Zanaga Iron Ore Share Discussion Threads

[extrader] 16/12/2020 13:32

Hi all,

The penny-dropping and ref to Simandou is all well and good, what we want is some media 'buzz' , so that PI's (and others) start talking about 'mini-Sim' in the same way as they do about 'mini-Ivan'......;->

ATB

[sooty snipes] 16/12/2020 12:26

Update due anytime within the next couple of weeks. Are we going to get some real positive news or is Trahar going to let the tyres down again?

[emptyend] 16/12/2020 11:38

...also...hTTps://stockhead.com.au/resources/why-has-this-small-cap-explorer-gained-580-over-the-past-3-days/In this context, Zanaga is a very cheap option indeed. Quite possible, I suspect, for the project structure to change from being a two-partner situation to one with 3, perhaps 4, partners - and with Zanaga getting taken out on the way.

[extrader] 16/12/2020 11:13

Hi sooty,

Cheers !
Seems ZIOC has made the followed/hallowed top 10 risers board - first time in ages - so should draw in some momentum punters now... ?

ATB

[sooty snipes] 16/12/2020 11:10

Easier to read Extrader. Just click on the link

[extrader] 16/12/2020 10:46

Hi all,

Hat-tip to Aberdeenman e lse where :

hxxps://stockhead.com.au/resources/these-small-caps-are-pulling-old-iron-ore-mines-out-of-hibernation-at-warp-speed/

Why put money into marginal mines in OZ rather than a world-class mine or mines elsewhere ?

ATB

[gta5] 15/12/2020 13:59

Trawling throug some old articles on Sundance and dealmaking I found these two gems;

Sundance Flagship projects:


And the Congolese Nguesso&Son dealings with one of them.. Congo Iron AKA Nabeba deposit:



Messy stuff. It'd be interesting to know why the Chinese walked and how those very issues were dealt with in the case of Zanaga (and/or Xtrata/Glencore).

GL, GTA

[extrader] 15/12/2020 13:47

Good article tks !

..."Simandou “needs a sophisticated dealmaker to coordinate various parties, to share interests and risks,” a senior energy industry investor said. Without the capability to get all parties to act together and figure out a sustainable business model, the development of Simandou will remain out of reach, the investor said...."

Where's COIDIC when you need them ?
;-)

ATB

[gta5] 15/12/2020 11:03

Another good article from our friends at Caixing: Aug 25, 2020 06:23 Stalled Guinea Project Highlights China’s Struggle to Reforge Iron Ore Supply Chain By Luo Guoping and Han Wei
Simandou, a 110-kilometer range of hills deep in the hinterland of Guinea in Western Africa, boasts the world’s largest untapped iron ore reserves. They could reshape the global supply chain of the critical ingredient of steel, the world’s second-most traded commodity behind crude oil.
The rich assets have lured global investors, especially from ore-thirsty China, but pulling the mineral out of the ground has turned out to be a thorny challenge with entangled interests and risks stemming from technical, capital and political uncertainties.
It is considered the world’s largest, highest-quality iron ore deposit. Some industry experts project it could produce as much as 150 million tons of iron ore a year, equivalent to 7% of global production in 2019. Developing the deposits could save China, the world’s largest steelmaking country, billions of dollars a year.
But building the necessary infrastructure in Guinea, which ranks 160th by per capita GDP of 186 countries according to the International Monetary Fund, would also cost billions of dollars. To make the Simandou project operational would require railway and port construction amounting to the largest infrastructure project ever in Africa. Investors have been reluctant to sink that kind of money into Simandou because of the risk that prices will plunge.
The Simandou project has largely stalled over the past two decades, reflecting political complexity, mining rights disputes, concerns over costs and pressures from industry rivals. Discovered in the 1990s, the Simandou deposits hold more than 8.6 billion tons of iron ore with an average content of 65% iron, according to Guinea’s National Institute of Statistics.
“The reserve of Simandou is so rich that one can get minerals with a simple shovel,” a mining industry investor said.
The Simandou project could maintain a stable 7% share of global iron ore supply in the coming decade if it reached full capacity, giving it the power to influence global pricing, said Andrew Gadd, chief iron ore analyst at British commodity consultancy CRU. It could threaten some high-cost suppliers such as those in Canada, Brazil and South Africa, Gadd said.
In Australia, Simandou is known “the Pilbara killer.” Australia, the world’s largest iron ore exporter, produces more than 90% of its ore exports in the western region of Pilbara. Anglo-Australian mining giant Rio Tinto Group is a major stakeholder in the Simandou project since 1997 but has moved slowly to develop the project.
Chinese investors are among the main forces pushing the project forward as a new source of iron ore that could bring down prices for China’s steel mills. In 2019, China imported more than 1 billion tons of iron ore, 70% of the global supply and 80% of the country’s total demand. About 80% of China’s iron ore imports come from the four largest mining companies — Brazil’s Vale S.A. and Australia-based Rio Tinto, BHP Group Ltd. and Fortescue Metals Group.
In the first seven months this year, China imported 660 million tons of iron ore, up 11.8% from a year ago, official data showed. Demand has rebounded as the domestic outbreak of Covid-19 wanes and the government’s pro-growth, infrastructure push drives up steel consumption.
Heavy reliance on foreign supply makes Chinese steelmakers especially vulnerable to iron ore prices. Every $10 increase of the price of a ton of iron ore will lead to an extra $10 billion of spending by China every year, analysts estimate.
In 2019, a $30 price rise for a ton of iron ore cost Chinese steel mills an additional $30 billion, more than the 189 billion yuan ($27.4 billion) of net profit posted by the country’s entire steel industry, said Chen Derong, chairman of China Baowu Steel Group Corp. Ltd., China’s largest steel refiner.
Despite the pandemic, iron ore prices have continued rising this year, touching a six-year high on Aug. 19 of $128.80 a ton and hovering at $120 since then.
“If Simandou starts operation, it could bring a drop of global iron ore prices by $40 to $50 a ton,” a steel industry analyst in China said.
Since May, Baowu has been trying to lead a consortium of steelmakers to invest in Simandou and break the development logjam. Baowu plans to set up a $6 billion investment fund consisting of steelmakers and financial investors to develop Simandou, Caixin learned.
But the Baowu project is no sure thing. Chinese investors including state-owned aluminum giant Aluminum Corp. of China Ltd. (Chinalco) tapped into the project years ago with little progress to show for it.
Chinese companies have a poor track record of investing in foreign mining. The painful example is the Sino iron project in Australia. After Chinese state-owned conglomerate Citic Ltd. paid $450 million for 25 years of mining rights to the iron ore deposit at Cape Preston in 2006, it quickly turned into a money pit because of repeated production delays and skyrocketing investments.
Simandou “needs a sophisticated dealmaker to coordinate various parties, to share interests and risks,” a senior energy industry investor said. Without the capability to get all parties to act together and figure out a sustainable business model, the development of Simandou will remain out of reach, the investor said.










Long-stalled project
Mining rights to Simandou have been split into four blocks, none of which has yet been developed. The first two blocks in the north are owned by SMB-Winning, a consortium backed by Singaporean and Chinese companies, while the No. 3 and 4 blocks in the south are controlled by Rio Tinto and a group of Chinalco-led Chinese investors. The Guinean government holds 15% in each of the two parts.
Chinalco and Chinese partners entered Simandou in 2010 by acquiring a 39.5% stake in Simfer, a Rio Tinto unit operating blocks 3 and 4. Chinalco is the largest single shareholder of Rio Tinto with a 10.3% stake.
But development of the blocks stalled in following years, leaving huge costs for investors. A company document seen by Caixin showed that Simfer invested more than $3.7 billion in infrastructure and mining facilities in Simandou. In 2015 and 2016, Rio Tinto wrote off nearly $2.3 billion of losses from the project. Simfer staff working on the Simandou project has been slashed to dozens from around 1,000 before 2016.
Chinalco and partners paid $1.35 billion for the stake in Simfer. A company financial report showed that Chinalco spent $15.5 billion as of the end of 2019 on Simfer and affiliated companies.
Industry analysts said they think Rio Tinto’s slow progress on the Simandou project reflects a strategic decision to focus on cheaper development in Australia, and the company doesn’t want new supply to press down market prices.
In reply to a Caixin inquiry, Rio Tinto said Simandou will provide a good supplement to ore supplies from Australia and Canada to meet strong demand for high-quality iron ore from China and other markets.
Rio Tinto was the first foreign investor licensed to explore Simandou in 1997. In 2006 the company won 25 years of mining rights for all four blocks with an option to extend. But no sustained work has been done on the sites. In 2008 the Guinean government forced Rio Tinto to relinquish its rights to the northern two blocks to an Israeli company, BSG Resources. But BSG’s purchase of the mining rights was controversial and was voided in 2019 by Guinea’s new government, citing corruption. In November that year, the government relaunched bidding for the two blocks, and SMB-Winning became the winner.
SMB-Winning is a venture jointly set up by Singapore-based shipping company Winning International Group, Chinese private aluminum producer Shandong Weiqiao, Yantai Port Group and Guinean-French logistics company UMS. SMB-Winning didn’t disclose how much it paid for the mining rights but pledged to invest $14 billion to develop the two northern blocks.
Sources close to the matter said the Guinea government hoped to pressure Rio Tinto into making progress in Simandou by inviting in the new investors. In June, SMB-Winning signed a framework accord with Guinean authorities and agreed on a timetable leading to commercial operations within 74 months after signing.
But several industry insiders said they are doubtful of SMB-Winning’s ability to raise enough funds to support the development. Shandong Weiqiao, with the strongest balance sheet among the shareholders, has a debt-to-asset ratio of more than 60%, restricting its capacity to tap new credit, they said. SMB-Winning contacted some Chinese banks for potential loans, but most lenders showed little interest, sources said.
Game changer
The Simandou project is strategically valuable to China as it would diversify the country’s iron ore supply and give it greater bargaining power in price setting, said Lu Guangming, an analyst at CRU.
The four iron ore giants — Vale, Rio Tinto, BHP and Fortescue Metals — accounted for nearly half of 2019 global iron ore production of 2.1 billion tons. They have the major say in settling global prices.
Heavily reliant on imports, China has accepted almost every price increase by the four major suppliers since 2003 no matter how the pricing mechanism was changed, analysts said. The country has more than 300 steel mills, but their combined interests in foreign iron ore reserves amounts to only 65 million tons a year, or less than 10% of annual ore imports, according to the Metallurgical Industry Planning and Research Institute.
The Simandou project could become a game changer for Chinese steel mills. Caixin learned that Baowu’s proposed $6 billion investment would put $4.5 billion into the southern blocks and $1.5 billion into the northern blocks. Under the Baowu plan, 15% of the fund would come from Baowu, 35% from other steelmakers, 25% from the sovereign wealth fund, 10% from other institutional investors and 15% from infrastructure investors.
Baowu has held talks with major domestic steel companies since June, including Shougang Group Co. Ltd., China Minmetals Corp. and Jianlong Group. It also met with Simandou’s current investors Chinalco and SMB-Winning, Caixin learned.
Baowu Chairman Chen is very enthusiastic about the Simandou investment and wants to push it forward, said a person close to the company.
But the plan is still at an early stage, and many Chinese steelmakers are hesitant to take part because of different concerns over iron ore supply, a steel industry professional told Caixin. Meanwhile, financial investors shy away from the long investment period and related uncertainties, a fund manager said.
Even if Baowu’s plan wins supports from other investors, it will remain a major challenge to negotiate a way to work with the current project shareholders, analysts said. A person close to the matter said Baowu hopes to persuade Rio Tinto to sell part or all of its Simandou stake.
No easy money
Getting the minerals out of Guinea’s mountainous hinterland and transporting the ore to China will be a challenge requiring massive investment in infrastructure and logistics, the investor said.
The Guinean government is seeking to leverage the Simandou project to expand domestic infrastructure, demanding construction of a 650-kilometer Trans-Guinea Railway and a deep-water port as well as supportive facilities. This would mean a huge additional investment for Simandou developers. A study by Rio Tinto before 2016 showed that overall investment in block 3 and 4 could amount $18 billion. A preliminary study by Baowu projected $15 of billion investment for the two blocks, while SMB-Winning estimated $14 billion of spending for the other two blocks.
Such massive construction also means a longer investment period. Analysts said it could take as long as eight years for Simandou to complete construction and start delivery.
A greater challenge would come from market response after Simandou commences production.
“Once Simandou starts production, international iron ore prices will be slashed, hurting investors’ interests,” a financial institution source said.
Average production cost at Simandou might range between $35 and $40 a ton, compared with $15 to $20 a ton in Australia, making it more vulnerable to price wars, analysts said.
“It is almost certain that the four mining giants will cut prices after Simandou starts operation to kill it,” a fund manager said.
The financial institution source said considering the complexity of the Simandou project, it will need to be pushed forward by state-level coordination and planning. However, another source said authorities haven’t shown any interest in offering state backing to the Simandou project amid concerns over domestic steel industry overcapacity.
(Source: hxxps://www.caixinglobal.com/2020-08-25/cover-story-chinas-opportunities-and-risks-in-africas-giant-iron-ore-field-101596543.html )

[gta5] 15/12/2020 09:33

it always is Extrader... always is.

Here is another cry of pain from our future Zanaga owners. I just wish their contract signing skills were more honed...



Ontop of that, China is not having much luck with alternatives; Vale is limited in its ability to grow, Sapro is landlocked and just as dependent as us on a port (and Rail or Slurry pipes) and Mbalam/Sundance is not being taken forward as the Chinese have walked away from what I can see.

That leaves Simandou, but as has been mentioned eleswhere its not all sunlit uplands there either:


(from

______________________________________________________________________________

Nov 25, 2020 07:52 PMBUSINESS & TECH
China-Backed Effort to Create World’s Largest Iron Mine Is Going Nowhere
By Luo Guoping and Lu Yutong


Efforts to develop the world’s largest known untapped iron ore reserve in West Africa have stalled once more, with a top engineering consultant on the project telling Caixin the Chinese-Singaporean consortium that bought into the Simandou project in June has not substantially invested in it.


As iron ore prices climbed this year, the SMB-Winning consortium bought into the Guinean project that is expected to be able to produce as much as 150 million tons of iron ore a year, equivalent to 7% of global production in 2019. 


Their buy-in has not yet provided much new momentum to a project that has seen little progress over the past two decades, mired in complex political and mining rights disputes, concerns over costs and pressure from industry rivals.


Since SMB-Winning secured the northern half of the project’s four blocks of mining rights in government bidding this June, it has released a steady stream of press releases about its progress there. Executives were sent to inspect the new blocks in October, environmental impact work was done, and in November the company inked deals with the Guinea government regarding construction of ports and railways.


But with more than 10 stakeholders in the project including the Chinese and Guinean governments, pre-construction work will take a long time, and the consortium has yet to put in any “substantial investment,” according to Li Xinchuang, an expert at the China Metallurgical Industry Planning and Research Institute.


The remaining two southern blocks are controlled by Rio Tinto and a group of Chinese investors led by steelmaking giant Baowu. Rio Tinto has been a stakeholder since 1997, and the Chinese partners joined in 2010 when a Chinalco-led group acquired a stake in the Rio Tinto unit associated with Simandou. That stake was taken over by Baowu in June.


The project is massive in scale: Rio Tinto in 2016 estimated that tapping its blocks could require investment of $18 billion, and SMB-Winning expects it would need to spend $14 billion on the northern two blocks.


Rio Tinto is also in touch with multiple companies seeking to share infrastructure, the company’s CEO Jean-Sébastien Jacques said at a press conference on Monday.


Among those involved, Li said the Chinese and Guinean governments are most motivated to push things forward, and best positioned to help myriad participating banks and market buyers reach consensus on details. But he added that such coordination would not be easy. Operators of all four blocks will need to cooperate for the project to make progress, Li said, and should take political factors into consideration to reduce risks.


END
__________________________________________________________________

[extrader] 12/12/2020 14:55

Hi GTA5,

...and here's an intriguing link to Tony Blair and George Soros's alleged involvement in Guinea's wheelings and dealings, apparently facilitated by Bernard Kouchner (founder of Medecins sans Frontieres)...So, lots of 'the great and the good'....

hxxp://johnhelmer.net/wp-content/uploads/2013/03/Guinea-Special-Analysis-Jan-2013.pdf

..."Tony Blair Associates, the private consultancy of the former British Prime Minister, is a paid adviser to Abu Dhabi's Mubadala Development Company, while the organization has struck several lucrative minerals deals with the Guinean government since the coming to power of Alpha Condé. In
2012, it signed a major bauxite supply deal with the country company, which holds a 49 per cent stake in the CBG mining group.

It can be recalled that Tony Blair, through his Africa Governance Initiative, is a close Advisor the the Guinean President and has been visiting Guinea regularly since Alpha Condé’s election. Tony Blair has visited no fewer than six times since the summer of 2011. Most recently on a flying visit on 13 January to meet the president en route to Sierra Leone.
His employee, Shruti Mehrotra, head of the Tony Blair Initiative in Guinea, works directly with Alpha Condé, whose office she shares at the
Presidency. Shruti Mehrotra worked previously for Global Witness, the organization funded by George Soros...."

hxxps://www.linkedin.com/in/shruti-mehrotra-92b6434/

.."Special Assistant to the President, Office of the President of Guinea
Company NameTony Blair Africa Governance Initiative
Dates EmployedAug 2011 – Jul 2013
Employment Duration2 yrs
LocationConakry, Guinea
Served as the de facto Deputy Chief of Staff to the first democratically elected President of the Republic of Guinea, including leadership of a team of international advisors embedded across government. Working directly with the President, facilitated a highly lauded program of economic and governance reforms, including renegotiation of the country’s external debt, development of over $15B of infrastructure projects, and orchestration of support from high-level advisors such as Prime Minister Blair and George Soros.."


It's complicated.....;-&lt;<br /> ATB

[extrader] 12/12/2020 13:44

Hi GTA5,

Thanks for this !

(1)This link gives some more 'colour'. With Frank Timis involved, what would you expect ;-> ?


(2) OTOH..but they're seemingly willing to invest 5x in Guinea, which is hardly a byword for financial probity....indeed, the recent opportunity arises precisely because of prior corruption, etc

At least ZIOC investors know (or should) the nature of the beast !

I'm with Mark Twain on this : "It's not what you don't know that costs you money, it's what you know for a fact that just ain't so..."

ATB

[gta5] 12/12/2020 13:06

Another sad example of broken dreams in Africa:



This is one of the reasons everyone are dragging their feet to invest 3BN+ in a resource rich conutry like ROC....

GL, GTA

[extrader] 11/12/2020 14:12

And, following on ...

.."I don't understand why Elphick and Co. would agree to be bought out cheaply..."


In no particular order...

(a) 'cheap' is relative : the founder developers probably got most of their seed capital back at the time of IPO, when there was a concurrent founder shareholder offering; since then , they've mostly piggy-backed on Other People's Money aka Xstrata. So, arguably , ANYTHING they get now is good;

(b) they're not getting any younger, Elphick is around 60....and I'm sure they were looking for a 'quick turn';

(c) Elphick's other public investment GEMD has underperformed :

"That familiar tune you may be hearing in the back of your mind – assuming you are old enough to remember it – while reviewing the history of GEM Diamonds is by Mary Hopkin and it runs: “Those were the days my friend/We thought they’d never end/We’d sing and dance for ever and a day”. So it must have seemed for Elphick and his backers when he launched GEM on the London Stock Exchange in 2007 when he raised £285m and the company was worth around $1bn. Fast forward to December last year when GEM had a market capitalisation of around $94m. To be fair, just about the entire diamond sector has taken a pounding but GEM’s fall from grace is all the more dramatic given Elphick’s history with De Beers and the Oppenheimer family. We actually wrote in 2008 that if anyone was likely to replace Nicky Oppenheimer as “the king of diamonds”, it was Elphick."


(d) I can't imagine Elphick is in the poorhouse, but his 80m or so shares at the mooted 1:1 GLEN would be worth ca £ 200m, which I'm sure would come in handy...
Keith Everitt with 20m (£ 50m), Julian Higgins with 14m (£35m), Howarth (ditto) and AI and Seritza would think Xmas had come early......and these total approx 50% of shares. Plus all the original co-investors below 3%...

All IMO
ATB

[extrader] 11/12/2020 12:54

Hi GTA5,

Good Q's

(1)The current share price is a useful reference in a conventional merger or acquisition, but is surely irrelevant in Zanaga, where pretty much all the value is theoretical future : an iron-clad (boom boom) patent for penicillin , say, wouldn't be worth much if there were no means of monetising it.

(2) Who would underwrite...and who would buy a 'pig(iron, sorry) in a poke' ? The subscribers would get a trivial %age in something that still had no road to market...and a GLEN right of first refusal, if things got interesting...

(3) Just posted this e lse where :

..".."I don't understand why Glencore won't buy us out through a share issue.."

No need for a share issue, AFAICS : GLEN has abt 1 bn shares in treasury, so a 1:1 for 300m ZIOC would be easily do-able....and @ £ 2.40 would tick a lot of boxes, I imagine.
Plus would make any deal-doing easier...and send a strong signal that GLEN wanted to monetise the asset, one way or another....and set, by implication, a 'floor price' for any discussions.

All roads certainly seem to lead to GLEN, atm....

ATB

[gta5] 10/12/2020 13:12

I normally don't track the daily Iron ore price swings, but the current pricing must be putting a fire under a lot of people out there. FMG, Rio and others are flush with cash following the current bonanza, Vale are in a world of pain with local issues that is going to limit their short and medium term ability to meet demand, and Africa's simandou and others are realistically 5-7 Years away from production. This leaves Australia as the sole supplier of the raw resources, and as we all know the political mood music isn't pretty between China-Australia. (with the immediate benefit to Australian Iron ore producers...)

If I were at the top of Vale, FMG, Rio or the Communist party I'd be all over Sapro, Mbalam, Zanaga and the rest of them to secure it. Even if Glencore has the controlling stake in our case, 49% of ZIOP should represent incredible option value in this environment. (currently valued as a write-off)
Even if China only had the rights to the resources without developing them it would place it in a better position to negotiate with Australia. At the moment all that China can do is some sabre-rattling on beef and wine and keep on paying $150+/tonne for the Iron Ore. Thats going to sum up well over 100BN USD for 2020.... Not so shrewd nor clever.


I have 3 open questions regarding ZIOC that are nagging me:

1. Why on earth does ZIOC NOT want investors to get excited about "the renewed interest" from the ongoing conversations? why keep the valuation low?

2. why did they not want to raise funds at a more comfortable 50P/share (or 200P if we "get excited") rather than barely subsisting at 5P with almost no credibility or alternative options to manoeuvre)

3. what on earth are Glencore waiting for? It's patently obvious that they missed the Iron ore boom, a monumentally large missed oportunity that Glasenberg is directly and personally responsible for, at least now, with the new kid in charge shortly they can redeem themselves if they pull their finger out...

GTA.

[extrader] 07/12/2020 14:52

Hi GTA5,

Good spot !

The folk behind this since 2011 hxxps://www.sundanceresources.com.au/irm/content/default.aspx seem to have fallen out with their partner AustSino, it's not clear whether they're still in the frame in any way.

The ore is pretty land-locked (on the Congo side 70 KM away even more so) and a long way (450 Km or so) from a port. But there appears to be a rail link (of sorts) already....

ATB

[gta5] 07/12/2020 12:37

why oh why does this look so familiar??:



GTA.

[extrader] 06/12/2020 13:25

Hi all,

Some comment from e lse where (99icecream) :

.."IMHO it is a stunningly cheap share. However, it is so precisely because it is not on many investors "radar". For example the recent Guardian article (regarding the China / Australia rift and African iron ore) does not mention Zanaga at all. There have been several articles on Glencore about Cobalt, Nickel, Coal,... etc. but none on either of its major iron-ore investments. None of the brokers are producing research on Zanaga and I suspect Glencore / Zanaga prefer it that way.




FWLIW, I thought it would do no harm to raise ZIOC's profile with the media, so sent off a short email to Ben Butler, author of the Guardian piece, saying that there's an interesting subplot he might want to consider, involving Glasenberg 'the dealer' and the current concatenation of circumstances :
- climate change (coal/iron ore);
- China pollution vs China politics;
- RoC debt (GLEN and China), etc.
- new US approach to China (maybe).

Circling back to Ivan : "
“I’ll support him (Nagle) in anything that creates value for shareholders,” he said.


;->
ATB

[gta5] 06/12/2020 13:03

This is pretty clear where it's heading:




and:



"...Missing out on iron ore has hurt Glencore for years, with the company now dwarfed in value by Rio. That slump in Glencore’s value, especially compared with its rivals, led Glasenberg to say Friday he won’t play any role in the mining industry after retiring...."

[extrader] 04/12/2020 16:39

Hi all,

Along with today's news re Glasenberg stepping down mid 2021, GLEN published today its 'pathway to net zero' - steps to achieving carbon neutral by 2050.



Arguably, developing Zanaga would be consistent with (2), (3) and particularly (4) :

"...2. Reducing Scope 3 emissions: our diverse portfolio uniquely allows us to address this portion of our footprint through investing in our metals portfolio, reducing our coal production and supporting deployment of low emission technologies

3. Allocating capital to prioritise transition metals: investing in the commodities the world needs

4. Collaborating with our value chains: working in partnership with our customers and supply chain to enable greater use of low-carbon metals and support progress towards technological solutions...".

And , per Bloomberg, there are no 'sacred cows' [edit : given their methane-dispensing propensities, they'll be gone by 2050 , too]

.."Glasenberg, who has long defended coal’s role in Glencore’s portfolio, said he would support Nagle if he decided to exit the business. Although he still believes Glencore is a better steward of its coal mines, Glasenberg said that if shareholders decided the coal unit should be sold or spun off, then Nagle would have to do it.

“I’ll support him in anything that creates value for shareholders,” he said.,


But there's that confirmation bias kicking in , again..!

ATB

[gta5] 03/12/2020 10:24

The more I look at it, the more encouraged I am about the refinery agreement.
this could solve the chicken and egg situation with the SEZ, port and indirectly all the rest of the multibilion USD investments required.

We've had many false dawns in this adventure, but in my experience projects that have an immediate cash generating ability often see the light of day sooner compared to those that depend on other variables to complete first (Like Zanaga as we're all painfully aware). This refinery obviously needs a lot of engineering and money to build, but because the oil and gas is there, and its being pumped onshore already, (and the money machine and associated corruption is already running at full tilt) then this expansion is not that far fetched.

Also the fact that the chinese are building it, is very positive, as their presence on the ground means that they've got the foot in the door, machines and people on the ground....

I'd be surprised if the refinery would be an isolated effort of construction rather than the beginning of of the SEZ and associated Port.....IF that's the case, then gentlemen; we're in business! (and Sapro, and our other resource rich neighbours will be queuing to take their slot in the SEZ asap.)

IF they start preparing the land and building north of Pointe Noir, (I'm guessing in the areas north of the current processing plant, but in or (on the edge of) the assigned SEZ acreage... This in turn would open the door for the Power generation with the new Gas power plant previously awarded to the Turkish company, but not yet commenced.

Once ground is broken in the SEZ, I think the SEZ itself graduates from "vapourware" into a real project.
Considering that an oil refinery is not a trivial set of infrastructures and takes a couple of years as an absolute minimum (Assuming record speed Chinese ninja teams) they need to get digging before this weekend if they want to be up and running by 2023...

Here's to hoping.



Local news reporting in french from the 25th Nov:


Edit;

Also encouraging to see that this has been submitted to RoC parliament for approval, but more importantly that it's financed 100% by the Chinese without RoC money... As it's not an insignificant amount, it could also mean that the Chinese find RoC investable again, at least for the SEZ, which again could (should?!) lead to the unlocking of Zanaga as a consequence.

Last Edit:

With Iron ore at historical records of almost 140USD per tonne, and with China angrier at Australia than....a brexiteer in a Malaga Airport passport queue....... then, suddenly Glencore's "Zanaga option value" is looking very... well, optionable. :)

[gta5] 02/12/2020 16:45

For those of you that haven't seen it yet, a good read on current state with Iron Ore in China-Aus-Africa:



No mention specifically about Zanaga, but the big picture is pretty clear....

Also, positive news about SEZ:



"commence operations in 2023" sounds like wishful thinking, But of course anything moving in Pointe Indienne is welcome after years of navel-gazing. I'll be keeping my eyes out for the big yellow earthmovers...Any moment now....

GL, GTA.