Eritrea-Based Potash Project Primed to Service Budding Global Market

Development News
With few resources left in the world that are producing potassium sulphate, which is now considered a 'premium product', Australian company Sunridge Gold is rushing through the studies at its Colluli potash project in Eritrea to get the product to market.
With few resources left in the world that are producing potassium sulphate, which is now considered a ‘premium product’, Australian company Sunridge Gold is rushing through the studies at its Eritrea-based Colluli potash project to get the product to the global market

By Natalie Greve,

SYDNEY-listed South Boulder Mines MD Paul Donaldson says the company’s developing Eritrea-based Colluli potash project is well positioned to supply what he believes will be a likely increase in global demand for potassium chloride and potassium sulphate, which are chiefly used as fertilisers.

“The fundamentals are exceptionally good for fertilisers. A growing population, the reduction of arable land and changing dietary preferences mean that fertiliser consumption will grow in future and it’s an essential agricultural commodity; it can’t be substituted,” he told Mining Weekly Online on Monday.

Donaldson said the potassium chloride market would continue to grow in future, but would take a while to absorb the additional capacity that has come online since the dismantling of Russian and Canadian “cartels” in the last few years.

He expected the price of this salt to increase from its current price of around $300/t up to $450/t.

Potassium sulphate, meanwhile, offered greater upside potential, as it was considered a “premium” product and little productive capacity had come online in recent years.

“There aren’t many resources or new projects producing potassium sulphate. That’s why we’re rushing through our studies [at Colluli] to get the product to market. The fundamentals [for this product] are very good,” he commented.

South Boulder last week reported that, following the successful completion of metallurgical testing at its Colluli project, in which it owned an equal stake along with the State-owned Eritrean National Mining Company, certain grinding and thickening infrastructure had been eliminated from the initial process design.

Potassium yields in excess of 80% had been achieved from the testwork to date, with overall recovery further enhanced by the capture and processing of brines through a series of recovery ponds.

The precipitated potassium salts created in these ponds would be reclaimed and combined with the processing plant feed streams.

“Importantly, the improved capital and operating costs, combined with improved yields, are expected to have a material positive economic impact,” the company said in a statement at the time.

Elaborating on the significance of this development, Donaldson said this would enable the company to lower its cost base to produce a product from the 200-million-ton resource that offered a “substantial” price premium.

“We are extremely happy with the progress the project team has made on the processing plant design and testwork. The simplicity of the process, the use of all potassium-bearing salts, the highly favourable yields and the robustness of the mine plan are positioning the project for an exciting future,” he commented.

South Boulder was now looking to complete the preliminary feasibility study by March and was in the process of collecting samples to provide feed material to pilot a number of elements of the process.

The definitive feasibility study would likely be completed by the middle of 2015, after which South Boulder would look to the market for project financing.

The $400-million construction of the mine and plant was targeted to begin by the end of 2015 and was expected to take between 18 months and two years, with initial production set for 2018.