Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
BloombergNEF identify a 133mtpa deficit of Zanaga-grade DR iron ore by 2040. Of course that would more than 4 Zanagas at Stage 2's 30mtpa. This cannot and will not have been lost on the majors, both iron ore producers and steel mill consumers, all of which makes Zanaga's acquisition and development a business imperative for multiple strategics across the industry.
BloombergNEF: GREEN STEEL FACES AN IRON ORE SQUEEZE
April 22nd: A shortage of high-quality iron ire is proving a hurdle for the steel industry as it attempts to turn its emissions. Global demand for this type of iron ore is expected to outpace supply - and could reach a deficit of 133 million metric tons by 2040.
https://www.bloomberg.com/news/videos/2024-04-22/green-steel-faces-an-iron-ore-squeeze-bnef
My thinking on 'Qatar' is not necessarily that they are on the Buy side of Zanaga. As Glencore's largest shareholder the QIA is also motivated to help ZIOC achieve the most advantageous - read lucrative - deal possible. That's not to say that they wouldn't welcome 4mtpa of high grade to feed their 2.5mtpa steel industry. However this does mean that the QIA could be on both sides of a deal. Convulted? Who knows?!
WRT AT, I have several colleagues who have been trying to eke out a response from him since he was last communicative back in September. Since then, nothing. I take this as further evidence that all things Zanaga are now way beyond his pay grade and being driven by the likes of SASAC, SWFs, Baosteel and other supranational interests. That being the case there would be very little that AT could or indeed should say. I've taken the view that such is the case and that it is positive to my immediate fortunes.
AT's head is well beneath the parapet - under orders I'm sure.
As to Qatar, there have been shuttlings between London, Doha and Brazzaville ...
With the QIA being Glencore's largest shareholder, and after they were beaten to the VBM prize by the PIF, might Zanaga be their counterpunch?
Strictly speaking on Tranche 3, here's the clause from July 23:
Solely at the discretion of the Company, a third tranche of up to 12 million Subscription Shares will be subscribed for by SMC (the "Third Tranche" and together with the First Tranche and the Second Tranche, each a "Tranche"). Any such subscription will take place within 14 trading days of the earlier of: (a) the date on which SMC has sold all the Subscription Shares subscribed for in the Second Tranche; or (b) such other date as SMC and the Company agree.
'....or (b) such other date as SMC and the Company agree.'
So (a) is redundant and (b) says they can take it whenever the Company like.
The key takeaway is that they haven't taken Tranche 3 and, furthermore, that the loan is rolled until 31st July. This must imply that all concerned, NomAd included, are confident of developments in the meantime.
Driving, my friend, I really don't think that the managements and co would have taken their shares in lieu of salary, which included a 65% discount, if they were then to be diluted by a further 90%!!
ZIOC has a NPV in the many $$billions. The incoming Strategic Investors are in competition with each other, and hence it is a sellers market - that's one in our favour - implying they will have to pay us the NPV of their respective stakes. Never say never, of course, but a RI is the very last thing I expect.
From what I'm seeing that could very well be what is about to happen.
Looks like Qatar might be in play.
Oh, and Big D's official account.....
Did you know that Marty opened his account just last November.
He follows just 36 accounts:
ZIOC is one, as is the London Stock Exchange,
he also follows Glencore, BHP, Rio Tinto and ......... Ma'aden.
A select little group, wouldn't you say?
A report out today from the IIEFA kicks CCUS for green steel into the long grass, and endorses DRI as the way forward.
Which means Zanaga, but we all know that.
The market doesn't.........at least not yet. Just wait. Less than 2 weeks to go now.
Key Findings
Over several decades of implementation in a range of sectors, carbon capture, utilisation and storage (CCUS) has accumulated a track record of underperformance and failure.
Major steelmakers are turning increasingly to direct reduced iron (DRI)-based steelmaking to replace coal-consuming blast furnaces. CCUS faces being left behind as it was in other sectors like power generation.
...
The German think tank Agora Industry highlights that, since 2020, commercial-scale project announcements for new DRI-based steel plants and for CCUS projects for blast furnace-based steelmaking have developed very differently. To date, virtually all steel companies that plan to build low-carbon steelmaking capacity at commercial scale have opted for hydrogen-based or hydrogen-ready DRI plants, not CCUS. The 2030 project pipeline of DRI plants has grown to 94 million tonnes a year (Mtpa), while the pipeline for commercial-scale CCUS on blast furnace-based operations amounts to just 1Mtpa.
https://ieefa.org/resources/carbon-capture-steel
All and any views on how to value Zanaga much appreciated into here...
I don't, not at all! If anything I see w string of good reasons to mark us higher again.
We're very much on the same page, Guffers. I am interested, though, in how investors reach their target valuations for any deal. There's the NPV, of course. Comparative deals don't exist for reference....or do they?
When it comes to pricing up a deal, who has a methodology they would be willing to share?
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.