With the front-end engineering and design (FEED) works for its Western Australia-based Beyondie sulphate of potash (SoP) project now complete, ASX-listed Kalium Lakes is progressing towards completion of financing tasks with the aim of making a financial investment decision in the second quarter, before mid-year.

The FEED optimisation works have built on the previous work completed in the bankable feasibility study (BFS), which was released in September last year.

Pre-production capital costs of about A$216-million are included in the FEED works, while material contracts have advanced and capital cost estimates meet AACE Class 2 guidelines. Independent technical reviews have been completed, which confirms both the BFS and FEED outcomes, Kalium said on Monday.

Reduced capital costs were to be achieved through less brine extraction infrastructure and a condensed pond size, the company said. However, capital costs would increase as a result of the net additional Northern Australia Infrastructure Facility- (NAIF-) funded infrastructure (A$39-million), on the slightly-augmented back end of the process plant to boost production rate and a larger 15.6% contingency (now A$29-million, previously A$15-million) to enhance certainty of delivering to budget.

The significant reduction in operating costs meant that Kalium Lakes was likely to become one of the lowest cost producers in the world, MD Brett Hazelden commented, adding that ensuring profitable operation, throughout the normal commodity pricing cycles, continued to be a key focus for the company.

“The opportunity to install and own the power station and gas pipeline infrastructure not only provides for significantly lower operating costs, but also provides essential infrastructure for SOP production expansion and future magnesium by-product delivery,” Hazelden said.

Other FEED works, and outcomes include recovery improvement, an increased production rate, an initial mine life of up to 50 years, a reduction in pond size, less brine extraction, SoP product quality, NAIF infrastructure funding, as well as a decreased life-of-mine operating costs.

No changes have been made to the ore reserves or mineral resources and improved financial outcomes and low-cost financing have been identified.