Danakali Ltd (ASX:DNK) (LON:DNK) (OTCMKTS:SBMSF) welcomes the award of the 2019 Nobel Peace Prize to Ethiopian Prime Minister Abiy Ahmed as it is indicative of the progress being made in the Horn of Africa.
The company’s world-class Colluli Potash Project is in neighbouring Eritrea and the 2019 Nobel Peace Prize recognises the rapid advancements in Ethiopia-Eritrea relations.
Regional peacemaking efforts
Ahmed’s recognition is for his pursuit of democratic reforms and regional peacemaking efforts and “in particular, for his decisive initiative to resolve the border conflict with neighbouring Eritrea,” said the chair of the Nobel Committee.
Danakali is focused on the development of Colluli, an advanced stage and economically attractive project relative to other sulphate of potash (SOP) greenfield development projects.
This project is 100% owned by CMSC, a 50:50 joint venture between Danakali and Eritrean state company ENAMCO.
Benefit to region
The company says that improvements to the diplomatic and economic status of the Horn of Africa were a benefit to the entire region as well as to the Colluli project.
These factors along with the Nobel Award win were evidence of the rapidly improving geopolitical dynamics for the region and Eritrea in particular.
In a statement, Ahmed’s office said: “This victory and recognition is a collective win for Ethiopians, and a call to strengthen our resolve in making Ethiopia - the New Horizon of Hope - a prosperous nation for all.”
A “wonderful example”
UN General Secretary Antonio Guterres said Ahmed’s leadership has set a “wonderful example” for the international community.
The progress made in advancing Ethiopia-Eritrea relations include:
- A peace accord between Ahmed and his Eritrean counterpart, Isaias Afwerki, which formally ended a 20-year military standoff that followed Eritrea’s secession from Ethiopia in 1993 and a border war in 1998-2000; and
- The two leaders vowed to improve political, economic and diplomatic ties, and re-open the border.
After signing an agreement to restore ties, the countries have reopened embassies and resumed flights between the nations while Eritrea has agreed to open its port to landlocked Ethiopia.
Danakali is well advanced with pre-development activities at Colluli.
A binding offtake agreement has been signed with EuroChem for a minimum of 87% and up to 100% of module I SOP production while credit approval has been received for a US$200 million senior debt facility for CMSC.
A FEED study has confirmed an advanced stage and economically attractive SOP greenfield development and all material permits are in place.
Colluli hosts a 1.1 billion tonnes ore reserve which is sufficient to support a mine life of almost 2009 years at planned production rates.
The shallow mineralisation allows for low-cost open-cut mining while the processing option selected is simple, proven and low cost.
There are favourable logistics, including transport to port, and the project is set to provide significant economic, social, community and environmental benefits to Eritrea and the region.