Green Ammonia Project, page-101

One project that seems to be going copletely unnoticed by the market is MNB's green ammonia project.
As a bit of a background, Angola has ample spare capacity of extremely cheap green electricity for MNB's current needs but it is also growing that capacity markedly;
https://twitter.com/MinbosResources/status/1500638826083287041?s=20&t=A8W1lij6CYCU2kkQk6K7SQ

"A country blessed with many rivers, Angola’s hydropower potential is among the highest in Africa, estimated at 18,200 MW.The government’s stated aim is to substantially grow its hydropower generation capacity from its current levels of around 1,200 MW - 9,000 MW by 2025 $mnb "

Angola has already allocated to MNB the required power and land next to an existing hydro power station for a 100MW project with a further 100MW also applied for.

Green electricity cost in Angola is just 1.5c/kw (see slide below from MNB's last presentation). According to that same slide, 1.5c/KW is the equivalent of a gas price price of just $4/GJ. The chart of the European natural gas import price below shows an average price of around $7/GJ over the last 5 years (ignoring the massive move higher this year). That means that MNB's green ammonia project will easily be more profitable than the production in Europe of 3-5 years ago. The European import gas price is now over $42!
Even with a massive reduction in price to the 5 year average, MNB's green ammonia project will very likely be more profitable and especially very competitive in Angola considering the statement in the slide below that "local fertiliser production at the farm gate saves ocean, port and land transport costs equivalent to half the gas consumption".




The company had put this info out there last year but the market appears to be oblivious to it at this stage.
I expect that fresh news and significant further progress on this project should see a very large re-rate for MNB with a mc still around $80mill.

According to the quote below, a 100MW electrolyser will cost around US$120 million at the top of the price range provided, for a top quality European electrolyser with the highest efficiency.

"In February, analyst Bloomberg NEF revealed in a report that Chinese electrolyser systems are up to four times cheaper than Western equivalents — $300/kW compared to $1,200/kW — and that Chinese OEMs had begun exporting their machines to the US and Europe.

https://www.rechargenews.com/energy-transition/exclusive-beijing-hydrogen-body-admits-that-chinese-electrolysers-cannot-compete-with-western-machines-yet/2-1-1202835

MNB has a huge operating cost advantage with green electricity at 1.5c/kw and needs an electrolyser and no green power generating assets. Most other projects will also need much more capital intensive solar and wind farms, pushing their capital requirements up by around three fold over MNB's. E.g. Infigen energy’s wind farm "was completed in October 2009 at a cost estimated between A$220 million and A$370 million". That was 2009.

https://en.wikipedia.org/wiki/Capital_Wind_Farm

So while MNB would need around US$120mill for an electrolyser, equivalent wind/solar green projects would need more like US$360mill for a similar sized project. For those projects to be worth pursuing, you would have to expect a NPV at least as high as the capital cost? So the NPV for a 100MW wind/solar project is probably going to be around US$360mill or more. That's nearly A$500mill. NPV calculations factor in the cost of capital that needs to be paid. With a capital requirement around US$240mill less for MNB, is it reasonable to expect MNB's NPV to be more like $360+ $240 = $US600 million?

Whatever it works out to, it has major cost advantages for a green ammonia project and it will certainly be worth multiples of the current mc.