Potash project developer Circum Minerals last month announced the results of the optimised definitive feasibility study (DFS) for its potash project in the Danakil basin, in Ethiopia.

The optimised DFS improved a number of the project parameters set out in the original DFS completed in August last year. It also confirms that the project is expected to be a world-class project in size and could potentially become the world’s lowest-cost potash producer and a major supplier to the Asia Pacific markets, states Circum.

The project has measured, indicated and inferred resources of 4.9 billion tonnes at 18.1% potassium chloride (KCl), while seismic data suggests a potential total resource of 12-billion to 14-billion tonnes of KCl.

The optimised DFS also found proven and probable reserves of 107.8-million tonnes of KCl equivalent, with an expected yearly production of two-million tonnes of muriate of potash (MOP) and 750 000 tonnes of sulphate of potash (SOP) for Phase I.

Reserves will support a 26-year mine life for Phase I, which will include a three-year ramp-up.

The optimised DFS also found that development capital, including contingency, for Phase I is $2.3-billion; however, peak funding is estimated at $1.8-billion, owing to early revenue streams, which are expected to be generated from initial production.

The company, together with independent consultants South Africa-based Senet and Germany-based K-UTEC AG Salt Technologies, reviewed the costs in the 2015 DFS. Through their work on the optimised DFS, development capital costs were reduced by $276-million and operating costs were reduced by about $3/t, which have had a favourable impact on the project’s economics.

Circum chairperson and cofounder Stephen Dattels also announced last month that Morgan Stanley had been appointed the financial adviser to conduct a strategic review of Circum’s Danakil project.

The strategic review will focus on the potential introduction of third-party strategic investors and joint venture parties at corporate or project level, as well as corporate or project-level debt and/or equity investments.

Circum has identified a number of strategic and financial parties interested in being involved in various aspects of the project’s development, given its importance to the potash industry and the Asia Pacific markets.