Name of the Project
Elandsfontein phosphate project.

Location
Saldanha Bay, in the Western Cape, South Africa.

Project Owner/s
The Elandsfontein project is held by Kropz (70%), African Rainbow Capital, or ARC (25%), and a smaller empowerment partnership (5%). Ubuntu Botho Investments forms part of the ARC structure.

Project Description
The Elandsfontein deposit is the biggest sedimentary phosphate deposit in South Africa.

The phosphate mineralisation is contained in the Varswater formation, with the phosphate occurring in phosphatised shell fragments and phosphorite pellets. The remainder of the deposit consists of silica sand and calcium oxide.

The project has an initial mine life of about 14 years and can deliver one-million tonnes a year of phosphate rock concentrate at steady state.

The processing plant will produce a final saleable concentrate to the expected specification of 68% bone phosphate of lime and about 31% phosphorus oxide using a flotation configuration of direct flotation, followed by a reverse flotation circuit.

Potential Job Creation
Not stated. 

Net Present Value/Internal Rate of Return
Not stated.

Capital Expenditure
Kropz has spent $120-million to bring its Elandsfontein phosphates mining and processing project into production and requires an additional $16-million to cover its augmentation.

Planned Start/End Date
While the project was first scheduled to start producing phosphate in 2018, it reported first production of phosphate rock concentrate only on March 18 this year.

The Elandsfontein project has been plagued by various delays since October 2017, when its water-use licence was contested by an environmental protection group. Other challenges have included changes to its processing plans and Covid-19-related delays.

Latest Developments
Kropz has entered into a new conditional convertible equity facility of up to R550-million – about $31.6-million – with major shareholder ARC Fund to advance the ramp-up of operations at the Elandsfontein phosphate project.

The project requires additional working capital, owing to delays in the ramp-up of operations and subsequent delays in first revenues, the company has said. 

In addition, the funding will also provide working capital for the company for general corporate purposes, and further funding of about $1-million for working capital and early site works at the Hinda project, in Congo-Brazzaville. 

The new R550-million equity facility comprises a total commitment of up to R550-million provided by ARC, which can be drawn down at the discretion of Kropz. 

Repayment of the new equity facility capital amount will, at the election of ARC, either be in the form of the conversion into ordinary shares or payable in cash. 

The first drawdown is expected on December 1. 

The new equity facility will be secured by the shares that Kropz holds in phosphate mining concern Cominco Resources.

Key Contracts, Suppliers and Consultants
DRA (engineering, procurement and construction management); Minopex (processing plant operation); and VDM Transport.

Contact Details for Project Information
Kropz, tel +27 21 930 0927 or email info@kropz.com.