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The giant Chinese steel conglomerate has to be in the frame as one of the strategics for Zanaga development.
Back in May they teamed up with Aramco and the PIF for a huge new mill at Ras Al-Khair, in Saudi. Of note is that Bandar al-Khorayef was instrumental in settling up RaK, whilst he also met with Gary Nagel of Glencore in Geneva in May.
Further underlining the pas-de-deux, Bandar al Khorayef met with Baosteel in Shanghai on September 25th just gone. Wang Ming being the president of Baowu, the whole corporation:
SAUDI INDUSTRY MINISTER CONDUCTS MEETINGS WITH CHINESE MINING COMPANIES
During his meeting, Bandar Alkhorayef consulted with the chairman of CMOC Group, Yuan Honglin, to explore potential opportunities within the natural resources sector. The assembly touched on the utilization of accumulated experience in mining and processing, including smelting and refining of both essential and rare metals, according to the Saudi Press Agency.
Alkhorayef also spoke on different topics related to the iron and steel industry with Wang Ming, a senior figure from Baosteel.
https://www.arabnews.com/node/2380086/business-economy
As yet, the Saudis have not secured a single shovel full of iron ore to feed their green steel endeavours. Next week's FMF in Riyadh marks 1 whole year since the PIF-Ma'aden JV was formed specifically to secure global supplies of the necessary high grade iron ore. I think it hugely unlikely that they would be prepared to let the anniversary come and go with no visible progress.
I wonder what 'significant announcement' Bandar al-Khorayef was hinting at when in Japan?
Meanwhile....
Shard continue to sell down tranche 2. Yesterday we saw a further 1.6m of larger delayed trades through the day. This, IMO, is an orchestrated placing of the shares in 'informed' hands. The trades (demand/supply) are broadly matched in size and time strongly suggesting that Shard are maintaining an orderly market for others to buy in.
One trade was particularly telling, the purchase of 250,000 at 9.89p at 16:23. Given that the market was 9.00-9.25p at the time then someone, somewhere didn't really care what the offer was - they just wanted in.
Their is clear and obvious conflation between what Bandar al-Khorayef actually hinted at (his words were never reported) and what the journalist assumed he was hinting at.
Given that the Saudis have openly flagged the restatement of their minerals reserves at the upcoming FMF it is ****EXCEEDINGLY UNLIKELY**** that they would be the subject of hints - THEY ARE ALREADY IN THE PUBLIC DOMAIN.
Now, Jiving, as stated several times before, your natural habitat is the other board.
Oh dear, at least 3 other muppets cannot read.
Oh my - you really can't read, and are a disruptive, little ****
How triply unfortunate that Jiving, extrader's personal serf, has seen fit to repeat his master's stupidity on this board. As can be read, by anyone with a functional intellect, the restatement of Saudi's mineral reserves has been heavily trailed for the upcoming FMF. That being so their revelation can hardly be '...the hinted at a significant announcement'.
But you do you, Jiving - or is it wormtongue?
Saudi Arabia recalculates mineral wealth, new value to be unveiled in January: Alkhorayef
19/12/2023
'...Saudi Arabia is recalculating its mineral resources to create a new value, different from the previous value of $1.3 trillion, Bandar Alkhorayef, Minister of Industry and Mineral Resources, told the state-run Saudi press Agency (SPA).
"We will announce our new estimate of the mineral resources in Saudi Arabia during the International Mining Conference, which will be held next January," Al-Khorayef said
https://www.argaam.com/en/article/articledetail/id/1692633
> Which leaves the 'hinted at a significant announcement at the FMF' up in the air.....
.....fortunately.
What could Saudi Minister for Mines and Industry, Bandar al-Khorayef, possibly have in mind?
'RIYADH: Saudi Arabia’s minister of industry and mineral resources has concluded his three-day official visit to Tokyo, highlighting the Kingdom’s commitment to fostering economic ties with Japan.
During the visit, Bandar Alkhorayef emphasized attracting investments to contribute to the Saudi industrial and mineral sectors.
As the Japanese investors’ roundtable discussions commenced, the minister expressed optimism about the Kingdom’s potential as a hub for green metal investments...
He (Al Khorayef) HINTED AT A SIGNIFICANT ANNOUNCEMENT AT THE FUTURE MINERALS FORUM NEXT MONTH...'
https://www.arabnews.com/node/2429566/business-economy
Great backdrop for a deal:
Iron ore prices climbed to multi-month highs on Tuesday, with sentiment boosted by upbeat economic data in China and mounting expectations of a flurry of pre-holiday replenishment from steelmakers in the coming weeks.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trading 2.93% higher at 1,002 yuan ($140.58) a metric ton, the highest since August 2021.
Sign Up for the Iron Ore Digest
The benchmark February iron ore on the Singapore Exchange climbed 2.35% to $142 a ton, as of 0700 GMT, the highest since June 2022.
https://www.mining.com/web/iron-ore-price-climbs-to-multi-month-high-on-upbeat-chinese-data-expectations-of-restocking/
An interesting RNS first thing morning which, I think, has to be read in 2 parts.
The first is that the Shard facility has been used to both part-repay the loan and, from last month, to also to provide on-going working capital. This is most likely at the insistence of the NomAd to meet AIM rules and regs. No matter what the immediate prospects, a bird in the hand is worth two in the bush. As per my cals last week, I think Shard have perhaps 5m left of T2 which, at 23p, would be enough to wipe out the balance of the Glencore loan.
Secondly and with all of that said, I do think ZIOC and GLEN have just been ticking AIM boxes. The rest of the RNS is very positive. Rolling the loan just until end 1Q24 shows confidence that the alternative funding (MUCH bigger!) will soon be in place. ZIOC say as much:
'...ZIOC is pleased with the ongoing progress being made in advancing discussions with potential partners, and as part of ZIOC's strategic objectives has already recently concluded an MoU relating to power solutions for the Zanaga Project. We look forward to progressing further strategic initiatives in early 2024."'
> '...ongoing progress..to strategic initiatives in early 2024.'
>> Really does feel that everything is coming together for the FMF next week in Riyadh.
'....Since Saudi Arabia was selected to host the World Expo 2030 on 28 November, Chinese investors have been flocking to the kingdom looking for steel investments, Kallanish learns from investigation.
"Chinese steel companies' profit margins in China and their subsidiaries in Southeast Asia and the Far East, especially in recent years, have been eroded, so they were looking for new investment opportunities in the fossil fuel-rich Gulf Cooperation Council member states," opines an investment adviser and consultant in China.
( )
A senior steel company official asks Kallanish: "I WANT TO UNDERSTAND WHY FOUR CHINESE STEEL COMPANIES HAVE VISITED ME IN THE PAST TWO WEEKS to form a partnership or JV in the tube-making sector. What was their driving motivation that coincided in the past two weeks?" '
https://www.kallanish.com/en/news/steel/market-reports/article-details/chinese-investors-shower-saudi-arabia-for-steel-investment-1223/
(cough): SAUDI ARABIA WILL LEVERAGE ITS FINANCIAL CAPABILITIES TO SECURE EQUITY INTERESTS IN MINERAL-RICH MINES IN AFRICA
Dec 26, 2023 05:19 Source:SMM
Japan and Saudi Arabia to Cooperate on Procurement of Important Minerals The Ministry of Economy, Trade and Industry of Japan announced on the 25th that a memorandum of cooperation has been signed with Saudi Arabia to ensure the stable procurement of important minerals required for electric vehicles (EVs) and batteries. SAUDI ARABIA WILL LEVERAGE ITS FINANCIAL CAPABILITIES TO SECURE EQUITY INTERESTS IN MINERAL-RICH MINES IN AFRICA, while Japan will strive to ensure the supply of nickel and lithium and promote cooperative investment.
https://news.metal.com/newscontent/102548621
Nice spot, V10. Our Saudi Minister, Bandar Al-Khorayef, recently spent 3 days in Japan with a high level delegation discussing all things mining and industrial.
I have a hunch that the Saudis are going to lead the Gulf States in producing green steel metallics (DRI and HBI) for re-export to Japan and others. That would let the Japanese circumvent US and EU carbon levies.
We'll see, of course, but if that's the path they are looking to go down then collectively the Gulf States will need all of Zanaga and then some.
Very exciting times.
Market News: Zanaga Iron Ore surges 20% as Congo hydro-power agreement signed.
Mark Rogers, December 28, 2023
ZANAGA SHARES HAVE NOW DOUBLED IN 2023 AS EXCITEMENT BUILDS AROUND THE PROJECT.
Zanaga Iron Ore Company
Shares in Zanaga Iron Ore Company (LSE: ZIOC) jumped over 20% on Thursday morning after the firm revealed it has penned a landmark clean energy agreement with China Machinery Engineering Corp.
The iron ore explorer, focused on the Republic of Congo, signed a memorandum of understanding with CMEC to advance engineering and funding plans for new hydroelectric facilities close to Zanaga’s namesake project.
Zanaga said CMEC will now complete further inspections and studies on the proposed hydro sites near Zanaga before drafting proposals on how the dams will be financed between Congo’s government and third parties.
The AIM-listed miner also updated investors that a feasibility study with an unnamed Chinese partner is progressing well and has already identified chances to reduce costs versus previous plans.
ZANAGA SHARES HAVE NOW DOUBLED IN 2023 AS EXCITEMENT BUILDS AROUND THE PROJECT.
https://www.investomania.co.uk/zanaga-iron-ore-surges-20-as-congo-hydro-power-agreement-signed/
Hi nibj.
I'll stick with the sells coming from Shard - largely because Clifford Elphick has said as much. This from 3rd July when the Shard facility was detailed. Clifford Elphick, Chairman of ZIOC commented:
'...This transaction (Shard) enables ZIOC to secure capital in the future as the project progresses and further milestones are achieved.'
A Hydropower MoU was one of the 4 milestones (actually scheduled for 1Q24) as was the EPC recostings (4Q23) which were also reported complete this past week.
> So 2 of the 4 milestones achieved and which CE specifically said would allow Shard to raise capital. So, unless someone has a very compelling alternative, it is Shard.
>> I've been watching the price action like a hawk (and I do have considerable experience of this) and I think Shard sold as much as 4m shares post 'CMEC' to add to the 3m of last week. If so then a hefty chunk of T2's 12m has been placed. I reckon they have raised c.$800,000 for ZIOC, either towards working capital or against the GLEN loan.
More larger, delayed trades:
667,000 from today, plus a further 380,000 and a 140,000 from yesterday.
For yesterday and today a total of 2.69m of supply in just larger blocks. Plenty more 'at market' and reported in real time. Shard working overtime.
FMF24 starts in Riyadh on 9th January to 11th.
There are only 5 trading days between now and then.
I wouldn't want to be out of this over 2 weekends and the New year.
One more 'tell' in yesterday's RNS that deserves a mention, '...third Parties.'
o Following CMEC's preliminary inspections and engineering of potential hydroelectric sites near the Zanaga Project, an MoU has been agreed between ZIOC and CMEC with the following objectives:
o Advance engineering and related studies for the identified hydroelectric sites near the Zanaga Project.
o Draft arrangements for the funding of development and operation of the identified hydroelectric project(s), between the government of the Republic of Congo and ****third Parties****.
> These will almost certainly be supra national finance institutions, think IFC (World Bank), AfDB, and the likes of Afreximbank.
It was Afreximbank who, last month, extended a $96m facility to Zanaga's near-neighbour Sapro-Mayoko, with the prescient observation about, 'rapid development of iron ore in the Congo'.
What do they know, huh?!
There were 13 delayed reports today for a total of 1,499,000 shares (c.£157,000). I'm chalking them down to Shard supply into today's positivity - (hydropower milestone achieved).
Watching the price action I think they stepped in after the early break above 11.00p and supplied stock all the way back down to 10.00p through the day. By a very rough reckoning, all in they could have supplied 3m shares today, adding to my estimate of 3m of T2 already supplied.
Recall Clifford's comments on the new facility on 3rd July: Clifford Elphick, Chairman of ZIOC commented:
'...This transaction enables ZIOC to secure capital in the future as the project progresses and further milestones are achieved.'
Well, hydropower was one of said milestones (coming here in 4Q23 ahead of the 1Q24 then projected).
Anyway, T1 of 12m is done, and I estimate 6m of T2's 12m already sold. T3 is entirely elective.
As for the Glencore loan, due tomorrow, this from 29th September just gone:
Cash balance of US$0.6m as at 30 June 2023 and cash balance of US$0.5m as at 31 August 2023.
o Current available cash on hand is expected to cover ZIOC's corporate overheads until end Q1 2024 assuming an extension of the term of the current facility from Glencore which is currently due to be repaid on 31 December 2023, with current SMC facility placement expected to extend ZIOC working capital into Q3 2024 following that extension.
> I reckon ZIOC, GLEN, and the NomAd will be quite happy with the situation so far.
The news that CMEC is looking at hydropower for Zanaga is hugely positive and a massive tell that development is nigh. There's also the kicker that hydro is 'green power', thereby helping along the whole green steel value chain.
However I think we may have missed the most important part in today's update, the part on the EPC costings:
CHINESE EPC PARTNER FS UPDATE PROGRESS
o The initial review and re-costing phase of the 2014 Feasibility Study ("2014 FS") has been completed, indicating potential cost reductions versus the 2014 FS.
o The market enquiry and financial modelling phase 2 is underway and will now be extended into Q1 2024 given the comprehensive nature of the update.
> The EPC came in as promised by the end of 4Q23, and then ZIOC have pressed quickly on, and here is an absolutely reveal:
'...MARKET ENQUIRY...IS UNDERWAY...'
>> This will be ascertaining actual demand and pricing for Zanaga product: pellet fines (66%Fe rising 68.5%Fe), cold pellet prices, and green premiums for the whole. In turn this will feed directly into both an updated NPV *AND* hence ZIOC valuations for incoming Strategic Investors.
>>> 100% they are looking to get this all done by the upcoming FMF in Riyadh this January - without a doubt.
Things were equally silent in equity updates, with Zanaga Iron Ore announcing it had signed a memorandum of understanding with China Machinery Engineering Corporation (CMEC) for hydroelectric power solutions at the Zanaga Iron Ore Project.
The firm said the agreement aimed to advance engineering studies for hydroelectric sites near the project and establish funding arrangements between the Republic of the Congo's government and third parties.
Additionally, Zanaga reported on progress of its feasibility study update with its Chinese EPC partner, indicating potential cost reductions compared to the 2014 study, with the second phase extending into the first quarter of 2024.
https://www.voxmarkets.co.uk/articles/london-pre-open-stocks-set-for-another-positive-start-feaa1a7/