JSE-listed Kore Potash expects the engineering, procurement and construction (EPC) contract proposal for the construction of its 97%-owned Kola potash project in Congo-Brazzaville to be ready by August.
The EPC contract proposal will be based on the outcomes of the optimisation study reported on April 1 and follows on the heels of the heads of agreement (HoA) that was signed on June 28 for the project’s construction.
The optimisation study resulted in a capital cost reduction of $520-million to $1.83-billion on an EPC basis, compared with the definitive feasibility study (DFS) capital cost of $2.35-billion on an equivalent EPC basis.
Moreover, the construction period was reduced to 40 months, down from the DFS construction period of 46 months.
Kola was designed with a nameplate production capacity of 2.2-million tonnes a year of muriate of potash (MoP), scheduled over an initial 31-year project life.
Kola was designed as a conventional mechanised underground potash mine with shallow shaft access. Ore from underground will be transported to the process plant by a 25-km-long overland conveyor.
After processing, the MoP product will be transported by an 11 km conveyor to the marine export facility.
MoP will be conveyed from the storage area onto barges by the dedicated barge loading jetty and then transshipped into ocean-going vessels for export.
The financing proposal for the complete construction of Kola is expected following Kore’s receipt of the EPC contract proposal and agreement on key EPC terms, the company announced on July 18.
“The progress towards financing our Kola project is exciting and we look forward to receiving the financing proposal later this year,” Kore CEO Brad Sampson said.
The process to potentially finance the construction of Kola has progressed in line with the memorandum of understanding signed with alternative investment group Summit Africa in April last year.
“Recent global events have heightened concerns for food security and continuity of supply of fertiliser to feed the world’s growing population. The dramatic increase in the potash price reinforces the need for the development of new low-cost potash production from high-quality potash deposits located close to customers, such as our projects in the Sintoukola basin,” Sampson said.
Meanwhile, the HoA that was signed in June confirmed the timeline for construction engineering company Sepco Electric Power Construction to complete its discussions with Kore ahead of presenting the company with an EPC contract proposal for Kola.
The HoA also provided additional clarity on matters that Sepco was required to finalise in advance of presenting Kore with the construction contract proposal.