Member Info for extrader

From depeches

.."The Lobito corridor, linking Angola to Zambia and the southern part of the Democratic Republic of Congo (DRC), could be extended to the east of that country.

The aim is to improve mineral exports and promote regional stability. A proposal by the United States, which aims to offer an incentive to conclude a peace agreement. But the outgoing Secretary of State for Africa, Molly Phee , regrets the stalemate in the negotiations.

The Congolese authorities accuse Rwanda of supporting the M23, a group that is extending its control in the east of the DRC, while Kigali is calling for the FDLR to be eliminated.

The recent absence of President Paul Kagame at the Luanda summit in December has also slowed diplomatic progress.

According to Molly Phee, the Biden administration pledged to pay more attention to Africa, but other international crises took precedence.

For the time being, the eastern DRC remains unstable, and tensions between Kinshasa and Kigali hinder any prospect of stabilisation. Expansion of the Lobito project now depends on an overall agreement on both security and and politics.

The Biden administration is thus leaving a burning issue for the Trump presidency in the Great Lakes region. .."

Well, that last-minute gesture politics from Biden didn't last long.

Given Trumps 'America first' semi-isolationist approach (right now, at least), it'll be interesting to see what happens next....which may give a steer on the new US view (if it has one at all) on Chinese dealings in Africa.

Nor is Ma'aden /Manara Minerals, with FT reporting it's to take a 10-20% stake in RekoDiq copper-gold mine imminently. $ 500 to $ 1 Billion.

The financing proposed caught my eye :

.." The initial phase of the mine would cost $4.5bn, and be funded by $1.5bn from Barrick, a similar but slightly lower amount from Pakistan, and the remainder from a debt consortium that would include the World Bank, the Asian Development Bank and other western lenders, according to Bristow.

A second phase of the mine, estimated to cost a further $4.5bn, would be funded by the revenues generated during the first phase, Bristow said."

P*kistan has similar credibility/governance issues as C-B, but on steroids : basically a failed state, but with nuclear capability and an exploding demographic. Which may explain the multi-lateral finance involved.

AIUI

Situation nicely summarised on t'other board by new (13 Jan) poster DH 99

.."Whether we receive any tangible details as to the content of the event in a proper RNS is the big question. Not much to go on so far to tempt attendance. Particularly for those with busy schedules such as me.

And whether we are facing a slew of updates that do not materially affect the current position like last time, or are we to receive something much more material i.e. beginning FEED / financing / confirmation of strategic partner(s) investment or involvement, whether ZIOC plan to develop the mine themselves (with help from partners) or offer/confirm of a BUY-IN, BUY-OUT OR SHAKE IT ALL ABOUT Is still very much the question...."

Quite!

Made me laugh, anyway.

Thanks for the discussion, all. Not much to add atm, other than :

(1) A 'public auction' seems likely, everyone* wants transparency :

-Elphick, I think because his rep means a lot to him (social standing, etc)...and there's a lot in this for him for ill-willers to cavil at;

- GLEN, because, well it's GLEN ...and has 'form'/image issues that it wants (or, less charitably as 'bad for business', needs) to move away from;

- any potential investors, because of Africa's envelopes history. A 'clean' public auction reduces scope for subsequent claims of backroom dealing*;

- it also lets the Congo electorate/government as a whole in on the deal, in the process increasing accountability and - hopefully - limiting scope for abuse by those in a position to abuse.

- as would getting ADB or the IFC involved in some way as 'politically neutral' watchdogs', covering ESG issues appropriately and reducing C-B scope for back-sliding or playing games.

ADB has an indirect shareholding in AriseIIP, AIUI..and the IFC has been active in-country recently on various 'governance-strengthening' initiatives. A token shareholding from either/both would be tantamount to a 'seal of Good Housekeeping'and neutralise a lot of NGO activist concerns.

(2) * C-B's role : 'Don't change horses in the middle of a stream'. ZIOC's ongoing involvement (maybe with different shareholders) ensures continuity / consistency of approach/records/messaging /sensitivities etc: It (via MPD) will have a record of the entire relationship ab initio, supplemented by the 'institutional memories ' of Colin Harris, Gary Vallerius and others (incl going back to Simandou dealings, as MM (where he?) has pointed out).

Big Den is in his 80's and Presidential elections (for which he's not eligible) are due in 2026. The local press is already starting to report on the pre-election build-up.

(3) GLEN's role : it may be content with Marketing Rights > Life of Mine Royalty and monetising an otherwise 'unproductive' asset (that it picked up as 'windfall' in the Xstrata takeover). Or a much reduced stake (5-10%) just to keep an eye on things.

No doubt it would like C-B to clear its $350m pre-export oil loan outstandings , from the tone of Africa Intelligence 20 12 2024

Impatient Glencore badgers Brazzaville to pay debt

The Congolese state still owes the Swiss trader $349m, but its ability to keep up payments is shrinking. [...]

(4) I'd really, really like to know (any ideas out there?)

(a) how much time is needed to COMPLETE FEED (folk seem to thing it's already underway) : MK said in June 2024 that the Front-End Engineering Design (FEED) phase for the Zanaga Iron Ore Project would take approximately 12 to 18 months.

(b) How long would it take to produce a meaningful resource upgrade? I don't know what the cost vs time vs accuracy modelling looks like (though I'm sure Colin Harris does!)

Questions, questions.

Looking fwd to answers, answers.

GLA and ATB

The Sydney Morning Herald is dismissive, because of RTZ's antipathy to coal

https://www.smh.com.au/business/companies/coal-mines-cast-doubt-over-260bn-rio-tinto-glencore-merger-20250119-p5l5j5.html

I've suggested that - from Stausholm's interview on Sky, where he says 'Simandou isn't enough' - one might reasonably speculate that RTZ MIGHT be looking at ZIOC.

GLA and ATB

Ashmore latest :

.."Argentina

From February, the central bank will slow the peso’s crawling peg to 1% per month from 2% currently. The crawling peg acts effectively as a floor to inflation in tradeable goods. With the peso now depreciating more slowly, inflation is likely to fall even further.

Some economists criticised the measure, worried that the currency is already overvalued with large outflows to tourism in December as a justification. In our view, this is narrow minded. If you go to Buenos Aires in December, you’ll see locals ‘never’ spend their holidays there and the devaluation of the BRL made it cheap for Argentinians to travel to Brazil for the first time in decades.

The current account is likely to remain in surplus overall and the currency stability will support investments.

The main concern about the currency was the possibility of the International Monetary Fund (IMF) requiring a large devaluation to increase its loans to Argentina.

However, local newspaper La Nacion reported the IMF Chair Kristalina Georgieva met Javier Milei at Davos, and reported her intention to work “quickly” to close a new programme. This statement came after the Central Bank of Argentina narrowed its crawling peg and there was no mention of foreign exchange (FX) policy in the statement...."

GLA

Q : how do you 'leverage' your existing strong Cu position?

A: you use it as a bargaining chip to gain something advantageous to you elsewhere.

AIUI

GLA

And, re port importance, maybe all those flights by our mystery private jet to Abidjan/Ivory Coast - ADB (indirect investor in Arise IIP) HQ - played a part?

On another matter - prompted by today's goings-on - I wonder idly whether the Rio/GLEN talks were in any way triggered by last summer's increasingly likely prospect of a Trump win, after the Biden interview debacle...?

The geopolitical shifts might make for some unlikely bedfellows...

Just look at the Silicon Valley pivot !

;->

ATB

..'It Can only be a matter of time before we finally start getting a “direct mention” in mining circles..'

The lack of follow-up / dot-joining re RTZ's recent production report with its Pilbara rust implications - especially given Ivan's prescient 'Pilbara killer' description of Simandou - is a bit surprising.

FWLIW, I've sent a note to WoodMac and to 'seekingalpha' remarking on this.

Maybe someone could contact Ian Lyall / ThIsIsMoney and ask him what he thinks ?

;->

ATB

Still bubbling away...

Reuters

Glencore open to deals as investors brace for more mining M&A...

Mostly from a Cu perspective, but some comment/ context re industry dynamics.

GLA

Thanks for your considered comments, StarBright.

I think somehow we're talking about the same thing but from different perspectives : like 2 people each seeing part of something and not the whole picture.

And so we're talking past each other.

V frustrating.

Hopefully we'll have more detail/data soon!

ATB

.."I don’t see your point on “trashing”..."

I'm obv having a bad day in communicating ;-< !

It seems to me that there's already a bit of 'hot new money' that's bought in to the idea that something's about to happen, even we old timers (I speak only for myself) are feeling that 'maybe this time it's different'.

There'd be some disappointment on perceived 'bad' or not positive news...and folk at the margin may well sell.

Which would 'trash' the share price...in the short term at least.

'Voting machine' vs 'weighing machine'.

Hope that clarifies.

And, having seen StarBright's comment since above, if the bulletin board believes that the NPV ZIOC is contemplating as yardstick is based on 10%, that's by (reasonable) inference from the mathematical outcome stated in the updated Feasibility Study dated 30 April 2024 :

Net Present Value

Phase 1 Phase 2

US$ m 3,681 7,357

Internal Rate of Return %

26.2 28.2

As Jiving's comment shows, I'm not alone in believing that's Elphick's clear and stated position :

.."Ex, as both of us have noted from reading the IPO prospectus, Elphick is obsessed with securing NPV for the asset & seeks to build it into every aspect of the project he possibly can.."

ATB

And, having seen StarBright's comment since above, if the bulletin board believes that the NPV ZIOC is contemplating as yardstick is based on 10%, that's by (reasonable) inference from the explicit conclusion in the updated Feasibility Study dated 30 April 2024 :

Net Present Value

Phase 1

US$ m 3,681 7,357

Internal Rate of Return

%

26.2

28.2

.."ZIOC do not need to inform the market IF our BOD believes an approach MATERIALLY undervalues the company..."

Surely that can't be right : if the ONLY approach we get from an SI or SIs after all these months is a material undervaluation, then we've been misled as to how things are going, have we not?

Thanks for clarifying, StarBright.

(1) I phrased that badly.

What if Elphick were to say 'I've spoken with my Board [which the SI's would know includes at least 1 x GLEN NED] and sounded out our shareholders and the consensus view is that we'd need to see full NPV to be able to recommend..' or something similar [but non-committal/non-'triggering'] along those lines?

That would put the SI(s) on the spot, no? and force them to up their offer [I assume no point going hostile and making an unsatisfactory offer, given the GLEN and Guava/'Garbet' shareholdings ]. If they didn't, wouldn't ZIOC STILL have to notify the market of an approach, however 'unsatisfactory', given the 'materiality'...and the months of signalling we've had re SI progress...?

I imagine that would trash the s/p when the news broke, before subsequent recognition that ZIOC was likely actually in play.

(2) Would the regs require GLEN to wait until ZIOC has formally notified the market of an informal, but unsatisfactory offer? and GLEN then immediately/concurrently (to avoid said trashing) offer to tender for at least the initially suggested 7% (as a strategic, negotiating stake...or maybe to flip) at 'full NPV' ?

I imagine that this would have positive read-across implications for the market perception of the value of its existing 44% shareholding (and, of course, for all other shareholders).

Could ZIOC announce both developments in a single RNS? You can see my concern if it couldn't / didn't.

(3) Would GLEN's effective 'revaluation' of ZIOC by a tender for 7% (say) count as indirect 'manipulation' of its own shareprice, because of the positive read-across to the 'worth' of its existing 44% ?

Your (or any other ) informed views welcome!

TIA

Let me ask my question another way.

Does the team think that Elphick as presumed negotiator, having discussed the matter with GLEN, could say to the putative Strategic Investors ' Gentlemen, we'd really like to do business with you but you haven't yet met our price objective. I'm authorized to let you know that GLEN is prepared to make an offer for X, Y orZ % of Zioc shares it doesn't own at our required NPV valuation. That's our fallback but for various reasons we'd rather deal with you IF you can match those terms...'

Are there legal, regulatory or other reasons why that statement / threat would not be credible ?

It's the principle that I seek clarity on.

TIA

.."unless it was clearly in Elphick/ZIOCs interests to allow Glencore to increase ownership IMO it would be denied..."

Well, that depends on what others have offered, of course. If they have.

And GLEN may be interested in 'flipping'. At the right price...and given the timing implications of other scenarios...maybe even Elphick would just 'take the money and run'.

Esp if the 'money' was in GLEN shares, which under certain scenarios might be an appreciating currency...

Jes' saying..

ATB

.."They don't need to consolidate the accounts of ZIOC in their own accounts..."

Unless - for offence or defence - it becomes advantageous to do so.

I saw a list of miners by market cap the other day :

GLEN was at $ 56 Bn... and Ma'aden at $ 47 Bn (more than I thought).

Not that I'm suggesting that Ma'aden might want to buy GLEN, but it COULD...(from numbers if not people assets point of view)...

IF GLEN could engineer a 'revaluation' of ZIOC in the manner I suggested, how much would that add to its market cap ? If it tendered to get 51%...or if it bid outright for 100%?

Just 'spitballing'*

*N American 'throwing out a few ideas for discussion'.

GLA and ATB

Hi JIving,

Fortescue first trial shipment from Belinga (ex Owendo) in Dec 2023; FMG suspends activities /terminates CAPD drilling ops in summer 2024; tender for Belinga Mayumba railway : Egyptian / S African bidders 'in pole position' per Africa Intelligence Nov 2024...

Lots of moving parts.

Cheers