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Perhaps of some relevance:
#PIF successfully completed the pricing of a $5 billion Reg S international bond offering, under its Euro Medium-Term Note Program. This is in line with its strategy to continually diversify its funding sources.
https://twitter.com/PIF_en/status/1750844761974477197
The offer was more than 5x oversubscribed at $27bn. It's the maturity schedule that interests me:
$ 1.75bn 5-year to 2029
$ 1.75bn 10-year to 2034
$ 1.5bn 30-year to 2054
That aligns nicely with Zanaga timelines.
...and the FT are FINALLY getting on message.
We've discussed this in here for some months now. The future of 'steel', what with carbon taxes (i.e. the CBAM in the EU) and all the rest of it, is for iron ore to be reduced (the oxygen stripped off) in regions where they have copious supplies of natural gas and then renewably-produced hydrogen. Then the hot briquetted iron (HBI) can be re-exported into the likes of the EU, evading the carbon taxes, and then EAF-processed into steel.
This points squarely at the Middle East, where their existing natural gas supplies are soon to be complimented with large-scale, industrially produced hydrogen from solar and wind farms.
This DRI - (HBI) - EAF route demands Zanaga-grade iron ore.
Zanaga has to be sitting squarely in the cross hairs of forward looking strategic investors in the ME and elsewhere.
EUROPE CAN STILL AVOID THE COMING ‘GREEN STEEL’ CRUNCH
Moving clean energy around is an oft-touted solution but steelmakers might also wish to rethink their inputs
This may make sense in some locations, but not everywhere. Building DRI facilities is not sufficient. Running these requires green hydrogen, made using renewable power. In much of Europe, that will be expensive.
Moving clean energy around is an oft-touted solution. But steelmakers might also wish to rethink their inputs. REDUCE IRON ORE WHERE GREEN POWER IS CHEAP, AND THEN SHIP THIS TO STEEL MILLS.
https://www.ft.com/content/ffaae533-b555-4a40-8b77-d0dda278b874
Wood Mac are starting to get into the nitty gritty of green steel making, and the demand for DRI-grade iron ore. At some point all the dots will be joined up and, I'm certain, Zanaga will start being mentioned in the same breath as Simandou.
30 January 2024: WHAT’S NEXT FOR GREEN STEEL TECHNOLOGIES?
Exploring alternatives to scrap, high-grade iron ores and current steel production routes
Potential hubs for DRI-based steel
'...We foresee seven potential hubs for DRI-based steel production by 2050. Each will have a distinct technological mix and development timeline. The Middle East, China, Australia and Europe are likely to lead DRI capacity additions. The US and Brazil will see some traction, but high scrap use may dampen DRI demand. We expect India to shift from coal to gas-based DRI only gradually, limiting its potential contribution to green steel production.
Making the green steel revolution happen
Decarbonising the global steel industry is complex and will require technological innovation, policy support – including robust carbon taxation and alluring green incentives – and significant investment. The rollout of green steel will be dependent on multiple factors, including iron ore quality, hydrogen and natural gas availability, renewable energy sources, the intricacies of carbon pricing, and the legacy of existing steel frameworks....'
https://www.woodmac.com/news/opinion/whats-next-for-green-steel-technologies/
...they really are!
Overnight we have had confirmation from Brasil of the swingeing fines levied out to BHP and Vale over the collapse of their Samarco tailings dam in 2015:
https://www.mining.com/brazils-justice-orders-vale-bhp-and-samarco-to-pay-9-7-billion-in-damages/
Now the ramifications of this and the other tragic dam bursts are seriously impacting Vale's operations and expansions in Brazil. Not only do their prospects extend deeper into the Amazon and are subject to increasingly restrictive permittings, but also new tailings dams are being banned. This is thought to be driving Vale's hunt for overseas opportunities for iron ore expansion (think Zanaga, and after their Simandou escapes).
Meanwhile ZIOC's likely iron ore beneficiator and pipeline specialist, PSEI, are claimed specialists in just this area. Their YouTube video, courtesy of 99icecream, details their proprietary Dry Fines Magnetic Separation techniques. These produce no liquid waste and hence completely bypass the wet tailings dam issues, and all the regulatory and ESG complications.
Check out IRON ORE DRY PROCESSING, @ 1:11 to @1:38, slides 11 to 15:
https://www.youtube.com/watch?app=desktop&v=NulWSEReWeY
Better again is that PSEI claim 40-50% OpEX savings on these processes (on top of those ESG and regulatory benefits)- slide 15.
For me the whole Zanaga project just becomes more and more compelling.
Quite so, alwayshoping. Without delving back I think I recall the phrase, 'game changing...in due course' being used by Bandar al-Khorayef's deputy.
If we are right in surmising that Bob Wilt was referencing Zanaga wrt to off take trading, and given the projections of Saudi and Gulf green steel production, then it would imply that they (MM) are after a larger slice of a larger pie. We shall see, of course, however only larger slice of a larger pie would likely cause issues for Glencore if they were seeking to maintain a controlling influence on Zanaga pricing. Once into the magnetite (Stage 2) and with the global push on green steel, then 30-60mtpa of 68.5%Fe would command a super premium. Glencore wouldn't want Manara Minerals side deals upsetting that very lucrative applecart.
All conjecture for now. However if so, and it doesn't seem overly speculative, then it would indicate that we are into the nitty gritty of a blockbuster deal.
Fingers crossed.
Of course Glencore could see themselves over-written on the LoM marketing agreement...
(m) If there is a direct or indirect change in ownership of MPD amounting to 50% + 1 share or more of the issued share capital of the relevant target entity, and, following such change in ownership, MPD notifies Glencore International in accordance with the terms of the Marketing Agreement that it wishes to cancel the Marketing Agreement and enter into a new life-of-mine marketing agreement (a "New Marketing Agreement") in respect of 100% of the production of the Mine with the relevant investor or its Affiliate (a "New Buyer"), then Glencore International may notify MPD, subject to the terms and requirements of the Marketing Agreement, that either:
(i) it shall match the terms of the New Marketing Agreement, in which event the parties shall discuss and agree in good faith such minimum amendments required to the Marketing Agreement to align with the key commercial terms agreed between MPD and the New Buyer under the New Marketing Agreement; or
(ii) it agrees to the termination of the Marketing Agreement, in which event the Marketing Agreement shall be terminated upon execution by MPD of the New Marketing Agreement and thereafter Glencore International shall be entitled, for the term of the New Marketing Agreement and / or any replacement or supplement to such agreement, to receive a fee in each calendar month by way of consideration for the initial marketing role played by Glencore International under the Marketing Agreement ("Royalty"), and
the Marketing Agreement shall be terminated only upon execution of the Royalty by Glencore International and MPD in a form acceptable to Glencore International acting reasonably.
Now this is getting most interesting and relevant, and likely throws light on Bob Wilt's (Manara Minerals' CEO), comments at the FMF. Wood Mac assessed this today:
'..The Middle East can also play a critical role in decarbonising steel due to its technological edge in producing direct reduced iron, cheap renewable energy and natural gas, available land, and existing trade and logistics networks. The announced mega hubs to supply iron ore (sic) will help provide supply of high-grade agglomerated products and unlock a new ecosystem. In fact Wood Mackenzie estimates that THE MIDDLE EAST COULD ACCOUNT FOR AROUND 30PERCENT OF GLOBAL DRI PRODUCTION BY 2050, WITH THE POTENTIAL TO BECOME A GLOBAL TRADER OF GREEN FERROUS METALLICS.'
> Wood Mac are engaged by the Saudis so, we can assume, they know the inside track of Saudi intentions, i.e. to foster their green steel industry to become a global leader (so much we figured out in here many months ago, of course).
>> But this it where it gets interesting and throws light on Wilt's comments at the FMF, as initially reported by Reuters.
“We envision Manara having a trading arm,” Manara Acting CEO Robert Wilt told Reuters in an interview on the sidelines of the Future Minerals Forum (FMF) mining gathering in Riyadh.
“Our fist phase of setting up the company is get the investment rolling, but all of these investments are predicated on an offtake… so there is going to be some level of trading to manage the books of offtake minerals we have,” he added. In an offtake deal, a buyer usually agrees to buy a portion of the producer’s future output. “We are not envisioning going into competition with Glencore or Trafigura, our vision is just to manage our own book,” Wilt said.
https://www.mining.com/web/saudi-arabias-manara-minerals-fund-plans-metals-trading-arm/
>>> However..Manara Minerals are reportedly limited to a 20% interest in any mining asset. So consider then the numbers for Zanaga.
20% of 12mtpa (Stage 1) is 2.4mtpa of iron ore, which produces a meagre 1.5mtpa of steel. Not enough to trouble anyone.
20% of 30mtpa (Stage 2) is 6.0mtpa, or enough for 3.75mtpa of green steel. Still *WAY* below current Saudi steel estimates even without future growth.
Now....in order for the Saudis (and ME) to account for 30% of green ferrous metallics by 2050 (as per Wood Mac today) they would need several times Zanaga's 30mtpa.
All of which suggests, and because Glencore appeared vexed, that Manara Minerals want more than 20% of Zanaga and that their ambitions stretch all the way to 60mtpa.
Have Wood Mac responded to pressure, or do they now realise the inevitability of DRI for green steel, and hence the Zanaga imperative?
DRI IN STEELMAKING
Join our experts on Thursday, January 25th at 8:00 EST for an interactive discussion where they will uncover the technical aspects, opportunities, challenges, and the competitive landscape of key #greensteel making technologies.
Register now: https://okt.to/ZOXYAh
https://twitter.com/WoodMackenzie/status/1750232027175985406
Exactly, alwayshoping, the giant elephant in the room...
Who's got a huge DRI-grade iron ore deposit? Anyone...?
Microsoft and Volvo:
'..The companies point out that the 2 million tonnes pledge represents the annual output of an average-sized steelmaking plant. By pooling demand, they hope to accelerate a commercial shift towards sustainable steel.
The Sustainable Steel Buyers Platform was established to build a bridge between potential green steel buyers and steel manufacturers. The latter will have to make enormous investments retrofitting existing steelmaking plants – or build new ones.'
https://recyclinginternational.com/business/microsoft-signs-off-on-initial-green-steel-order/55904/
...if the world's financiers are going to turn off the money spigot for coking coal:
AT A GLANCE
Dutch bank ING is to phase out dedicated financing for new unabated steel blast furnaces and for the extension of existing unabated blast furnaces, as well as new coking coal mines, or the expansion of existing ones
With major international banks like ING, BNP Paribas and HSBC ruling out finance for new metallurgical coal mines, NGOs say blast furnace operating steelmakers should be concerned about their access to future finance and metallurgical coal supply
NGOs called on other banks that are signatories to the Sustainable STEEL Principles to adopt similar measures, saying ING’s new commitment on steel sets a minimum standard
https://www.thebanker.com/Dutch-bank-ING-sets-the-pace-in-decarbonising-steel-1705566687
> Sooner or later the net zero nutters will do the same for the whole steel value chain, from iron ore to finished goods.
>> The only practical solution (given the huge, ongoing demand for primary steel that cannot be met by recycling) is high grade iron ore (67%Fe+) to feed the DRI-EAF steel route - and that means Zanaga.
Exactly alwayshoping! And there are those magic words again, '...strategic partner' - as per ZIOC for some months now:
'...At a time when Tokyo confirmed its strategic relations with Riyadh, it revealed a joint Saudi-Japanese approach through the launch of joint investments in several countries. These countries are scattered all over Africa, Asia, and Europe, reported Nabd.
This initiative aims to maximize supply chains in the field of mining over the next two years. Moreover, a senior Japanese official emphasized that Saudi Arabia is Japan’s largest strategic partner.
The Japanese Minister highlighted that the results of the “Saudi-Japanese Investment Forum 2023,” which recently ended in Riyadh, were positive.'
You're on fire today, alwayshoping!
Japanese interests seem to be coming with a late run on the rails.
That upcoming Forum is our finishing line, I reckon.
Hi alwayshoping. The details on any $7.2bn are sketchy and I cannot enlighten.
Perhaps worth recalling that in January 2023, after Manara Minerals was formed at FMF23, the FT reported that they had a $3bn acquisition budget for 2023, and a further $15bn thereafter. Manara then spent $2.3bn on their VBM stake during 2023. Presumably this means that their war chest going forward is a little over $15bn. The Saudis are after a stake in Reko Diq in Pak'istan, the potential cost of which is opaque and, of course, dependent on the size of their interest. Whatever the case there would be many billions left over for Zanaga, in tandem with other strategics of course.
Bizarre.
Exactly that, Marcus.
Price and security of supply will be front and centre of the thinking of strategic partners and off takers. For example, the Gulf States could secure 66% rising 68.5% iron ore for an OpEx of
Exactly that, Marcus.
Price and security of supply will be front and centre of the thinking of strategic partners and off takers. For example, the Gulf States could secure 66% rising 68.5% iron ore for an OpEx of
Might Glencore introduce Nippon Steel to Zanaga? NS are on the hunt for another 10mtpa of iron ore, and are already invested alongside Glencore in Teck Resources producing coking coal. This from Nov 23:
'Nippon Steel, the world’s No.4 steelmaker, will keep on hunting for stakes in coking coal and iron ore mines to ensure a stable supply of essential raw materials and mitigate the potential impact of price volatility, its executive said.
A Glencore-led consortium, including Nippon Steel, sealed one of the mining sector’s biggest deals in years this month, agreeing to buy Canadian miner Teck Resources’ steelmaking coal unit for $9 billion. The Japanese company will pay around $1.34 billion for a 20% stake. ( )
About 60% of Nippon Steel’s products are sold for term customers with a mechanism that adjusts selling prices to raw materials costs, but 40% are commodity products that are affected by steel market fluctuation.
“We would like to raise the self-sufficiency ratio to around 40% in order to neutralize the impact of raw material prices on market products,” he said, referring to both coal and iron ore.
It now procures 20% of its 50 million tons of iron ore imports from its equity holdings.'
https://www.mining.com/web/nippon-steel-to-hunt-for-more-coking-coal-iron-ore-assets/
Some more:
UNLOCKING POTENTIAL THROUGH STRATEGIC PARTNERSHIPS
Conversely, one of the key objectives of the forum is to encourage partnerships between Saudi businesses and global entities. These collaborations are expected to unlock new opportunities, drive innovation, and contribute significantly to the Kingdom’s economic growth. The PIF, with its extensive portfolio and international partnerships, plays a pivotal role in facilitating these connections.
https://www.leaders-mena.com/saudis-pif-to-host-private-sector-forum-this-february/
'STRATEGIC PARTNERSHIPS'
Clifford Elphich, September 2023:
Clifford Elphick, Non-Executive Chairman of ZIOC, commented:
"... we are now engaging with STRATEGIC entities interested in participating in the Zanaga Project, and intend on securing a SELECTED PARTNER by the end of Q1 2024"
Feb 6th-7th dates for the PIF's Private Sector Forum in Riyadh dovetail nicely with ZIOC's milestone timescales:
o Strategic partner initiative - Q1 2024 (Memorandum of Understanding)
o Port partnership - Q1 2024 (Memorandum of Understanding)
· 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.
...and, as Clifford Elphick, Non-Executive Chairman of ZIOC, commented:
'"..Following the acquisition of full ownership and control of the Zanaga Project we are now engaging with strategic entities interested in participating in the Zanaga Project, and".'
>> INTEND ON SECURING A SELECTED PARTNER BY THE END OF Q1 2024