Name of the Project
Danakil potash project.

Location
Ethiopia.

Client
Circum Minerals.

Project Description
An optimised definitive feasibility study (DFS) has improved several of the project’s parameters from the 2015 DFS and has confirmed the project as a world-class project in terms of size; potentially becoming the world’s lowest-cost potash producer, as well as a major supplier to the Asia Pacific markets.

The project has total resources of 4.9-billion tonnes grading at 18.1% potassium chloride (KCI) and total reserves of 107.8-million tonnes of KCI equivalent.

Reserves support a 26-year mine life for Phase I, including a three-year ramp-up period. Expected production is estimated at two-million tonnes a year of muriate of potash and 750 000 t of sulphate of potash for Phase I.

Net Present Value/Internal Rate of Return
The project has an estimated net present value, at a 10% discount rate, of $2.8-billion, compared with $2.5-billion in the DFS; and an internal rate of return of 29%, compared with 26% in the DFS.

Value
Development funding for Phase 1 is estimated at $2.3-billion, including contingency, down from $2.6-billion in the DFS.

Duration
Not stated.

Latest Developments
Circum Minerals has secured a mining licence for its Danakil potash project.

The licence, approved by the Council of Ministers of the Federal Democratic Republic of Ethiopia, gives Circum exclusive access over the 4.9-billion-tonne Canadian National Instrument 43-101-compliant potassium resource contained within the 365 km2 licence area, for an initial 20 years. It is renewable indefinitely for further ten-year periods, should the project continue to be financially viable.

The licence enabless the company to exploit potassium-bearing minerals that exist at relatively shallow depths within the vast licence area. The minerals will be exploited by solution mining, the lowest-risk mining method suitable to this region, and will be processed by crystallisation in solar ponds before final refining in a process plant. 

Key Contracts and Suppliers
Morgan Stanley & Co International (financial adviser).

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Circum Minerals, tel +1 441 295 1820, fax +1 441 295 5491 or email info@circumminerals.com.