TORONTO (miningweekly.com) – Allana, the company that owns a potash project in Ethiopia, on Tuesday said an independent early assessment gave the asset an after-tax net present value of $1.85-billion, and a 36.8% internal rate of return.
The preliminary economic assessment (PEA) predicted it would cost $796-million to build a one-million-ton-a-year mine at the Danakhil project, in line with CEO Farhad Abasov’s earlier projections.
He said in a statement on Tuesday that the capital cost figure, which included port and other infrastructure, “makes this project one of the lowest-cost and potentially highest-return potash projects worldwide”.
The PEA concluded that a solution mining operation would be more profitable than conventional potash mining.
It forecast operating costs of $90.54/t for the Danakhil project, including transportation to the port of Djibouti.
“The PEA also allows Allana to move forward confidently with its project finance plans and ongoing talks with potential strategic partners,” Abasov said.
He told Mining Weekly Online earlier this year that Allana hoped to being the project into production in 2014.
Other companies with projects in the area include BHP Billiton, Ethiopian Potash, and Australian junior South Boulder.