PERTH (miningweekly.com) – More than 300-million tonnes of Joint Ore Reserves Committee-compliant rock salt minerals have been identified at the Colluli potash project, which could add potential revenues, owner Danakali said on Wednesday.

The rock salt is located directly above the potassium-bearing salts within the Colluli resource, in Eritrea, and would be extracted using surface miners.

Danakali noted that mine planning work to date had indicated that between one-million and two-million tonnes a year of rock salt could be mined at Colluli, for a 425 000 t/y sulphate of potash (SoP) production module.

“This material represents excellent upside potential for the project. The fact that this material will be mined from the deposit, is of suitable quality for de-icing and other applications in nearby jurisdictions, and is in close proximity to the coast, means that the rock salt represents a potential additional revenue stream for the project,” said Danakali MD Paul Donaldson.

“In addition, we believe the favourable geographic location of the project and highly favourable ambient conditions provide the foundations to establish a salt business of relative significance over the passage of time.”

A definitive feasibility study (DFS) on the Colluli potash project is expected to be completed by the fourth quarter of this year.

A March prefeasibility study into the project estimated that it would require a capital investment of around $442-million. The study examined a two-module development with expected production of 425 000 t/y SoP for the first five years of operation, increasing to 850 000 t/y for the remainder of the project's proposed 30-year mine life.

Since March, Danakali, previously known as South Boulder Mines, has completed pilot tests to demonstrate the Colluli process design and to generate high-purity SoP.

Donaldson noted that the definition of the rock salt resource allowed the company to engage in discussions with potential offtakers for the product.

Further evaluation of the long-term potential for a large-scale salt business to complement the planned SoP development would also be conducted following the completion of the DFS.