Hi Max ...It almost looks like a race to market with the way the basin is ...so many companies trying to position themselves as the next company to be a mine...
Libertas also took a look at the latest presentation by Allana Potash (TSX:AAA) on its Dallol project in Ethiopia which seems to them be about six months ahead of the Colluli project over the border in Eritrea which is being developed by South Boulder Mines (ASX:STB). They note that, initially, Allana plans to truck potash more than 400km to the port of Djibouti but over time a rail link may be built. They point out that while Ethiopia and Eritrea “don’t get on”, the Ethiopia-Djibouti border is open. “The rail link depends on finance and to a certain extent whether BHP [Billiton] discovers potash as well. BHP holds a large block of undrilled ground just to the southeast of Dallol astride the route to Djibouti”. Libertas adds that Allana’s property surrounds a potash project owned by an Indian company which is almost as advanced as Dallol. The road is said to be able to cope with the traffic from two 1 million tonnes a year mines next door to each other.
South Boulder’s Colluli has a trucking distance, by comparison, of just 75km. Sydney-based Foster Stockbroking has told clients that South Boulder’s scoping study highlights the fact that this project is in the lowest quartile in terms of capital costs. The study was based on annual production of 1 million tonnes from an open pit, with the road link to a proposed port at Anfile Bay in Eritrea. Colluli’s development cost is estimated at between $US500 million and $US750 million, with the definitive feasibility study due in 2013 and production scheduled for 2016. Foster still argues that STB is a potential takeover target. Their note highlights the significant investment in potash now under way from the majors along with strategic investing from India and China.
Ethiopia is getting a lot of attention lately. Just heard a piece on the radio detailing Ethiopia's exploding economy. They mentioned recent huge Indian & Chinese investments. Also, they mentioned how attractive Ethiopia is to investors because they're at the ground floor and the projected growth is enormous.
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