JOHANNESBURG (miningweekly.com) – Brazilian fertiliser development company Verde Potash now plans to undertake the development of its Cerrado Verde potash project, in Minas Gerais, Brazil, in a phased approach.

The company on Wednesday revealed details of its new strategic direction for the project, saying it has moved away from its previous plan to start directly on the implementation of a capital-intensive, large-scale production facility.

“Verde’s new plan is premised on the technical practicality of the project’s staged scale-up in order to reduce risk and to accelerate cash flow generation from its large potash resource in Brazil,” the company said in a statement.

The project would now be developed in two phases, with the first to comprise the construction of a 1 000 t/d Flex Plant for the production of ThermoPotash – a nonchloride, multinutrient fertiliser suitable for Brazilian soil.

Verde explained that ThermoPotash was a new product that could compete with other fertilisers, such as potassium sulphate and potassium nitrate, in the Brazilian market.

Further, the Flex Plant would also be used to run the pyro stage of a larger potassium chloride (KCI) production phase. The successful operation of the pyro stage of the KCl production process would enable the company to obtain the desired performance guarantees for Phase 2 of the new strategy, which would see the development of a 12 000 t/d kiln for KCI production.

The two-phased strategy was aimed at reducing the upfront capital expenditure on the project by initially establishing the less capital-intensive ThermoPotash product. Sales of ThermoPotash would also generate cash for the company while the second phase was implemented.

Verde Potash – which expects to complete prefeasibility studies (PFS’s) for both phases in the first quarter of 2014 – and its engineering partners have started on the design work for Phase 1.

Verde Potash indicated that it remained confident that it had sufficient cash on hand to complete its PFS and definitive feasibility studies for the project. The company has also been in discussions with Brazilian institutions regarding possible debt financing for Phase 1.