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 Danakali (previously 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 mine life of Colluli currently exceeds 200 years, facilitated by the 1.1-billion-tonne ore reserve.

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

These salts are suitable for high-yield, low-energy input and the production of potassium sulphate (SOP) – a high-quality potash fertiliser with 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.

The operation will use openpit mining methods to take advantage of Colluli’s shallow mineralisation, which starts at 16 m.

The depth of mineralisation makes it the shallowest known evaporite project in the world.

The project will include ore-processing facilities and evaporation ponds at the mine site, an upgraded 50 km product haulage road connecting the mine site to the main road to the Port of Massawa, a 85 km desalinated water pipeline from the coast to the mine site, and an accommodation camp and administration facility.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value, at a 10% real discount rate, of $860-million and an internal rate of return of 29%, with the payback period for Phase I estimated at 3.5 years.

Value
Phase I of the project is estimated at $298-million.

The capital cost for Phase II is estimated at $175-million.

Duration
Phase I commissioning is currently targeted for the fourth quarter of 2018.

Phase II will start production in Year 6.

Latest Developments
Eritrea's Ministry of Land, Water and Environment has approved Danakali’s social- and environmental-impact assessment (SEIA) for its Colluli potash project.

The approval of the SEIA represents a critical milestone in the advancement of the Colluli project. The SEIA paves the way for the approval and issue of the mining licence and final project development approvals.

The company is continuing to progress its mining agreement and mining licence and is positive that it can conclude these steps in due course.

The mining agreement and licence are the final approvals outstanding.

Key Contracts and Suppliers
Lycopodium (PFS).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Danakali, tel +61 8 6315 1444, fax +61 8 9486 7093 or email info@danakali.com.