Name of the Project
Kola potash project.

Location
In the Kouilou province of Congo-Brazzaville.

Project Owner/s
Potash development company Kore Potash.

Project Description
Globally, the Kola project is not only one of the shallowest muriate of potash (MoP) deposits but also one of the highest-grade undeveloped potash deposits.

The Kola definitive feasibility study (DFS) proposes mining of the Kola sylvinite, and the production of about 2.2-million tons a year of MoP over a 33-year mine life and its export.

The Kola orebody is planned to be mined using conventional underground mechanised methods, extracting the ore within ‘panels’ using continuous miner machines of the drum-cutting type. The mine design adopts a relatively typical layout, including panels, comprising rooms and pillars.

Mine access will be provided by two vertical shafts, each 7 m in diameter. The shafts will be sunk in the centre of the orebody. To provide access underground, the intake shaft will be equipped with a hoist and cage system for transportation of persons and material. The exhaust shaft will be equipped with a pocket lift conveyor system to continuously convey the mined-out ore to the surface. Both shafts are about 270 m deep.

Underground conveyor belts will be used for ore transportation in all the areas of the mine. The belt conveyors are distributed in the main and submain haulages and, ultimately, in the working panels near the continuous miner working face. The ore will be placed on the belts from feeder breakers that are fed by the shuttle cars. Belt conveyors will carry the ore loaded by the feeder breakers to the ore bins. The ore is then conveyed from the ore bins to the pocket lift system located in the exhaust shaft.

Ore from underground will be transported to the process plant by a 35-km-long overland conveyor.

A conventional potash flotation plant has been designed for the project. The design strategy adopted delivers a process plant designed to produce 2.2-million tonnes a year of MoP at a potassium chloride grade of 95% and that will accommodate the variety of run-of-mine feedstock characteristics expected to be encountered during the life of the project.

The economic model is based on a 23-year mine life, based on ore reserves of 152.4-million tons and 9.7-million tons of inferred mineral resources, and an additional ten years (for a 33-year mine life) when the exploitation of a portion of the inferred mineral resources (70-million tonnes)is included.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an after-tax real net present value, at a 10% discount rate, of $1.45-million and a real ungeared internal rate of return of 17%, with a 4.3-year payback from first production.

Capital Expenditure
Preproduction capital is estimated at $2.1-billion on an engineering, procurement and construction management basis.

Planned Start/End Date
The project has a 46-month construction period, with a start date to be determined following the advancement of construction contract negotiations and project financing.

Latest Developments
Kore Potash and African strategic advisory, corporate finance and alternative investment group Summit Africa have signed a nonbinding memorandum of understanding (MoU) to arrange the total financing required for the construction of the Kola potash project.

The MoU with Summit outlines a roadmap to optimise, fully finance and build Kola using debt and royalty financing.

Summit, representing a consortium of investors and engineering firms, and its technical partners, Sepco Electric Power Construction Corporation and China ENFI Engineering Corporation, will work with Kore to undertake an optimisation study to reduce Kola’s capital cost to less than $1.65-billion.

Summit will work with potential financing partner BRP Global to ­– subject to completion of its due diligence and achieving the target capital expenditure through the optimisation study – present a financing proposal on behalf of the Summit consortium based on debt and royalty funding for 100% of the Kola construction capital costs.

Under the proposed financing structure, Kore will not be required to contribute to the capital needed to build the project and will retain a 90% equity interest in Kola.

Under the proposed financing arrangements, the Congo-Brazzaville government will retain its 10% shareholding in the Kola project.

Kore will contribute about $900 000 to the optimisation study costs. Sepco will cover the remaining 50% of the estimated costs of the study.

Kola remains one of the most attractive potash projects in the world, with low market operating costs, Kore claims.

Key Contracts, Suppliers and Consultants
Technip France, Vinci Construction Grands Projets, Egis International and Louis Dreyfus Armateurs (DFS); Met-Chem DRA Global and AMC Consulting (specialist subconsulting); Met-Chem DRA Global (mineral resource estimate); SRK Consulting (environmental- and social-impact assessment); and Jukes Todd, Hatch and Wood (reviews of the final draft DFS).

Contact Details for Project Information
Kore Potash, tel +27 11 460 9140.
Tavistock, on behalf of Kore Potash, tel +44 207 920 3150 or email kore@tavistock.co.uk.