PERTH (miningweekly.com) – Feasibility study work into a production increase at ASX-listed Kalium Lake’s Beyondie sulphate of potash (SoP) project, in Western Australia, has confirmed that the project could support the production of 120 000 t/y as a new base case.
Kalium Lakes in May confirmed through a debottlenecking review that its purification plant could produce at a steady state of some 100 000 t/y of SoP, up from the initial production target of 90 000 t/y.
The new feasibility study is based on expanding existing infrastructure where required, combined with a process plant debottlenecking and optimisation work. Kalium Lakes told shareholders that expansion areas to target the increase in SoP production to 120 000 t/y were relatively small compared to the footprint of the project for the existing 90 000 t/y nameplate production capacity. In addition, expansion of the Ten Mile West area is not required for at least the first two years at the 120 000 t/y SoP production rate.
The feasibility study found that an incremental capital expenditure of only A$45-million would be required to increase the production capacity, the expanded project would support an unlevered pre-tax net present value of A$484-million, and operating costs over the 50-year mine life are expected to be some A$375/t free-on-board.
“We are firmly committed to being a key, long-term supplier to the Australian agricultural sector, enabling our farmers to provide nutrition for the world. SoP is likely to play an increasing role in a greener world, with fertilizer usage increasing yields and hopefully leading to reduced global deforestation,” said Kalium Lakes CEO Rudolph van Niekerk.
“As we approach our inaugural production target of September/October 2021, we are acutely aware of the recent surge in fertiliser prices globally, paralleling price highs not seen for the past decade. At the same time, we have seen the inflationary headwinds increase due to Covid-19, driving forecast operating cost increases across the Australian mining industry. The rationale for the 120 000 t/y SoP expansion is to accelerate low capital intensity increase in SoP production into a rising SoP price market, whilst delivering economies of scale which offset various other negative macroeconomic factors and operating cost pressures, including the Covid-19 impacts.
“As a result, the proposed expansion will put Kalium Lakes on a stronger platform as well as maximising the benefit from the recent higher SoP prices that we have seen recently,” said Van Niekerk.
With first SoP production from the current project imminent, Kalium Lakes is accelerating expansion plans to ramp up production to 120 000 t/y by the fourth quarter of 2022, subject to the approval of its senior lenders and securing funding for the expansion which the company is in the process of finalising.