Tag Archives: Danakali

Aggreko to help power up Colluli potash project

Aggreko has been appointed as the preferred power supply contractor for the 12 MW heavy fuel oil (HFO) power plant at the Colluli potash project in Eritrea, Danakali has reported.

The power company will provide a full scope of support services for the supply, commissioning, and maintenance of the power plant, then transfer to the jointly-owned Colluli Mining Share Company (CMSC), under a five-year buy-own-operate-transfer (BOOT) contract. Aggreko will also provide the funding for the power solution, which provides certainty over delivery of this preferred solution, Danakali said.

The choice of the BOOT agreement is due to the equipment being available now and not needing to be built, Danakali, a 50:50 owner of CMSC along with the Eritrea government, said. This will also de-risk the development schedule, it added.

The costs of the power solution provided by Aggreko over the five-year contract period is lower than the front-end engineering design study results, according to Danakali.

Aggreko is funding the capital expenditure required for the power plant and all equipment will be transferred to CMSC at no extra cost at the end of the contract period, Danakali explained. This power solution is scalable and can increase/decrease according to CMSC’s needs, it added.

The agreement between Aggreko and CMSC is subject to the conclusion of ongoing negotiations to optimise the scope of works, contract pricing and execution; and board approval of the final investment decision for Colluli.

In July, the Eritrean Ministry of Energy & Mines paved the way for construction to start at the project after accepting the Colluli Notice of Commencement of Mine Development.

Niels Wage, CEO of Danakali, said: “We are very pleased to announce the appointment of Aggreko as our single power provider. With 55 years of experience in delivering high-quality, reliable service to a large number of projects, we are confident they have the capabilities to provide our power needs for Colluli.

“At the early stages of the project development, the HFO solution will provide us with flexibility and reliability, and as confirmed by social and environmental impact assessment, Colluli will have a relatively small impact on the environment. Going forward, once project development is in more of a steady state, we will look to diversify our energy sources towards renewables available in the Danakil region, as per our commitment to sustainable and environmentally friendly solutions.”

John Lewis, Managing Director, Africa – Aggreko, added: “Our extensive experience in Eritrea and knowledge of the local market means that we are ideally placed to provide a solution which meets the specific needs of Danakali and deliver a reliable power supply for this project.”

Colluli has a JORC-2012 compliant measured, indicated and inferred resource of 1,289 Mt at 11% K20 equivalent and 7% kieserite.

RA International to set up camp at Colluli sulphate of potash mine

Danakali reports that the Colluli Mining Share Company (CMSC) has appointed RA International Group as its preferred contractor for the supply of accommodation, support services and other infrastructure buildings in support of the Colluli sulphate of potash project development, in Eritrea.

RA, listed on the London Stock Exchange’s AIM board, specialises in building, operating and maintaining facilities in remote and challenging conditions across Africa, providing complex humanitarian, governmental, mining, and other commercial developments and services, Danakali says.

Colluli has a JORC-2012 compliant measured, indicated and inferred resource of 1,289 Mt at 11% K20 equivalent and 7% kieserite. Development is already underway with expected production in 2022.

As part of the agreement with CMSC, owned 50:50 by Danakali and the Eritrean National Mining Corporation, RA will supply, deliver and install a mine accommodation camp as well as a plant administration and service facilities for the Colluli mine site. Additionally, it will provide comprehensive camp services incorporating catering, cleaning, laundry, pest and vector control, grounds keeping and waste management.

The plant administration and services facilities will incorporate administration offices, medical clinic, warehouses, and workshops (see graphic above, credit: RA International). The accommodation camp, meanwhile, has been designed to accommodate 600 personnel during the production phase with the flexibility to accommodate 1,115 during the construction phase. The 600 person camp capacity is exclusive of camp services personnel, which will have an additional camp, provided by RA, located within the overall camp boundary.

Niels Wage, CEO of Danakali, said: “I am pleased to announce the appointment of RA International as our preferred accommodation and support services contractor. They have significant experience in executing projects of the scale and quality required for the Colluli project. We are confident in RA International’s capabilities to deliver a high-quality product and service.”

Soraya Narfeldt, CEO of RA International, said: “We are delighted to have been chosen as the preferred contractor to work with Danakali and its partners on this project which we see as globally significant.

“The United Nations Development Programme (UNDP) has indicated Colluli has the potential to significantly boost the Eritrean economy and have a substantial positive impact on the Sustainable Development Agenda of Eritrea. The appointment of RA International is testament to sound execution of our growth strategy, highlighting continued new business momentum with another significant award in the mining sector.”

Construction nears at Colluli potash project following Eritrea ministry nod

Danakali and the Eritrean Government’s plan to put the Colluli potash mine into production is accelerating after the Eritrean Ministry of Energy & Mines accepted the project’s Notice of Commencement of Mine Development.

Acceptance of the notice is one of the conditions precedent to the financing for the Colluli project and is a positive step toward achieving financial close of the project facilities, Danakali said.

Prior to issuing this notice, the jointly-owned Colluli Mining Share Company (CMSC) had satisfied several key Colluli development preconditions including executing a Mining Agreement and having a Mining Licenses issued; submitting and obtaining approval for the Social & Environmental Impact Assessment Study and Social & Environmental Management Plans; and submitting the commercial sulphate of potash production expectations over the life of the mine.

Colluli, owned 50:50 by Danakali and the Eritrean National Mining Corporation, has a JORC-2012 compliant measured, indicated and inferred resource of 1,289 Mt at 11% K20 equivalent and 7% kieserite.

Upon accepting the notice, the ministry, Danakali said, also showed support for the financing of the Colluli project by:

  • Granting time to commence the commercial production within 36 months from submission of the notice, (mid-December 2022);
  • Consenting to the security to be granted in support of the financing; and
  • Consenting to the account structure for the financing for the Colluli project.

The notice was submitted to the ministry by the CMSC on December 17, 2019, however the process has been slower than expected due to COVID-19-related lockdowns in Eritrea.

In accordance with the Mining Agreement, CMSC has 36 months from submission date to spend $200 million within the Mining Licence Area, Danakali said.

Along with the acceptance of the notice, the ministry has also granted all required permits, licences and authorisations for infrastructure construction and development outside the Colluli Mining Licence area. This includes the Sea Water Intake and Treatment Area at Anfile Bay (WITA); pipeline and access corridor of 87 km between the WITA and the Colluli process plant; and Colluli site access road of 57 km connecting Colluli to Marsa Fatuma.

Niels Wage, CEO of Danakali, said: “This year, the project team has made significant progress through management of DRA during Phase 1 and 2 of the EPCM works and most recently by commencing the necessary test works, enabling us to maintain forward momentum of the project development.

“I look forward to updating the market on the progress of our project in due course.”

The company has previously said production could commence in 2022.

EMW wins contract mining gig at Colluli sulphate of potash project

Earth Moving Worldwide (EMW) has been confirmed by the Colluli Mining Share Company (CMSC) as its preferred mining contractor at the Colluli sulphate of potash project, in Eritrea.

Danakali, which owns 50% of Colluli alongside the Eritrean National Mining Corp, said EMW has extensive global experience in mining services and will provide the project with strong commercial and technical outcomes.

The agreement covers the pre-production period (development) plus the first five years of production at Colluli, with the scope including the provision, operation and maintenance of excavation, haulage and dewatering equipment.

Colluli has a JORC-2012 compliant measured, indicated and inferred resource of 1,289 Mt at 11% K20 equivalent and 7% kieserite.

Danakali said a competitive tendering process was conducted with technical support from AMC Consultants and Majesso Consulting, and execution of the mining services contract was expected early in 2020, with production due to commence in 2022.

Chief Executive Officer of Danakali, Niels Wage, said: “The confirmation of EMW is another major step for Danakali and Colluli. We are pleased to be working with a company as experienced as EMW who share our commitment to the wellbeing of people and the environment surrounding Colluli.”

Member of the Board of Directors of EMW, Yves Aertssen, said: “EMW is delighted to be selected by Danakali to be part of Colluli. Our shared culture and values were clearly evidenced during the tender process. We are excited to build on this shared vision and work closely with Danakali and all stakeholders in the project to justify the confidence shown in EMW.”

EMW is a private earth moving, mining, processing, coastal protection and reclamation services company with over 140 years’ of global experience in earth moving and haulage activities.