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 has reported that discussions are continuing towards finalising terms for the EPC contract at Kola.

On June 28, 2022, Kore announced the signing of a heads of agreement (HoA) with Sepco for the construction of Kola.

Under the HoA, Sepco undertook to continue negotiations with Kore towards an EPC contract for the construction of Kola.

Discussions with Sepco to finalise key EPC terms progressed throughout the remainder of 2022, despite some delays resulting from actions taken in China to control the Covid-19 pandemic.

Recognising the length of the proposed construction period and the total financing requirement, Kore has requested that Sepco’s parent company, PowerChina, provide the typically required EPC contract guarantees, including performance and retention bonds supporting the completion of construction and the operating performance of Kola.

PowerChina is now actively involved in the process to finalise the EPC contract terms. As part of this process, PowerChina is reviewing aspects of the Kola design and the planned construction schedule and has had direct communications with the management of Kore.

PowerChina’s review has generated several potential design improvements to the project that identify opportunities to further reduce the capital cost and the construction schedule. Discussions on incorporating these design improvements into the EPC contract continue.

PowerChina has engaged several external experts to support its review of the Kola design and they require completion of this review to support the provision of the required EPC contract guarantees. PowerChina has not yet advised Kore of the timeline to complete its reviews and internal approvals.

The process to conclude EPC contract discussions has taken longer than the Summit consortium - which has agreed to provide financing for the Kola project - initially envisaged, notwithstanding it being necessary to conclude these discussions prior to receiving its financing proposal, Kore informs.

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.