Name and Location
Colluli potash project, Danakil, Eritrea.

Client
The Colluli Mining Share Company (CMSC) is a joint venture (JV) between the Eritrean National Mining Company (ENAMCO) and South Boulder Mines, with each company having an equal stake in the company. CMSC is responsible for the development of the project.

Project Description
The prefeasibility study (PFS) completed on the Colluli potash project has highlighted the economically robust nature of the project, which is expected to become one of the world’s most significant and lowest-cost potassium sulphate operations.

The Colluli resource comprises three potassium-bearing salts – sylvinite, carnallitite and kainitite.

These salts are suitable for high-yield, low-energy input, production of potassium sulphate (SOP), which is a high-quality potash fertiliser carrying a price premium over the more common potassium chloride.

The project will be completed in phases. The first phase will comprise 425 000 t/y of SOP, with the second phase adding 425 000 t/y of SOP, starting production in year five.

The PFS envisages the construction of:
• an openpit potash mine located within the Danakil depression;
• ore-processing facilities at the mine site;
• evaporation ponds at the mine site;
• a new product export terminal at Ras Hafele, in Anfile bay, on the Red Sea coast;
• a new 75 km product haulage road connecting the mine site and port facility;
• a seawater pipeline from the port site to the mine site; and
• an accommodation camp and administration facility at the mine site.

The proposed processing method is the most commonly used, low-cost process for the production of SOP by adding potassium chloride (sylvite) with kainite from the kainitite.

Kainitite represents about 50% of the Colluli resource, with the remaining salts comprising sylvinite and carnallitite, which are commonly used in the production of potassium chloride.

Net Present Value/Internal Rate of Return
Phase I of the project has an after-tax net present value (NPV), at a 10% discount rate, of $462-million and an after-tax internal rate of return of 22.3%.

Phase II has an after-tax NPV, at a 10% discount rate, of $864-million and an after-tax internal rate of return of 24.7%.

Value
Phase I of the project is estimated at $442-million and Phase II at $282-million.

Duration
Construction of the project is expected to start in 2016 and production in 2018.

Latest Developments
Following a pilot test, which forms part of a definitive feasibility study (DFS), the Colluli project has achieved ultrahigh SOP purity grades of 98%, with typical industry product being only 94%.

The tests, which were conducted in March, show that the project has exceptionally low chlorine levels at less than 0.1%.

The pilot test process has consistently delivered potassium oxide results greater than 52% and gave an overall average of 52.9%, putting the Colluli potassium at the top of the quality spectrum, the company reports.

The pilot tests have provided SOP samples that could be introduced to potential commercial partners. Samples are still being generated, with the pilot plant trials moving from 20-hour trial runs to 40-hour trial runs.

Two more repeatability tests are planned to complete the DFS metallurgical programme. However, the company has noted that given the results to date, it is unlikely that there will be any material differences in the results.

Key Contracts and Suppliers
Lycopodium (PFS).

On Budget and on Time?
Not stated.

Contact Details for Project Information
South Boulder Mines, tel +61 8 6315 1444 or email info@southbouldermines.com.au.