Bulk Metals: Danakali takes another step towards potash production

Danakali (ASX:DNK) is progressing the development of its Colluli sulphate of potash (SOP) project in Eritrea with the first phase of its engineering, procurement, construction and management (EPCM) work completed on time and budget.

This takes Colluli closer to the construction phase and then into production in 2022.

Colluli has a measured, indicated and inferred resource of 1.3 billion tonnes grading 11 per cent potassium oxide (K2O) and 7 per cent kieserite.

SOP is a premium fertiliser that is normally used on high-value specialty crops while kieserite is an effective source of magnesium and sulphur for all crops.

The first module will produce 472,000 tonnes per annum (tpa) of premium SOP from 2022. This will double when the second module comes on line.

Colluli is expected to deliver cash flow of $US85m ($130m) per annum at full production.

Work is also underway on the water desalination plant design and key mining services contracts.

READ: Here’s why potash stocks won’t stink in 2020

Meanwhile, sales of heavy mineral concentrate (HMC) from Image Resources’ (ASX:IMA) Boonanarring mineral sands project in Western Australia are back on-track to its Chinese offtake partners after a brief blip.

The company says that while a shipment of HMC was delayed from February to March, its partners’ processing factories are now returning to full production following the extension of the Chinese New Year break.

Additionally, the company has successfully increased the size of both March HMC shipments from 20,000t to 25,000t.

It anticipates maintaining larger shipment sizes, or more frequent shipments, to accommodate its higher HMC production forecast for 2020 compared to 2019.