Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
If SASAC are indeed involved then a very large amount.
...this is the gameplay as I see it:
ZIOC and our Chinese EPC have completed the recostings and rewritten the 2014 Bankable Feasibility Study accordingly. This has met expectations sufficiently (recall the 20-25% costs reductions etc) to be passed along to what is euphemistically termed as 'peer review'. FWIW I consider this/ese 'peer/s' to be those that hold the investment purse strings and/or have the clout to authorise the substantial investment necessary. (There's also the geopolitics to be juggled).
Given their iron ore activities across multiple West African countries (Simandou being the headline example) coupled with their strategic imperative to secure ore ex-Australia I firmly conclude that said 'peers' are Baowu Steel and SASAC, Boawu's owners and ultimate Beijing masters. Of note at this point is that if this is indeed the case then the amounts involved must necessarily reach the order of magnitude of those employed at Simandou - $15-18bn. SASAC had to approve and sign off Baowu's involvement, including brokering finance from China Development Bank and the AIDB into the deal.
As of Wednesday last week Baowu chairman and execs were in Conakry, Guinea finalising Simandou's finances with Guinea's leadership. Thereafter, and perhaps even now given our by month end timeline, I expect Zanaga to be headlining.
Through 2023 Baowu Steel JVed with Saudi Aramco and the PIF on green steel in Saudi Arabia. Baowu's chairman and Vale's CEO, Eduardo Bartlomeo, also met at least twice and discussed tie ups on green steel and mineral investment opportunities. 2023 also saw Vale sign an MoU with AD Ports on Gulf green steel operations including pellet plants and infrastructure. The intriguing thing for us at ZIOC is that Vale and AD Ports also agreed to look at opportunities to own and manage VLOCs - the huge ships used to transport iron ore. AD Ports signed the MoU to develop at Pointe Noire, and their and Emirati infrastructure investment has been promoted to ministerial and Presidential levels just this month in Dubai. (BTW, did you know that Vale and AD Ports exec have just flown into Brazzaville from Dubai?)
The sweet spot of all the above factors and arrangements is Zanaga.
If the above really do all tie together, and they do all fit, then we could be looking at this dream team:
Vale, AD Ports and PSEI (EPC)
Baowu Steel
CDB, AIDB, PIF and ADQ.
So SASAC have been coordinating Baowu moves into African iron ore.
We now start to circle Zanaga..
Aug 2023. Baowu and Vale met and 'discussed cooperation in investment in mineral resources', this after Vale signed in May 2023 an MoU with our very own AD Ports for green steel mega hubs plus VLOC management and operations- CLOCs being the very large ore carriers that would be needed to transport Zanaga ore to the ME and China.
Meanwhile Baowu are JVed with Saudi Aramco and the PIF on a green steel hub in the Kingdom.
1. CHINA BAOWU WANTS NEW MODELS OF COOPERATION WITH VALE - AUGUST 3, 2023
The world’s largest steelmaker China Baowu Steel Group Corporation has held talks with Brazilian iron ore miner Vale on potential opportunities for future cooperation, according to an update on its WeChat account on Thursday.
Hu Wangming, chairman of the group, held a face-to-face meeting with Eduardo Bartolomeo, Vale’s chief executive officer, at Baowu’s headquarter Shanghai. ()
Both sides also discussed cooperation in investment in mineral resources as well as the research and development of the low-carbon metallurgical technology, it said without giving further details.
https://www.mining.com/web/china-baowu-wants-new-models-of-cooperation-with-vale/
2. AD PORTS GROUP & VALE TO JOINTLY DEVELOP LOW-CARBON MEGA HUBS FOR STEEL INDUSTRY
Abu Dhabi, UAE – 24 May 2023: AD Ports Group (ADX: ADPORTS), the leading facilitator of global trade, logistics and industry, announced today the signing of a Memorandum of Understanding (MoU) with the world’s largest producer of iron ore and nickel, and one of the largest logistics operators in Brazil, Vale S. A. (Vale), to develop a Mega Hub in Abu Dhabi for industrial complexes that produce low-carbon products for the steelmaking industry for both the local and seaborne markets, with a significant reduction of CO2 emissions.
The agreement will see an allocation of land and related services from KEZAD for the Mega Hub, in addition to the development and management of a state-of-the-art handling facility at Khalifa Port, capable of accommodating Valemax vessels with a handling capacity of up to 50 million tonnes of cargo per annum.
Furthermore, AD Ports Group will develop and manage conveyor infrastructure to transport iron ore and finished products to and from Khalifa Port and KEZAD, and will be exploring commercial collaboration with Vale on the marketing and sale of various bi-products of the manufacturing process in the UAE and the wider region.
The agreement also includes a maritime collaboration to explore opportunities related to management and operation of very large ore carriers (VLOCs) as well as other possible avenues of partnership.
https://www.adportsgroup.com/en/news-and-media/2023/05/24/ad-ports-group-and-vale-to-jointly-develop-low-carbon-mega-hubs-for-steel-industry
ZIOC investors should get themselves very familiar with SASAC who are, IMO, key to our immediate futures:
The State-owned Assets Supervision and Administration Commission of the State Council (SASAC) is a special commission of the People's Republic of China, directly under the State Council. ()
Significance - SASAC oversees China's SOEs in non-financial industries deemed strategically important by the State Council, including national champions in areas like energy, infrastructure, strategic minerals, and civil aviation.
The state-owned investment companies of SASAC serve as a mechanism through which the Chinese government can influence the market through the use of capital rather than government directive. - Wikipedia (1)
China Baowu Steel Group Corporation Limited is wholly owned by China's State-owned Assets Supervision and Administration Commission (SASAC) ...()...Baowu is fully owned by China's SASAC, which exerts control over the company's board and senior management and has strong influence over the group's major strategies and investment decisions. - Fitch (2)
6 Mar 202
CHINA SET TO APPROVE SIMANDOU IRON ORE PROJECT DEVELOPMENT
China's State-owned Assets Supervision and Administration Commission is close to approving the development of the giant Simandou iron ore project in Guinea, Bloomberg News reported March 5, citing people familiar with the plans. China intends to expand its footprint in West Africa and is interested in helping develop the deposit as it looks to secure more high-quality supplies of iron ore, sources told Bloomberg. SASAC has not formally approved the project yet and is working out the details of how to fund and proceed with the project, the sources said, adding that China Development Bank is likely to help with the funding, and the Asian Infrastructure Investment Bank is also being considered, Bloomberg reported. The commission is speaking with other Chinese state-owned enterprises to build port and rail infrastructure necessary to bring Simandou's iron ore to the market, according to the report. - SPGlobal (3)
> SASAC reports directly to the Chinese State Council, and overseas strategically important overseas industries. SASAC owns Baowu Steel, and it was SASAC who gave the 2020 go ahead for Simandou (before COVID intervened). SASAC was also involved in structuring finance with the likes of the Chinese Development Bank.
> I'm near certain that the Chinese EPC report has gone before SASAC and also BaoWu (the RNS's 'peer review').
1. https://en.wikipedia.org/wiki/State-owned_Assets_Supervision_and_Administration_Commission_of_the_State_Council
2. https://www.fitchratings.com/research/corporate-finance/china-baowu-steel-group-corporation-limited-09-03-2022
3. https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/china-set-to-approve-simandou-iron-ore-project-development-8211-bloomberg-5743624
This from Friday (paywall unfortunately):
FINAL STAGES OF FINANCIAL CLOSING FOR SIMANDOU UNDERWAY IN CONAKRY
As predicted by Africa Business+ in January, the different parties involved in the iron project are close to finalising the financial aspect of the development plan for the deposit. A delegation from Baowu Steel is also expected to arrive in Conakry today.
https://www.africabusinessplus.com/en/818954/final-stages-of-financial-closing-for-simandou-underway-in-conakry/
The Chairman and execs arrived in Guinea last Wednesday for meetings with the country's leaders and to finalise Baowu Steel's investments into Simandou.
> I'm certain that Zanaga is now cued up pending Simandou's imminent completion.
>> Of note again is that Baowu Steel are 100% owned by SASAC, the CCP's State-owned Assets Supervision and Administration Commission of the State Council.
A series of confirmations here that China must inevitably and imminently make their pitch for Zanaga:
CHINA’S BIG MOVE TO CUT OFF AUSTRALIAN IRON ORE
Beijing is spending big in order to “de-risk” itself from Australia in a move that could cripple Aussies.
It’s remote. It’s inaccessible. It’s poor quality. But Beijing is determined to spend big on a Sahara Desert mine to “de-risk” itself from Australian iron ore.
China Railway Construction Corp Ltd (CRCC) is one of the world’s biggest construction and engineering groups. It’s controlled by the Chinese Communist Party’s State-owned Assets Supervision and Administration Commission of the State Council.
Now it’s laying 6000 (sic) kilometres of new railway line across the North African Algerian desert.
It’s all about giving the Beijing-owned steel conglomerate Baowu control of the Gâra-Djebilet mine.
https://www.news.com.au/finance/business/mining/chinas-big-move-to-cut-off-australian-iron-ore/news-story/50eae131e0b7e6cb71966210dc78de68
1. No matter that the Algerian mine is poor quality (v. high phosphorous content) and remote (600km++ of rail needed), and part straddles a long running conflict zone, Beijing want the ore.
2. Any Algerian port is going to be a further 1,000km+ to ship to China than Simanadou in Guinea, itself a further 1,500km+ further than Pointe Noire for Zanaga.
3. Baiwu Steel - the world's no.1 steel producer leading China's Simandou involvement.
4. The involvement of SASAC, the all-important and powerful Supervision and Administration Commission of the State Council. SASAC is directly controlled by the CCP and directs strategic investments in ket resources amongst other roles.
> By my research, SASAC are very likely to be where our Chinese EPC's 'near-final' report into Zanaga is currently being approved. More on this as and when time allows later today.
Really? Oh. Moving on..
Let's think about this intelligently for a moment.
The US are after a NY flat that was bought in 2014 from alleged 2013 misdeeds and which since has never been occupied. I doubt Big D and his daughter give a stuff, frankly. If anything it will push them further into the BRICS++ camp. China have extended an invitation for President Nguesso to pay an official visit to Beijing this August and, as chronicled here, the week before last Sheik Maktoum proposed a State Visit to Dubai for President Nguesso at some point. The invite was made by the UAE minister for cooperation who had previously dealt with little d over AD Ports and who again reinforced the opportunities of infrastructure investment by the Emirates. This in Dubai where Big D and Co keep a number of properties. So, as I say, I doubt Big D gives a stuff.
The sideshow has got nothing to do with Glencore at all. They've positioned themselves as a minority shareholder in a resource project which is very likely to be sold to and developed by 3rd Parties, leaving Glencore with no direct dealings with Brazzaville.
The world has turned.
HOW GULF STATES ARE PUTTING THEIR MONEY INTO MINING
With Gulf nations raking in $400bn of fossil fuel revenues annually, but facing a future where hydrocarbons will be phased out, expanding into mining is a logical step. At the same time, Saudi Arabia and the UAE are investing heavily in new technologies and will need access to their own steady supply of raw materials.
“The Middle East is looking to diversify and has a war chest,” says Richard Blunt, partner at Baker McKenzie, the law firm that represented Zambia on the IRH deal. “They’ve got this massive advantage as they can do government-to-government deals and have patient capital yet come without the diplomatic pinch involved in choosing between Chinese and western investors.”
Under Crown Prince Mohammed bin Salman’s “Vision 2030” to modernise Saudi Arabia’s economy, mining and minerals processing are earmarked to become the third industrial “pillar” next to oil and gas and petrochemicals. “Nation building” is the main driver behind Saudi’s push, says Tim Keating, a former head of mining for the Oman Investment Authority.
> Then this on ports. ADP not mentioned but you get the drift:
The emirate of Dubai, a key precious metals trading hub, already has a large foothold in Africa’s ports and logistics network, the fortunes of which are closely tied to commodities. Dubai government-owned DP World has won port concessions in DRC and most recently Tanzania’s Dar es Salaam, a crucial shipping juncture for copper from Zimbabwe and Zambia.
“The majority of these resources are landlocked. There’s a huge opportunity to reduce the cost of the supply chain,” says Mohammed Akoojee, head of sub-Saharan Africa at DP World, which hopes to double the capacity of its terminals business in the next three to five years, including expanding bulk shipping.
https://www.chinastrategy.org/2024/04/01/how-gulf-states-are-putting-their-money-into-mining/
You cannot value Zanaga as a whole until the full extent of the Resource/Reserve is known.
$200m+ is loose change given that 30mtpa is $3.5bn++ every year.
If increasing the JORC Reserve trebles that RoM then ZIOC’s BoD will surely insist on further drilling as part of any investment package.
...and they are prepared to fund the necessary infrastructure
HOW NORTH AFRICAN RAILWAY IS ON TRACK TO HELPING CHINA DE-RISK ITS IRON ORE SUPPLY
Algeria’s Gara Djebilet iron ore mine has reserves of 3.5 billion tonnes that could help China de-risk its supplies of the steel raw material
Chinese state-owned CRCC is helping to build a vital railway to connect the mine to the Algerian national rail network
https://www.scmp.com/news/china/diplomacy/article/3257816/how-north-african-railway-track-helping-china-de-risk-its-iron-ore-supply
Hi V10 - I think that the FS update and the port are all but finalised, perhaps waiting on a ZIOC Board meeting before being signed off and released.
The Strategic Partner news is dependent on this; the size of Zanaga.
I think the Strategic Partner will sign an MoU to show their intent to earn in to and then finance the project at some stipulated time in the future. For our purposes the all important investment valuation will hinge on one factor - the ultimate size of Zanaga. To date the NPV is calculated on the proven reserve sufficient to deliver the staged 12-30mtpa project out to 30 years of production.
However that staged project is predicated on a small fraction of what could be at Zanaga. The ultimate Reserve could be 5, 8 or even 10 times the current JORC. So....I think the Strategic Partner MoU will include the central stipulation that the Partner will fund an extended drill campaign to prove up even more of the Resource into the Reserve category.
This means that we will have to be patient for our eventual jackpot. I have numbers for that eventuality. However and in the meantime an outline of their intentions could and should be worth an immediate SP of £3+.
More detail from last week's Dubai meeting between President Nguesso and the Emirati minister for International Cooperation. Front page and P.16 of today's 'Dispatches from Brazzaville' newspaper.
The Dubai Minister extended an official invitation from the Emir to Big D, having talked of direct Emirati investment into C-B and the establishment of direct flights by Fly Emirates.
https://www.lesdepechesdebrazzaville.fr/flex/php/simple_document.php?doc=20240409_DBZ_DBZ_ALL.pdf
Some more here on twitter:
Présidence de la République du Congo - Officiel @PR_Congo
L’ ouverture d’une ligne aérienne directe Dubaï -Brazzaville par la compagnie Fly Emirates est à l’étude. Cette annonce a été faite par les autorités émiraties au Président @SassouNGuesso_lors de son court séjour à Dubaï après sa visite officielle à Bakou.
https://twitter.com/PR_Congo/status/1777709278620512711
A report today from Bloomberg that 'Simandou' funding has been signed, having received approval by 'Chinese regulators'.
'...The signing occurred on April 2 after approvals came from the country’s transitional parliament and Chinese regulators, Guinea’s presidency said in a statement on X.'
https://www.bloomberg.com/news/articles/2024-04-09/guinea-partners-get-15-billion-funds-for-top-iron-ore-deposit
Correlates with my post in here (above in thread), from 4th April, that the 'near-final' report of our Chinese EPC is likely waiting on official, Beijing approval - and hence the March tour of Chinese projects in Congo by the Chinese Ambassador.
Given the above, has the EPC report also been approved by Chinese regulators? Are Zanaga investment and development now at the country-to-country level? Does this explain the radio silence from the ZIOC BoD, Marty and Trahar? I reckon so.
> News slated for within the next 3 weeks.....
FWIW I don't think our new CEO Marty will be making official comment until news flow is released. The reason being is that next developments (FS, port and Strategic Partner/s) are likely dependent on Government-level events, for example the ratification of the CB-UAE CEPA trade deal to free up any AD Ports deal on a mineral port.
However...Marty has been active on LinkedIn and his 'likes' are a checklist of people and companies that together indicate much activity behind the scenes on a corporate level. Marty has liked:
Manara Minerals,
Saudi Arabia's Deputy Minister of Industry and Mineral Resources for Mining Affairs, Eng. Khalid Al-Mudaifer who was CEO of Ma'aden and is now on the BoD of Manara Minerals,
AD Ports several times, plus
Green steel financiers and institutions.
There're also these, which are very specific to mine development:
AMC Consultants - Strategy optimisation for miners (think EPP perhaps),
International Facility Services - mining camp facilities and management across Africa,
Stanton Chase, executive search with expertise in Natural Resources, Mining and Energy, and
Steyn Reddy Associates - Global Leaders in Land Access & Resettlement
https://www.maaden.com.sa/en/about/bod
https://www.amcconsultants.com/just-how-optimal-is-optimal
https://www.ifsafrica.com/
https://www.stantonchase.com/expertise
https://steynreddy.com/
> All of which give an insight into ZIOC's work streams, thinking and planning.
Reading between the lines of our last RNS, the port discussions are well advanced - (see RNS below). Better still is news from last week that Big D met with the UAE minister in Dubai and who again plugged UAE infrastructure in the Congo...
RNS, 28th March 2024:
PORT MOU: Significant progress has been made in securing interest from large scale port development companies interested in participating in the development of port infrastructure for the Zanaga Project. In parallel with the 2014 FS update process, these discussions are progressing.
>Significant progress, companies plural, and does 'parallel with FS update' mean the end of this month as well as the FS?
UAE MINISTER REEM AL HASHIMY
On twitter there was a tweet yesterday (1) that detailed a meeting last week in Dubai between Bid D and the Emirati Minister i/c of their infrastructure projects in the Congo. Last October (2) the same minister, Reem Al Hashimy, met with little d when they specifically discussed AD Ports, and in which little d requested the UAE to guarantee its success:
(1)
H.E. Denis Sassou Nguesso, PR of Congo, met on 06/04 with a delegation from Expo City Dubai Authority, led by its CEO, H.E. Reem Al Hashimy, Minister of Coop. of the UAE. The meeting focused on the common desire to carry out infrastructure projects in Congo.
https://twitter.com/Boukary2016/status/1776731085994328535
(2)
This October 6, at #Dubai Expo City, Minister Denis @ChristelSassou Nguesso had a working meeting with HE Reem Ebrahim Al Hashimy, UAE Minister of State in charge of #Coopération International....The two ministers also discussed the ongoing collaboration between Congo and @ADPortsGroup regarding the construction project of a state-of-the-art multipurpose terminal within the autonomous port of Pointe-Noire. After reviewing the progress of the said project, Minister Denis @ChristelSassou Nguesso requested support from the UAE government to guarantee its success.
https://twitter.com/CooperationCG/status/1710358575908786349
>> Did the UAE minister last week plug AD Ports with Big D? The evidence suggests she did.
Mitch, your 'probably already had a big influence in AD Ports involvement' - is itself pure speculation! There is no evidence whatsoever that ADP and KP2 have any relationship, let alone KP2 influencing anything. None. Pure speculation. Besides, there isn't any mineral port that can have been influenced! AD Ports have signed a MoU to build a new mole down at PAPN. As far as we know this hasn't commenced nor any customers been revealed. None. So your comments are fantasy.
Yet you label as 'pure speculation' anything other than Chinese involvement at Zanaga. Well, that is errant nonsense as well. Trahar revealed that FMG were interested some years back, and now ZIOC reveal that they have Strategic Partners interested - that's PLURAL. So entities other than the Chinese. Thus everything else cannot be just 'pure speculation'. You are way out there, by logic and in the company's own words.
There's Manara Minerals, for one. They are specifically tasked to secure iron ore for the Saudi green steel industry, where only iron ore of Zanaga's grades will suffice. It is ABSOLUTELY INCONCEIVABLE that Bob Wilt, the PIF or Ma'aden don't know of Zanaga or have it on their radar. Zanaga exactly fits the requirements of what is a strategic industry for them - large, high grade, shovel ready and not owned by one of the mayors. Their interest would never be confirmed by ZIOC, but that doesn't relegate it to speculation. No rationale observer would conclude that for a moment.
Back on KP2, it has fallen by 95%+ since their 2018 IPO and has a further 20% to reach the 0.38p level of the March CLN fund raise. We all know that many accounts jumped out of ZIOC and into KP2 (and KRPZ) when the AD Ports MoU was signed - on the principle that a rising tide floats all boats. This was enthusiastically touted on ZIOC's bb. I was able to watch the paired trades go through as well - sells on ZIOC and buys for the equivalent on KP2. It was tragic-comic to then read the ZIOC posters then turning up on KP2 - then and now. It's now obvious that the rising tide didn't float all boats, and those rainbow chasers are sitting on capital losses. That doesn't excuse making false equivalences now between ZIOC and KP2. One is the organ grinder, the other the monkey - one with 4.12bn shares in issue already and inevitably more to come. Look out below.
That is a very weak analogy Mitch984.
The development of the green steel industries in the ME, the ensuing demand for high grade iron ore and the establishment of highly capitalised entities to secure such ore is *HIGHLY RELEVANT* to Zanaga, as could well be the supply response of Vale, the world's 2nd largest supplier of seaborne iron ore, who missed out on Simandou and yet still have 'African' ambitions. What's more the story of high grade demand from such companies has been recognised by Zanaga's BoD and executives, new and old. Analysis of this major market trend is integral to the ZIOC investment proposition.
I much prefer this to the mediocre tedium and insipid growth pangs of mid-tier (potentially) fertiliser mine whose project cannot stand alone and has to piggy back off world class propositions to secure infrastructure.
So I prefer the 'latter' over KP2's 'real news' (barely contained derision), Eddsy is quite right.
She was doing due diligence on in country and on the ground business conditions. 100%, and 100% that her findings feed through into the Chinese EPC engagement at Zanaga.
I think you are onto something there, nibj.
For example the new, improved FS plus Chinese EPC inclusion would all be great - BUT would remain theoretical unless the port had also been agreed, and hence the project unstranded. On the milestones the port MoU was scheduled ahead of any MoU on Strategic Partner/s. Perhaps that's what we are all to expect?
Whatever the case (port MoU, senior Chinese approval etc) the positive is that the Company have committed to this month for the update. Fingers crossed.