JSE, ASX and Aim-listed potash development company Kore has reported that, after several delays caused by multiple Covid-19 lockdowns in China, SEPCO Electric Power Construction Corporation – a subsidiary of Power Construction Corporation of China – has delivered the engineering, procurement and construction (EPC) proposal for the construction of the Kola potash project in the Sintoukola basin, in Congo-Brazzaville.
Kore has 97% ownership of the Kola project and signed a memorandum of understanding with the Summit Consortium in April 2021 for the optimisation of the project, the provision of an EPC contract proposal and to provide a debt and royalty financing proposal for the full construction cost of the project.
The receipt of the optimisation study on Kola was announced on April 1 and detailed results announced on June 27, following completion of Kore's review of the study reports.
On June 28, Kore said that it had signed a heads of agreement (HoA) for the construction of the Kola project, with SEPCO as the engineering partner of the consortium, and that it expected to receive an EPC contract proposal from SEPCO in August.
The EPC contract proposal that has now been delivered reflects the capital cost and construction timeline reported in the optimisation study and the terms agreed to in the HoA.
The EPC proposal includes an EPC agreement, which details the contractual terms in a format congruent with the International Federation of Consulting Engineers 2017 silver book conditions of contract.
Kore has reported that there are several proposed contractual terms that the company believes now require further discussion before acceptance.
These discussions have begun and Kore and SEPCO stating that they are making every effort to expedite the process.
Kore cautioned that further SEPCO and Power China board approvals might be required prior to the finalisation of contractual terms.