,

.." So why did they raise just enough to keep the lights on for twelve months? A paltry raise of just over a million quid..."
Perhaps because (a) they think that'll be long enough for a 'monetisation event' ? (b) They don't want to dilute unnecessarily ? I think the Retention/LTIP package are indicators that they thought something was in the works...and got frustrated by covid and other 'events'.

..."Surely they could have just borrowed such a small amount or Elphick could have put his hand in his back pocket...?"
Perhaps (a) they wanted to signal that they could still access 3rd party/new monies, as a sign that they were 'still in business' and that resort to shareholders would betoken a lack of alternatives ?

At this stage and based on the 'known facts' , your guess is as good as mine... AND vice versa. My guess has (some) circumstantial support...or maybe it's just confirmation bias ;->

ATB

Hi jedclampit,

I think it was Clint Eastwood who said that ' if you want a guarantee, buy a toaster; if you want loyalty, get a dog'.

Sounds like him, anyway !

ATB

Hi jdt 1990,

..." a little more resistance...", from whom ?

(1)The consumers will be grateful to have electricity, possibly for the first time in their lives;
(2)Moz Govt will appreciate getting help in achieving its development goals;
(3)GE will be happy for the business, until it weans itself from coal; and why should it, given that
(4) China, which currently gets 55% of its energy needs met by coal plans to reduce this to 35% (rpt 35%) by 2050. That's 35% of (presumably) much higher needs, so in all likelihood, no decrease in coal use in volume terms.
I believe its a similar story in India. Closer to home, Germany uses nearly as much coal (dirty lignite) as it did 30 years ago, thanks to its abandonment of nuclear and need for a reliable baseload supply.

In that context, I think most reasonable people would feel that any 'resistance' was likely hypocritical and immoral, not to say outright criminal, esp. re impact on (1).

Sorry for rant, I'll get off my hobby-horse (one of them I have a stable-full).

ATB

Hi beardozer,

No offense taken - I was replying somewhat 'tongue in cheek'.

You mention Elphick's stake : since we've been talking numbers, in his case @ 100p that'd be around £ 75 million. He's probably quite well situated already, but still an amount" worth getting out of bed for," to paraphrase Naomi Campbell.

Maybe as much to the point : he was Oppenheimer's PA and doubtless very well connected, some of these people will be 'under the radar' here. I bet he's motivated for social reasons at the least to want to take care of them as well...

ATB

Hi beardozer,

I answered the bit I could !

Re your Q, try any of : off the radar (most peeps don’t even know that we’re not “that” Congo ; not “sexy”; not promoted ( a mixed blessing this : normally, promoted co’s have dilutive placements ); a long time, without material developments; too complicated; too many attempts by the twitterati at ‘ pump ‘n dump’; ‘easier’ stories to sell; ZIOC inhibited by GLEN; Africa / corruption + mismanagement......
But MrElphic k would tell you that even the drabbest rock might be hiding the finest of diamonds....

ATB

Hi beardozer,

TIA and ATB : thanks in advance and all the best.
I had to ask about TTNYR (this time next year, Rodney) and even KR (kind regards), which are all 'my generation' stuff - what the kids' acronyms mean is anybody's guess....and in some cases I'd probably prefer NOT to know...

ATB

Hi Jiving,

Our posts crossed ! So $ 700M just for EXTENDING what is basically your OPTION to develop....there's gold in them thar [iron ore] hills !

ATB

Hi Jiving et al,

FMGL isn't the only 'jilted suitor'

From the recent Steinmetz/VALE court case re Simandou , https://www.miningmx.com/news/ferrous-metals/42025-steinmetz-hopes-sting-operation-enough-to-reverse-2bn-arbitration-order/

we learn that, despite "comments by José Carlos Martins, the former head of Vale’s iron business, that there was “something wrong” with the Simandou deal, Vale decided to go ahead [paying $1.5Bn for 51% of a CONCESSION, ie basically a 'concept ] because Simandou was the “only open door in Africa” to maintain Vale’s market share...."

ATB

Hi Mitch984,

Thanks for running the hypothetical numbers.
A 1: 2 ratio between (a) 'golden handcuffs as we get to the short strokes' and (b) LTIP for 10 + years' service seems about right.

Based on 100p per share, ZIOC would be 'worth' £ 300M, GLEN's stake maybe more (control, 'connections', credibility), for a full worked and costed concession.

To put that in perspective..."In December 2008, a three-year EXPLORATION PERMIT to prospect for iron ore in Simandou, was awarded to BSGR Guinea, after the government of Conte granted RIGHTS TO MINE the northern half of Simandou, days before he died, to Steinmetz for $160 million. Steinmetz then soon sold a 51% share on to Vale for $2.5 billion...."

OK, we're not strictly comparing like for like; that was then, this is now; 'horses for courses'; apples and oranges...etc, etc

But whilst 100p would do nicely for most ZIOC shareholders (incl the 3 x team !), the problem is it would be chickenfeed for GLEN in cash terms. But GLEN could reasonably expect a premium...and given its multifarious business interests, lots of scope for direct and indirect trade-offs, both locally and elsewhere.

Another thought : it's minor, but Zanaga is a bit of 'unfinished business' for Glasenberg. OK, he may not want to be involved with a greenfield site, but he'll be thinking of his legacy once he goes.
Ivan's described as super - competitive. Given all the GLEN issues giving scope for an incomer to 'kitchen - sink', I can't imagine he'd want to leave a juicy rabbit for his successor to pull out of the hat...

ATB

ATB

Hi Caterham7,
See https://www.bloomberg.com/news/articles/2020-05-15/u-s-throws-down-gauntlet-to-china-with-mozambique-gas-mega-loan

Concluding para (EXXON partnered with CNPC) acknowledges 'there may be trouble ahead' There's commercial interests and there's politics...;-<

However, by analogy TOTAL (French) / McDermott US Subcontractor, if GE is only subcontractor/supplier to a CMEC-led multi-lateral-financed project, EXIM 'shouldn't' have a conflict. ...

Interesting (whatever your politics) to note that EXIM was 'off games' from 2015 to 2019.

"...U.S. President Donald Trump’s sparring with China is playing out in an unlikely new arena: the sandy turf of northern Mozambique, one of the world’s poorest countries.

The U.S. Export-Import Bank on Thursday approved the broadened scope of a $4.7 billion loan to back American suppliers to a liquefied-natural-gas development that could transform the southeastern African nation’s economy. The lender said China and Russia had both been considering helping finance it.

The Exim Bank helps foreign companies buy American products when private lenders won’t provide financing, with one of its goals being to “advance the U.S.’s comparative leadership in the world with respect to China.” The appointment of three Trump-appointed nominees to the bank’s board in May 2019 helped provide the quorum needed to restore its ability to approve deals worth more than $10 million for the first time since 2015, smoothing the way for its participation in the Mozambique project.

Anadarko Petroleum Corp., based in Woodlands, Texas, initially led the Mozambican project that was sold on to French oil major Total SA. U.S. companies including McDermott International Inc. have been awarded contracts worth billions of dollars to help build the facility -- work that Exim Bank said could support 16,700 American jobs over the five-year construction period.

China has a well-established presence in Mozambique. It funded and built Africa’s longest suspension bridge in the capital, Maputo, and has invested in a massive hotel and conference center there. Russia has made more recent inroads, winning some oil and gas licenses and reportedly supplying mercenaries to beat back insurgents operating in the vicinity of the gas project.

Total’s project is the smaller of two developments that aim to tap Mozambique’s massive natural gas reserves. The other is now led by Exxon Mobil Corp. Its notable partners include China National Petroleum Corp., which could complicate any bid to secure Exim bank finance.

HTH and ATB

Hi 99icecream,

Thanks for confirming my guess re Harris.

But now you've got me puzzled re the other two : I got the distinct impression (maybe that was the intention) that AT was one of the other two. If he was, how would he be a non-employee individual ? By providing his services as self-employed company ?

Any further detail would be (mildly) interesting.....esp. if it turns out that he DOESN'T have 'skin in the game'.

TIA and ATB

Hi Longlad,

Agree re the 3 NEDs, Elphick, Dines and Velloza.

I understand that AT is one of the 3 Team members who benefit from the Incentive/Retention package RNS'd Aug 2019; another MAY be Colin Harris (who was at the last AGM, IIRC), who was once a Zanaga NED (when the BoD was larger) and prev. Project Director (preXstrata) , also a former NED at London Mining and ......NCCL . No idea re the 3rd, it seems likely that it 's someone who's available for adhoc consultancy.

If they're not PMDRs (and the consensus seems to be that AT isn't), there's no reporting requirement AFAIAA until they reach 3 %.

HTH