VANCOUVER (miningweekly.com) – London-based potash project developer Circum Minerals has secured a mining licence for its Danakil potash project.
The licence was approved by the Council of Ministers of the Federal Democratic Republic of Ethiopia and gives Circum exclusive access over the 4.9-billion-tonne Canadian National Instrument 43-101-compliant potassium resource contained within the 365 km2 licence area, for an initial period of 20 years. It is renewable indefinitely for further ten-year periods, should the project continue to be financially viable.
The licence allows the company to exploit potassium-bearing minerals which exist at relatively shallow depths within the vast licence area. The minerals will be exploited by solution mining, the lowest-risk mining method suitable to this region, and will be processed by crystallisation in solar ponds before final refining in a process plant.
A 2015 definitive feasibility study (DFS), which was optimised in February 2016, calculated an after-tax project net present value, at a 10% discount, of $2.1-billion and an after-tax internal rate of return of 25.8%.
The DFS estimated that the first phase of development capital would amount to $940/t, compared with the capital requirement of $2 000/t for similar completed or planned projects in Canada and Belarus.
The DFS, completed by SENET, outlined output of two-million tonnes a year of muriate of potash (MOP) and 750 000 t/y of sulphate of potash (SOP) from low-cost, low-risk solution mining.
The initial development capital was pegged at $2.3-billion, with peak funding of about $1.8-billion required, owing to an early revenue stream from initial production.
The mine gate cash costs were projected to be among the lowest in the world at about $38/t MOP and $112/t SOP.