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Kola potash project, Congo-Brazzaville – update

Image of potash spew

28th October 2022

By: Sheila Barradas

Creamer Media Research Coordinator & Senior Deputy Editor

     

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Name of the Project
Kola potash project.

Location
Sintoukola basin, Congo-Brazzaville.

Project Owner/s
Potash development company Kore Potash has a 97%-ownership of the Kola and Dougou (DX) potash projects in the Sintoukola Basin.

Project Description
Kore Potash completed a definitive feasibility study (DFS) in 2019, in which it proposed the production of about 2.2-million tonnes a year of muriate of potash (MoP). This is based on a mine life of 33 years comprising 23 production years exploiting ore reserves of 152.4-million tonnes and 9.7-million tonnes of inferred mineral resources, and an additional ten production years exploiting 70-million tonnes of the remaining inferred mineral resources.

Total MoP production has decreased from 2.2-million tonnes a year in the 2019 DFS to 2.14-million tonnes a year in the 2022 optimisation study.

The optimisation study estimates a 31-year mine life, which includes 25 production years exploiting ore reserves of 152.4-million tonnes, together with 9.7-million tonnes of inferred mineral resources, and an additional six production years exploiting 49-million tons of the remaining inferred mineral resources.

The Kola orebody is planned to be mined using conventional underground mechanised methods, extracting the ore within ‘panels’ using continuous miner equipment of the drum-cutting type. Mine access will be provided through two 270-m-deep vertical shafts, each 8 m in diameter. The shafts will be sunk near the centre of the orebody.

Underground access will be provided through equipping the intake shaft with a hoist and cage system to transport 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.

Ore from underground will be transported to the process plant by a 24-km-long overland conveyor. A conventional potash flotation plant with a maximum design capacity of 2.24-million tons a year of MoP has been designed for the project. As a result of the low insolubles content, no separate process circuit will be required to extract insoluble material. The final MoP product will then be transported 11 km by conveyor belt from the process plant to the marine export facility at the coast.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The optimisation study estimates an ungeared after-tax net present value (NPV), at a 10% discount rate, of $1.62-billion and an internal rate of return (IRR) of 20%, compared with an NPV, at a 10% discount rate, of $1.42-billion and an IRR of 17.2% in the DFS.

Capital Expenditure
The capital cost of the project has decreased by $520-million to $1.83-billion on an engineering, procurement and construction (EPC) basis, compared with the capital cost of $2.35-billion on an equivalent EPC basis in the DFS.

Planned Start/End Date
The construction period has been reduced from 46 months in the DFS to 40 months in the optimisation study.

Latest Developments
Kore Potash’s local subsidiary company has received a letter, dated October 12, from the Minister of Mines of Congo-Brazzaville, expressing his discontent with aspects of the administration of the company’s subsidiary companies in the country and the apparent lack of progress that Kore Potash and the Summit Consortium are making towards financing the Kola project.

The letter was received following the arrest and subsequent release without charge of two senior employees of the company by the local police. Neither the employees nor the company have been informed of the reason for the arrests, Kore has said.

The letter generally reserves government’s right to take measures in accordance with its existing agreements and the Mining Code of the Congo, failing a response from the company within 30 days.

Kore has said that it most recently updated the Minister on October 10 on the positive progress being made in the development of Kola and receipt of the engineering, procurement and construction (EPC) proposal for the construction of Kola. 

It has further noted that the company continues to work through the process for financing Kola as agreed with the Minister on April 6, 2021, and detailed in the memorandum of understanding with the Summit Consortium signed in the Minister’s office in Brazzaville.

Kore has said that, while the impact of Covid-19 controls in China have caused a delay in the timing of the finalisation of the EPC proposal, the Summit Consortium continues to work through the agreed process steps towards presenting the company with the financing proposal for the full construction cost of Kola.

Kore has advised that it is continuing to progress the development of the Kola and DX projects towards production. The company believes that it complies with its obligations to government under the Mining Code and Mining Convention and will continue to keep the Minister briefed on the company’s plans and progress.

The company intends to formally respond to the Minister’s letter within the 30-day period afforded by the Minister.

Key Contracts, Suppliers and Consultants
Met-Chem DRA Global (mineral resource estimate); and SRK Consulting (environmental- and social-impact assessment).

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

Edited by Creamer Media Reporter

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