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'Congo'
I think you are spot on there, 99icecream!
For 'beyond 30mtpa' I think any agreement/JV will necessarily involve a fresh drilling campaign (paid for by the strategic/s!) that extends the resource into the c.12x overall resource. That could and should produce a massive upside to the Reserve - and the derived NPV.
'Pellet production' is an interesting one and potential a very lucrative kicker to the project. Cold bonded pellets from DRI-grade fines will be an essential component of green steel. ZIOC detailed how their fines 'worked' back in 2018 and PSEI say how they built a cold bonded plant by September 2020. Intriguing stuff. Cold pellets command a c.$40/t premium and cost c.$10/t - (as per AT when still chatty in 2019).
There's a final kicker and that's the possibility of DSO. 1mtpa of free dig, screen and truck (via Gabon) could net us $75m pa - and that would underpin our share of development costs.
All to play for, hugely exciting, and 8p is absurd!!!!
PSEI
Even as I type I read a WhatsApp with the company from this July when the 'Chinese EPC', shortly after the engagement was revealed by ZIOC.
Apparently ZIOC and the EPC were talking broadly about development solutions prior to COVID, only to have them put on hold by pandemic travel restrictions.
> This suggests that planning and thinking is *MUCH* more advanced, and has been for many years.
>> There's also one more kicker of great interest - ZIOC and PSEI timelines on 'cold bonded pellets'. More to follow.
>>> All of this tallies with and reinforces my view that development has always been the preferred option.
There's much more evidence that the relationship with PSEI goes way back and is much deeper than ZIOC have revealed:
ZIOC RNS, July 2019:
2) Pellet Feed Concentrate Plant
An Engineering Procurement and Construction company ("EPC") has been selected as the preferred provider of the process plant facilities. In order to refine and confirm the costs associated with the EPC's initial proposal, three tons of Zanaga's iron ore, representative of the orebody's upper layers, were sent for testing with the equipment providers selected by the EPC.
As a primary step, it was deemed important to evaluate the capabilities of the EPC's proposed milling solution which was expected to provide significant benefits, specifically through lower capital costs, operating costs, and power consumption rates in comparison to the ball milling solution previously selected as part of the milling solution in the 2014 FS.
> This matches up with the current EPC work on milling solutions. Of note in the PSEI video is that they highlight the problems with 'ball mills' (cost, power, inefficiency, and need for wet tailings dams (see Brazil collapses)) and detail their own solution of HPGRs (High Pressure Grinding Rolls). These HPGRs are what potentially makes the huge 40-50% CapEx/OpEx savings on these aspects of the project.
ZIOC have projected possible 20%+ savings on CapEx and OpEx using the Chinese EPC partner.
Well, @1:38 in the YouTube video, PSEI claim the following savings from Iron Ore Dry Processing:
50% CapEx saving on grinding
40% OpEx reduction on grinding and separation
> Bring on those costings now that the AGM is done and dusted.
(BTW the video had just 39 views in 8 months this morning. Now at 83....)
https://www.youtube.com/watch?app=desktop&v=NulWSEReWeY
Hugely instructive detail on PSEI's projects and tech;, including slurry pipes and dry magnetic separation tech and associated IP:
36 views 30 Mar 2023
PSEI Group has been established for more than 20 years, the company's main technical experts are from large engineering companies in China and abroad, the company is committed to provide services to clients with latest technology in mining development.
PSEI Group's major expertise includes geology and mineral resources, mining, beneficiation, long-distance pipeline transportation, dry tailings piling, environmental engineering and solid waste treatment, and overall project development management and consulting. The company's technical experts are registered professional engineers in China, Australia, the United States, and Canada.
There are 45 senior registered engineers, 80 engineers and 160 employees working for PSEI Group .
PSEI Group Holding Kunming PSEI Mining Engineering Design Co., Ltd. (Kunming, Grade B), Chengde Longxing Mining Engineering Design Co., Ltd. (Hebei Chengde, Grade A), South America Chile PSE-CHIMM JV Santiago, Chile, PSE (Pipeline Systems International Engineering). San Francisco, USA.
At present, PSEI Group is in the world's leading position in many technical fields dry-mill dry-separation, long-distance pipeline transportation and tailings dry piling.
https://www.youtube.com/watch?app=desktop&v=NulWSEReWeY
Superb find by 99icecream this morning. Short but highly instructive YouTube video by PSEI.
PSEI must be 100% nailed on as ZIOC's Chinese EPC:
https://www.youtube.com/watch?app=desktop&v=NulWSEReWeY
Check the images @1:48 and @1:54.
They exactly match the images supplied by ZIOC on p.7 on the November Investor Presentation:
https://www.zanagairon.com/wp-content/uploads/2023/11/Zanaga-Investor-Presentation-1-Nov-2023-1.pdf
I think that Shard had to work hard yesterday to keep a lid on the market. By my reckoning and untangling the 'auction' and 'late' trades, they could have sold 750,000 shares.
> In effect T2 would be being disbursed into deeper pockets while preventing the SP reaching ahead of itself ahead of *ACTUAL* news.
Saudi Arabia's hard working minister for mines and metals, Bandar Al Khorayef, has been in Japan:
HE Minister of #Industry_and_Mineral_Resources Bandar AlKhorayef met with representatives from Japan Organization for Metals and Energy Security in Tokyo, Japan.
https://twitter.com/mimgov/status/1736787415384183188
This comes on the day that the Australians detailed a huge Japanese swerve for green steel:
INCENTIVES BOOST GREEN STEEL IN JAPAN
18TH DECEMBER 2023
The Australasian Centre for Corporate Responsibility (ACCR) is commenting on the Japanese government’s announcement last week that it is introducing generous tax breaks for companies producing green steel.
The new preferential tax system will particularly benefit steel makers converting from blast furnaces, which use metallurgical coal, to electric arc furnaces. The details include:
(huge financial incentives etc)
Commenting on the news, Executive Director of the Australasian Centre for Corporate Responsibility, Brynn O’Brien, said:
“This is a clear signal from the Japanese government that it sees enormous economic opportunity in being a frontrunner in the energy transition.
“These policy levers put Japanese steel makers in a strong position to accelerate their decarbonisation and meet the escalating global demand for green steel.
“This is an immense opportunity for the Japanese steel sector, and by extension, its investors. There is no doubt, investors will be looking to ensure these opportunities are maximised.
https://www.accr.org.au/news/incentives-boost-green-steel-in-japan/
> Like the Saudis (and other Gulf States), Japan is now confronted by how to secure the high grade iron ore to charge the DRI-EAF green steel making route.
Vale do indeed, 99icecream - except by their own numbers they project a global shortage of the high grade necessary to meet the demand for green steel inputs.
By any reading of the demand side Zanaga is essential. Even at a huge 60mtpa there would still be a shortfall.
Ditto Saudi Arabia. $12bn investment in steel, a substantial chunk of which will be 'green steel. So, and almost 1 year after the PIF-Ma'aden JV was tasked with securing high grade with not a single tonne to show for it, where's the high grade iron ore coming from?
Saudi Arabia to invest $12bln in steel projects
in Commodity News 16/12/2023
Saudi Arabia is investing nearly $12 billion in steel projects to boost its production of the metal to face a large increase in domestic demand, a senior official has said.
Demand for steel, a pillar of construction activity, is already strong due to massive projects under way as part of the Gulf Kingdom’s Vision 2030 economic diversification scheme, said Khalid Al-Mudaifer, Deputy Industry and Mineral Resources Minister.
Mudaifer, quoted by the Saudi daily Al-Madina on Friday, said mega projects launched in the world’s largest oil exporter over the past few years have a value of more than 5 trillion riyals ($1.33 trillion) and that more such projects are in the pipeline.
“These projects have largely boosted demand for steel… we expect this demand to surge by at least 150 percent in the next few years thanks to these projects,” he said.
“To face this increase, there are steel projects in the Kingdom worth nearly $12 billion while total investments in metals exceed 120 billion riyals ($32 billion).”
https://www.hellenicshippingnews.com/saudi-arabia-to-invest-12bln-in-steel-projects/
Cold bonded briquettes for DRI-EAf 'green steel'. The issue is that Vale project a 10s mtpa deficit in the requisite 67% Fe by 2030. So where's it coming from?
12/11/23 • Environment, Iron Ore
Revolution in the global steel industry: Vale inaugurates the world's first briquette plant in Vitória, Brazil
More than 30 companies have already shown interest in receiving shipments of briquette in 2024. As it is an innovative product, production for the first two years will be used for testing at these clients' facilities. Most of the interested parties are from Europe and the Middle East, but there have been requests from clients all over the world, including Brazil, guaranteeing demand for more than a year. In 2024, the two Tubarão plants will produce around 2.5 million tons. Production will gradually increase until it reaches 6 million tons per year.
https://vale.com/w/revolution-in-the-global-steel-industry-vale-inaugurates-the-worlds-first-briquette-plant-in-vitoria-brazil/-/categories/1968809
Going by ZIOC's own words and today's CEO appointment, project funding could already have been secured. This from Nov 22 at the time of the Glencopre agreement:
Employees and consultants
The Company does not expect any material changes to its current employees and / or consultants following Completion and to the delivery of the work programme in 2023. During this time, the Company will also seek to initiate discussions regarding the funding required for the development of the Project. Once funding has been secured and work on the development of the Project has commenced, the Company expects to recruit an executive team to meet the demands of the Company and the Project.
> Once funding has been secured and work on the development of the Project has commenced, the Company expects to recruit an executive team..
>> An 'executive team' starts with the CEO. So, has funding already been secured?
This appointment and RNS will be winging its way around boardrooms of major mining companies, SWFs, large institutions, hedge funds, and onto the desks of editors of MSM and industry publications -(perhaps even WoodMac might get the memo)..
The story builds fast now...
Filleted and highlights for me:
1. Immediate effect
> 'Marty' CEO for EPC announce (due now) and then AGM
2. ...project development, operations and transformational growth phases
> I like that bit!!
3. Not BoD yet
> Old ZIOC retain executive control
4. ..recently announced strategic objectives of the Company.
> Milestones on track
5. ...most respected iron ore project in Africa
> Watch out Simandou!
9....the world with high grade feed for low emission steel production.
> the world - so not just China, which would seem to open the door for the Middle East.
14 December 2023
CEO appointment
Zanaga Iron Ore Company Limited is pleased to announce the appointment of Martin Knauth as Chief Executive Officer with IMMEDIATE EFFECT (1).
Mr Knauth is a senior mining executive with extensive experience in the industry spanning more than 30 years in a wide range of cultures, countries and commodities, with notable success in PROJECT DEVELOPMENT, OPERATIONS AND TRANSFORMATIONAL GROWTH PHASES (2), as well as establishment of performance cultures. With previous experience in Australia, Kazakhstan, Madagascar, Cuba, the DRC and many other jurisdictions, working for such companies as Western Mining Corp, Vale, Sherritt Metals International, KAZ Minerals and Glencore. He has a strong record in establishing and maintaining positive relationships with governments, communities, employees and other Project stakeholders critical to the Company's success.
MR KNAUTH WILL NOT BE JOINING THE BOARD OF DIRECTORS AT THIS STAGE (3), but a potential Board role will be considered in the future.
Clifford Elphick, Chairman of ZIOC commented:
"I am delighted to announce the appointment of Marty Knauth as CEO of ZIOC. Marty brings extensive experience in project development, operations and transformational growth phases in the mining industry. These positive attributes are essential to moving the Zanaga Project forward, especially in light of the RECENTLY ANNOUNCED STRATEGIC OBJECTIVES OF THE COMPANY (4)."
Marty's LinkedIn:
Advancing the 100% owned Zanaga Iron Ore Project located in the Republic of Congo, one of the largest and highest grade resources yet to be developed. We envision Zanaga becoming the MOST RESPECTED IRON ORE PROJECT IN AFRICA(5), focusing on creating a mining based future for the people of the Republic of Congo, whilst providing the WORLD with high grade feed for low emission steel production(6).
...and the UK cannot make green steel (though why anyone thought they could is a mystery to me) - No hydrogen and no high grade iron ore. It takes those sensible Swedes to point out the obvious:
'At Boden in northern Sweden, H2 Green Steel is constructing what is set to become the world's first large-scale green hydrogen-powered steelworks, at a cost of £4.8bn (€5.5bn).
The clean fuel is made using electricity which comes mainly from a large hydro scheme nearby, providing constant and reliable renewable power.
THE AREA HAS AN ABUNDANCE OF GREEN ENERGY AS WELL AS ANOTHER VITAL INGREDIENT - HIGH QUALITY IRON ORE.
The plan at Boden is to produce about five million tonnes of virgin steel a year by 2030 as the company eyes up other opportunities in Canada and Brazil.
Countries like the UK, by contrast, lack the "right conditions as of now", claimed Ms Ryttberg-Wallgren, H2 Green Steel's executive vice-president.
"Will you have to give up on virgin iron-making? Probably yes," she told BBC Wales News.
"It will be a slow death if not."
Producing the required volume of green hydrogen affordably would be "very difficult if you don't have baseload power", she added.'
https://www.bbc.com/news/uk-wales-67691050
>On the other hand, the Gulf States will have an abundance of green hydrogen, plus the budget and intent to secure high grade supplies.
...and where are Vale going to source the volumes of high grade to feed their projected 8 briquette plants worldwide by 2030? Vale themselves are going for 'quality over quantity' and target an average of 64-and-a-bit % Fe by 2030. This falls well short of the 67%Fe+ necessary for DRI production.
Today: 'Brazilian miner Vale is considering implementing new iron ore briquette plants in Brazil, the Middle East and the Gulf of Mexico, chief executive Eduardo Bartolomeo said on Tuesday, as the firm opened its first briquette unit in southeastern Brazil.
The plans would be part of Vale’s goal of having eight other briquette plants established in several locations worldwide by 2030, with the company saying the product could help its steelmaking clients reduce carbon emissions.
The briquette, which is produced through the low-temperature agglomeration of high-quality iron ore...'
https://www.mining.com/web/vale-mulls-briquette-plants-in-gulf-of-mexico-middle-east/
Come January it will be one year since the Riyadh FMF23 at which the PIF-Ma'aden JV was specifically tasked with securing globally significant supplies of high grade iron ore to feed their nascent green steel industry.
Now the Saudi's are setting the scene for FMF24. Note the narrative in their tweet from this afternoon:
'Develop strategies for critical minerals in a Super mining region that includes 80 countries extending from Africa to West and Central Asia',
and then to make the drive for the series of 3 Gulf green steel mega-hubs very clear,
'Producing green metals using modern technologies and developing centers for those metals in the region.'
https://twitter.com/mimgov/status/1734588274344112177
And there's a helpful countdown clock here. No pressure then to secure the high grade essential, nay critical, to it all:
https://www.futuremineralsforum.com/registration
Hi Driving. I'm not sure that that is strictly the case.
He's the relevant passage from the Glencore Agreement that deals with the off take in the event of a take over or even buy in:
(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.
If Glencore International fails to provide a response to MPD in accordance with the requirements of the Marketing Agreement, it shall be deemed to have accepted the termination of the Marketing Agreement, in which event the terms of paragraph (m)(ii) above shall apply.
They've just signed an early stage MoU with Liberty Steel to explore options for import of Australian magnetite.
The problem is that it won't be available to 2031 at best.....and Ad and the Gulf States want it tomorrow.
Paging Clifford Elphick.....
'...Under the MoU, the two companies will explore plans to host a green iron production facility in the Khalifa Economic Zones Abu Dhabi (KEZAD) and related port infrastructure and conveyor system in Khalifa Port, contributing to the UAE’s ambitions to grow its manufacturing base by 2031.
The MoU is part of LIBERTY’s early stage concept development to convert its magnetite ore into high quality green iron in the UAE using gas and transitioning to green hydrogen once it becomes available at scale by 2031 and 2050. '
https://www.adportsgroup.com/en/news-and-media/2023/12/11/liberty-steel-signs-mou-with-ad-ports-group