Developments at Kropz's Elandsfontein project as at April, 2021
Aim-listed emerging African phosphate developer Kropz reports that, despite disruptions brought about by the Covid-19 pandemic, significant progress is being made at its Elandsfontein project, which is on track and within the original projected capital budget, and which is due for commissioning in the fourth quarter.
Earthworks and civil construction are largely complete for the project, which is located in South Africa, while the fabrication and erection of structural steel, platework and piping are well advanced, with the first mechanical equipment having been installed.
Going forward, the electrical, control and instrumentation contractor has commenced with associated work.
Nonetheless, Kropz reports that the project schedule remains tight, with a high number of critical path and near critical path items being managed concurrently, while the factors of Covid-19 and a potential third wave of infections pose a risk to the project schedule.
Meanwhile, for the past eight months, Kropz, together with the Elandsfontein management team and State-owned Transnet have been working to finalise the port capacity agreement for the export sales and movement of Elandsfontein phosphate rock through the Port of Saldanha.
In this regard, Transnet recently informed Kropz that capacity is not available in Saldanha, although the logistics provider has committed to provide an alternative solution for a portion of the Elandsfontein production through the Port of Cape Town, Kropz reports.
However, sales through Cape Town would incur additional transportation costs owing to the greater travel distance involved, leaving the Kropz and Elandsfontein management teams to investigate all possible solutions and engaging in discussions with Transnet.
LOAN FACILITY & HINDA
Meanwhile, Kropz notes that, as a result of the strengthening of the rand to the dollar in recent months, rand-denominated drawdown receipts of its $40-million loan facility are expected to be well below the R680-million anticipated at the time of concluding the original equity facility.
The current shortfall is expected to be R80-million, subject to exchange rates for the rest of this year.
As such, Kropz’s management is investigating alternatives for the funding of this potential shortfall.
For its Hinda project in the Republic of the Congo, Kropz notes that the appointed engineering and construction firm, Hatch Africa, is on track to conclude the study by the end of September.
Kropz appointed Hatch in February to complete an updated feasibility study on the Hinda project, targeting a phased approach in line with the terms of the mining investment agreement.