JOHANNESBURG (miningweekly.com) – Dual-listed agriculture, processed food and engineered materials manufacturer Israel Chemicals Limited (ICL) will acquire all shares it does not already own in TSX-listed Allana Potash, which owns a potash mine in Ethiopia, for C$137-million.

ICL already held a 16.36% stake in the potash company and would acquire the remainder of the shares at C$0.50 a share, payable in cash and ICL shares.

ICL acquired the initial stake in Allana through an alliance agreement signed in 2014 that included an offtake agreement in terms of which ICL had the right to buy and market one-million tonnes of potash mined from the Danakhil mine, in the Afar region of north-east Ethiopia, once production started.

Allana held a concession to mine potash in Ethiopia, through its subsidiary, Allana Potash Afar. Pursuant to a feasibility study, Allana estimated that the Danakhil project could yield up to one-million tonnes of muriate of potash production a year for 25 years.

ICL produced potash at mines in Israel, Spain and the UK, and, in 2014, it sold over five-million tonnes of potash to external customers worldwide.

Acquiring ownership of Allana would enable ICL to control the development of the Danakhil project, accelerate preconstruction engineering design work, as well as secure project financing and reduce the company's risks associated with the project.

It would further contribute to ICL's commitment to the project, thereby increasing the potential of its successful development.

ICL believed that the Ethiopia government was fully supportive of developing the country's potash resources to unlock the potential of agriculture, increase productivity and improve balanced fertilisation, particularly among Ethiopia's small farmers.

Over the past year, ICL accelerated its potash production and market development efforts in Africa to create a market for potash by sponsoring, in conjunction with Ethiopia's Ministry of Agriculture and its Agriculture Transformation Agency, a 'Potash for Growth' awareness programme.

The programme included the creation of hundreds of potash demonstration plots in Ethiopia, support of a nationwide soil fertility mapping effort to recommend optimal fertiliser applications at local levels, and sponsorship of research by graduate students at Ethiopian universities to increase knowledge of balanced fertilisation and develop specialists in plant nutrition.