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Elandsfontein phosphate project, South Africa – update

Aerial view of Elandsfontein phosphate project

10th September 2021

By: Sheila Barradas

Creamer Media Research Coordinator & Senior Deputy Editor

     

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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 phosphate deposit is the largest 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
The target date for commissioning has been moved to the fourth quarter of 2021.

Latest Developments
Significant progress continues to be made at the project, with earthworks and civil construction complete.

The outstanding appeal against the Elandsfontein water-use licence was heard from February 1 to 4, during which all evidence was heard by the Water Tribunal.

The Water Tribunal issued a directive to all parties, setting out the dates to be met for heads of arguments, to allow for a ruling on March 10.

The appellant was subsequently granted two postponements for submitting its heads of arguments, which has delayed the date of the ruling to possibly September.

Kropz has further reported that, owing to a large number of critical path and near critical path items being managed concurrently, a number of minor setbacks have been encountered in the project, pushing the target date for commissioning later into the fourth quarter of this year.

These setbacks included a shortage of steel and industrial oxygen, owing to the Covid-19 pandemic, and days lost as a result of adverse weather and illegal work stoppages.

In addition, the fabrication, installation and assembly of structural steel and platework are nearly complete, and all major mechanical equipment is installed at Elandsfontein, with electrical and instrumentation installation progressing well.

In preparation for operational readiness, the mining, plant operations, concentrate hauling, and port handling contracts are in the final stages of negotiation.

However, a funding shortfall of about $8.5-million is expected in respect of the commissioning and ramp-up of Elandsfontein in the fourth quarter of this year and the first quarter of 2022 before first revenue from the sale of Elandsfontein rock, which is expected in the first quarter of 2022.

Kropz’s management is, therefore, investigating various alternatives to bridge the respective funding shortfalls to ensure the smooth commissioning and ramp-up of the project to first product exports.

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.

Edited by Creamer Media Reporter

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