TIDMSAV
RNS Number : 0912U
Savannah Resources PLC
27 July 2020
27 July 2020
Savannah Resources Plc
("Savannah" or the "Company")
Mina do Barroso Lithium Project Socio Economic Impact Report
Report by The University of Minho Highlights Mina do Barroso's
Potential Economic Benefits
Savannah is pleased to announce the key findings and
recommendations made by a commissioned report into the potential
economic impacts of developing the Mina do Barroso Lithium Project
("Mina do Barroso", "Project") by a team of economists from the
prestigious University of Minho (the "Report"), based in the city
of Braga approximately 80km from the Project.
The Report was undertaken over the last year and its economic
analysis drew upon the results of the Company's 2018 Scoping Study
on the Project, as announced on 14 June 2018 (the "2018 Scoping
Study"), publicly available information including policy documents
of the Portuguese Government and European Commission and
statistical data, and relevant academic papers. The key findings of
the Report are summarised below.
Economic Highlights - The Project could:
-- Contribute nearly EUR1.2 billion to Portugal's Gross Output
including EUR168m during its construction and EUR90mpa during its
operating phase
-- Contribute EUR437m to Portugal's Gross Domestic Product
including EUR65m during its construction and EUR34mpa during the
operating phase
-- Boost Portugal's annual export revenue from metal ores by 20%
with its EUR110mpa of lithium sales
-- Generate up to 2,800 direct and indirect jobs during the
construction phase and nearly 1,500 during the operational phase
based on its output contribution
-- Increase the annual income of the Boticas Municipality from
taxes by 133% plus potential for a share of royalty income paid to
the State
Key Conclusions - The Project could:
-- Provide a significant economic boost to the local area
-- Act as a template for further in-country natural resource development
-- Stimulate further economic growth via the development of
downstream lithium chemical and battery facilities in Portugal
Key Recommendations:
-- To the local authorities: Grant the necessary licences to
permit the Project; work with Savannah and local stakeholders to
secure the Project's social licence
-- To the Portuguese Government: Accelerate the permitting
process for the Project; foster dialogue between Savannah and the
local project stakeholders
-- To the European Commission: Highlight the Project's strategic
importance for the EU battery value chain to the Portuguese
Government and project stakeholders; invest in extractive industry
projects, particularly those important to the lithium battery
industry.
-- To Savannah: Engage openly with local authorities and
stakeholders and formulate an effective Benefit Sharing Plan;
recruit and source services from the local communities
To view the full press release including any maps, figures or
tables, please use the following link:
http://www.rns-pdf.londonstockexchange.com/rns/0912U_1-2020-7-26.pdf
David Archer, Savannah's Chief Executive Officer said, "The
Report completed by Professors Cerejeira and Carballo-Cruz from the
University of Minho helps to bring further clarification regarding
the many positive benefits that Mina do Barroso could bring. Their
quantitative and qualitative analysis shows that it is a project of
significant importance, not only in terms of the local economy, but
also for the national economy of Portugal, and as part of the
European Commission's plans to create an end-to-end lithium value
chain in Europe. We have always believed the Project could be a
major force for good in the local area via the creation of jobs, by
acting as a major new customer for other local businesses, through
the payment of taxes, and by making direct contributions of finance
and other resources to society through our Benefit Sharing Plan.
The Report should help everyone to understand the scale of the
contribution the Project could make locally and also clarifies its
significance to Portugal's national economy, and its potential as a
catalyst for a much larger programme of industrial development
based on Portugal's natural resources, particularly its
lithium.
"Encouragingly, these key themes also appear in a recently
published draft report, "Strategic Vision for Portugal 2020-2030
Economic and Social Recovery Plan", commissioned by the Portuguese
Government to identify recovery stimuli for the Portuguese economy
following the Coronavirus health emergency. Among a number of
measures and opportunities which government consultant, António
Costa Silva identifies in his report, is the long-term economic
benefit available to Portugal from its domestic resources of
metals, including lithium, required for the energy transition and
decarbonization of the global economy. We now look forward to the
final draft of this recovery plan which is expected at the end of
the month.
"We welcome the University Report's recommendations, along with
those of the government draft report. We are committed to working
with all of Savannah's stakeholders to create a project which
benefits them as well as the Company and its shareholders, and
establishes Portugal as a key player in Europe's e-mobility
revolution."
Other information:
Background to the Report:
The Report was undertaken over the last year and its economic
analysis drew upon the 2018 Scoping Study on the Project, publicly
available information including policy documents of the Portuguese
Government and European Commission and statistical data, and
relevant academic papers.
Authors of the Report:
The Report was led by Professors João Cerejeira and Francisco
Carballo-Cruz from the School of Economics and Management at the
University of Minho. Professor Cerejeira holds a PhD in Economics
from the European University Institute (Florence) and was the
invited scientific expert to the Scientific Council of the Labor
Relations Center of the Ministry of Labor. Professor Carballo-Cruz
holds a PhD from Oxford University and is President of the
Portuguese Association for Regional Development and a member of the
executive committee of the European Regional Science
Association.
Economic Benefits & Job Creation
For its quantitative assessment of the potential economic
benefits of Mina do Barroso the authors applied orthodox economic
'Input-Output' model methodology and relevant 2015 Input-Output
matrix multipliers for the Portuguese economy, which were published
with the national accounts by the Portuguese institute of
Statistics in 2018. This model and its relevant multipliers were
applied to data (capital expenditure, operating costs, revenue,
etc.) from the 2018 Scoping Study on the Project and converted into
Euros at an exchange rate of US$1.10: EUR1.00.
As Table 1 below shows, development of the project and the
investment of the EUR98.1m required for the project's construction,
if made wholly within the Portuguese economy, would generate a
EUR168m contribution to Portugal's Gross Output ("GO") [1] and
EUR65m to Portugal's Gross Domestic Product ("GDP")[2].
During the Project's operating phase (11 years in the 2018
Scoping study), the production and sales of lithium and co-products
of quartz and feldspar would contribute EUR90m per annum to
Portugal's GO and EUR34m to its GDP. Based on these calculations,
the Project would add a total of EUR1.16 Billion to Portugal's GO
and EUR437m to its GDP over its lifetime. In addition, if the
Project's lithium concentrate was all sold to overseas customers,
it would increase Portugal's exports from metal ores by
EUR110m/year, which is equivalent to a 20% increase over the annual
average between 2005-2019.
Based on the forecast GDP contributions and relevant job
multipliers for each input industrial category (i.e. the number of
jobs required to generate EUR1m of GDP in each category), the
Report calculated the number of 'equivalent annual jobs' which
could be generated by the Project's development and operation. For
the construction phase, the Report calculated 2,800 jobs would be
created. At the time of the Scoping Study it was assumed that
approximately 300 personnel would be required to construct the
Project, implying that 2,500 indirect jobs would be generated as a
result of the Project's construction phase. By the same method, the
operating phase was estimated to generate 1,489 jobs. Subtracting
the average annual number of direct jobs (215) during the operating
phase implies that the Project would generate 1,274 indirect jobs.
This gives an indirect: direct job ratio of 6:1, again clearly
demonstrating the significant positive impact the Project could
have on the wider economy in the local area, northern Portugal and
the country as a whole.
Table 1: Project inputs and the potential economic benefits
resulting from Mina do Barroso's development
Inputs & Assumptions Economic Benefits
(based on 2018 Scoping Study)
Investment:
---------- ------------------------------ ----------
Initial investment (Construction Change on Portugal's
CAPEX, annual metal
year 1, excluding contingencies) EUR98.1m ore exports (EUR110m/year) +20.1%
---------- ------------------------------ ----------
Sustaining investment (years EUR2.5m Contribution to Gross
2-12) value of
national product :
---------- ------------------------------ ----------
During Construction
Revenues: phase (year 1) EUR168m
---------- ------------------------------ ----------
Total revenue (Lithium + Annually during operating
co-products, phase
years 2-12) EUR1,420m (years 2-12) EUR90m
---------- ------------------------------ ----------
Total Export revenue
(100% of Li revenue, 86%
of total) EUR1,212m Total EUR1,161m
---------- ------------------------------ ----------
Annual Input costs: Contribution to GDP
:
---------- ------------------------------ ----------
Salaries (SAV employees
only, 119 During Construction
workers) EUR4.6m phase EUR65m
---------- ------------------------------ ----------
production costs (including
contract Annually during operating
mining) EUR22.8m phase EUR34m
---------- ------------------------------ ----------
Fuels & reagents EUR13.7m Total EUR437m
---------- ------------------------------ ----------
Domestic transport of product EUR6.7m
---------- ------------------------------ ----------
Shipment for export EUR6.0m Job creation : (annual
equivalent
based on GDP contribution)
---------- ------------------------------ ----------
Annual taxes: Construction phase 2,800
---------- ------------------------------ ----------
Corporate tax EUR16.0m Less direct jobs -300
---------- ------------------------------ ----------
Implied indirect job
creation during Construction
Royalties EUR3.6m phase 2,500
---------- ------------------------------ ----------
Personal income tax EUR2.3m
---------- ------------------------------ ----------
Job creation: Operating phase 1,489
---------- ------------------------------ ----------
- Construction phase 300 Less direct jobs -215
---------- ------------------------------ ----------
- Operating phase (SAV staff Implied indirect job
+ creation during Construction
Contractor staff, Avg) 215 phase 1,274
---------- ------------------------------ ----------
Source: Carballo-Cruz, F., Cerejeira J., 2020. Mina do Barroso -
Economic & Development Impacts, University of Minho,
Portugal.
Benefits for the Boticas Municipality & the local
economy
Mina do Barroso is located in the Boticas Municipality in
Northern Portugal. This Municipality has experienced a 32% decline
in its population since 1992, including a decline of over 60% in
its youth population (<25 years old) with young people
emigrating for tertiary education or work, and not returning. The
Report suggests that the de-population trend could continue if no
socioeconomic changes are made which offer young people reasons to
remain or return to the area.
The Report also highlights the challenges that could develop for
the local administration around the provision of public services
and maintenance/expansion of infrastructure if the population and
income from taxes continues to decline. Monthly average wages in
the municipality are already below the average for northern
Portugal and the country as a whole, and the public sector is the
largest local employer (30%) with the private sector dominated by
the energy industry and multiple micro-enterprises across
manufacturing, construction, agriculture, tourism and the service
sector.
Figure 1: Population trends in Boticas, 1991-2018
Source: Carballo-Cruz, F., Cerejeira J., 2020. Mina do Barroso -
Economic & Development Impacts, University of Minho,
Portugal.
The Report confirms that the Project could provide a significant
opportunity for the Municipality to address many of these long term
social and economic trends. For example, if all the direct jobs
associated with the Project offered by Savannah were taken by local
residents or those moving to the municipality, it would equate to a
9% increase in local private sector employment levels. This would
rise to 17% if all the mining contractor jobs were also taken up by
existing or new local residents. Furthermore, it is possible that
the Project could form the necessary economic incentive for young
people to remain or return to the area, which would help to arrest
and then reverse the declining population trend, while the increase
in personal incomes flowing from the Project would benefit other
businesses in the local economy. At the same time, the Project
itself would provide a major new demand source for local businesses
with the Report highlighting that 70 of the 100 largest companies
in Boticas and the two adjoining municipalities operated in sectors
relevant to the Project. The Boticas Municipality administration
would also benefit directly with its annual tax income potentially
increased by 133% based on the local taxes that would be due, plus
a further EUR1.2m per annum if the local administration received
50% of the current 3% state royalty on the Project.
Table 2: Potential annual direct impacts of Mina do Barroso
Project on local employment and Municipality income
Parameter Boticas Project Var. Notes
Municipality %
Just the private sector. An
additional 71 to 122
Jobs associated with the mining
contractor could
Employment 1,302 119 9 be added
-------------- -------- ----- ---------------------------------
Just the private sector. Average
salaries with
Wage gains values much higher than the
(EURm) 14.409 4.545 32 county average
-------------- -------- ----- ---------------------------------
Tax revenues
(Municipal)
(EURm) 0.629 0.834 133 Estimated value
-------------- -------- ----- ---------------------------------
Royalties (EURm) 0.000 1.200 n/a Estimated royalties
-------------- -------- ----- ---------------------------------
Social security
(EURm) 4.971 1.198 24 Estimated value
-------------- -------- ----- ---------------------------------
Source: Carballo-Cruz, F., Cerejeira J., 2020. Mina do Barroso -
Economic & Development Impacts, University of Minho,
Portugal.
Compatibility with Portuguese Government and European Union
Policies
The Report confirmed that the Project should be regarded as a
suitable development given Portuguese national and regional
planning policies are favourable towards mineral (lithium) resource
development, In Portugal, the valorisation of geological and mining
natural resources has been systematically included in the spatial
planning instruments, namely in the National Spatial Planning
Policy Program. Its 2019 review underlines the relevance of these
resources and the role of extractive industries in the economy and
territorial development. At regional level, particularly in the
Alto Tâmega sub-region...it is assumed that the development of the
extractive cluster and, in particular, projects related to lithium
exploration, is a major aspect in the coming years".
The Report also highlighted the potential significance of the
Project given the European Union's strategic action plan on
batteries , and its support for extracting minerals essential for
batteries.
Relevance of the Project to the development strategy for the
local area and obtaining a Social Licence to Operate
The University team observed that in the Boticas Municipality,
endogenous capital and territorial identity are central elements of
the implicitly assumed development strategy for the area. This has
helped to establish a strong brand based around quality local
products, especially in food and agricultural products, and the
area's heritage. The Report concluded that Mina do Barroso is
compatible with this overall strategy for the area as its lithium
would represent another product of the area while the spatial
constraints and relative isolation of the Project mean that its
establishment would not be impactful on other endogenous
developments.
The Report also identified the receipt from local stakeholders
of a Social Licence to Operate (SLO) as an important milestone for
the Project alongside the required regulatory approvals. The
authors advocate the establishment of a Community Development Fund,
financed with revenue from the Project and managed by a
not-for-profit Foundation administered by representatives from
local and central government, the community and associated
stakeholder groups, Savannah and independent experts.
The areas recommended for investment by such a fund include:
-- Mitigation & improvement: e.g. rehabilitation/improvement of the local housing stock
-- Improvement of shared services: e.g. health, firefighting, transport, training
-- Social Responsibility: e.g. Rehabilitation/maintenance of day
centres for the elderly, social care programmes; scholarships;
support for leisure, sports and cultural activities and
facilities
-- Sustainability: e.g. Programmes for environmental heritage
improvement, built heritage improvements and support for local
products/producers
-- Infrastructure: e.g. to maintain/improve the relevant road
network as well as water and electrical supplies
-- Business training: e.g. support the creation of a 'club' for
local suppliers, R&D, entrepreneurship programmes; tourism
development initiatives, agricultural and livestock development
programme
Savannah is in firm agreement with these findings and is in the
process of preparing its Benefit Sharing Plan which it will present
to the local stakeholders when completed and when
Coronavirus-related restrictions allow. Savannah has been following
a comprehensive CSR programme in Portugal since it first acquired a
stake in the Project in 2017. This has included:
-- Deploying a dedicated Community relations team
-- Publishing monthly community newsletters since December 2017
-- Holding multiple community meetings since 2018
-- Sponsoring or made donations to community events and public services (e.g. Firefighters)
-- Opening a staffed Information Centre in the local village of Covas do Barroso in April 2019
-- Offering site tours for groups of stakeholders from January
2020 (currently suspended due to the Coronavirus restrictions)
Conclusions:
The Report concludes that the Project can bring significant
benefits for the local, national and European economy.
Benefits at the local level: The Project could create more than
200 long term direct jobs (17% of current employment pool), help
arrest the engrained trend of de-population, bring a significant
positive impact on the local economy and community, and generate a
substantial increase in income for the Municipality.
Benefits at the national level: For the Portuguese economy the
Project could generate over EUR1.2Bn of export revenues; increase
the value of metal ore exports by 20%; increase Portugal's GO by
over EUR1.1Bn and GDP by over EUR400m; and create up to 2,800 new
jobs. It could also act as a template and incentive for more
in-country resource project development, particularly in the
lithium sector, and stimulate development of downstream activities
in the lithium industry, e.g. chemical and battery production.
Benefits at EU level: For the EU economy the Project would
partially aid completion of the lithium battery value chain
considered strategic by the European Commission; supply the EU with
lithium from a sustainably managed source which would be operated
under EU and member state regulations; and provide a catalyst and
template for further development of (lithium) raw material
production within the EU.
Recommendations:
The Report made the following key recommendations to a number of
the Project's stakeholders.
To Local Government: Grant the necessary licences for the
start-up of the project; engage and communicate with the local
community to help secure the project's SLO; assist Savannah in its
efforts to contract local staff and suppliers; use the Project as
means of attracting other businesses to the area and; utilise the
additional public revenues from the project for improving the
quality of life for local residents.
To Savannah: Deepen links with the local government and local
communities and meet the needs identified to secure the SLO;
develop strategies to contract service providers, focusing on local
firms and establish a plan for the hiring of local workers and a
training plan to develop the necessary skills; communicate in a
transparent and timely manner with all stakeholders and; contribute
annually to a Community Development Fund administered by a
foundation.
To the Portuguese Government: Accelerate the authorisation and
permitting process required to allow the project to start; foster
dialogue between Savannah and the project stakeholders to promote
the convergence of interests; improve the regulation and
authorisation procedures for the sector in general to speed more
extractive industry development; encourage further development in
the extractive industries to promote greater diversification in the
economy.
To The European Commission: Highlight the Project's strategic
importance for the EU battery value chain to the Portuguese
Government and project stakeholders; assist with the development of
up/downstream activities in the Portuguese battery value chain;
adopt legislation on the development and regulation of extractive
industries in Europe to promote sustainability, community
protection, benefit sharing and legal certainty for extractive
companies; invest via the EIB and EFSI in extractive industry
projects, particular those associated with the lithium battery
industry due to the contribution of these projects for the
transition to a low-carbon economy.
The report will be made available on our website.
Regulatory Information
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
**ENDS**
For further information please visit www.savannahresources.com
or contact:
Savannah Resources PLC Tel: +44 20 7117 2489
David Archer, CEO
SP Angel Corporate Finance LLP (Nominated Tel: +44 20 3470 0470
Advisor)
David Hignell / Charlie Bouverat
finnCap Ltd (Joint Broker) Tel: +44 20 7220 0500
Christopher Raggett
WH Ireland (Joint Broker) Tel: +44 20 7220 1698
James Joyce/ Matt Chan (Corporate Finance)
Adam Pollock/ Jasper Berry (Corporate
Broking)
St Brides Partners Ltd (Financial PR) Tel: +44 20 7236 1177
Charlotte Page / Cosima Akerman
About Savannah
Savannah is a diversified resources group (AIM: SAV) with a
portfolio of energy metals projects - lithium in Portugal and
copper in Oman - together with the world-class Mutamba Heavy
Mineral Sands Project in Mozambique, which is being developed in a
consortium with the global major Rio Tinto. The Board is committed
to serving the interests of its shareholders and to delivering
outcomes that will improve the lives of the communities we work
with and our staff.
The Company is listed and regulated on AIM and the Company's
ordinary shares are also available on the Quotation Board of the
Frankfurt Stock Exchange (FWB) under the symbol FWB: SAV, and the
Börse Stuttgart (SWB) under the ticker "SAV".
[1] Gross Output ("GO") is the measure of total economic
activity in the production of new goods and services in an
accounting period. It represents the total value of sales by
producing enterprises (their turnover ) in an accounting period,
before subtracting the value of intermediate goods used up in
production.
[2] Gross Domestic Product ("GDP") is equal to the Gross Output
(GO) minus the total cost of material, supplies and services used
to produce final goods or services.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
DRLKKABDKBKBDOB
(END) Dow Jones Newswires
July 27, 2020 02:00 ET (06:00 GMT)
Savannah Resources (AQSE:SAV.GB)
과거 데이터 주식 차트
부터 6월(6) 2024 으로 7월(7) 2024
Savannah Resources (AQSE:SAV.GB)
과거 데이터 주식 차트
부터 7월(7) 2023 으로 7월(7) 2024