Danakali found a way to produce cheaper potash for 200 years, with less environmental impact
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Danakali has completed detailed test work for its Colluli potash project that has lowered both capital and operating costs while confirming production rates.
The test work achieved the costs reduction by optimising the process plant design and mass balance using filtered seawater from the Red Sea while maintaining production of high-grade sulphate of potash (SOP) at the rate of 472,000 tonnes per annum from Module 1 and 2.
Danakali (ASX:DNK) had previously noted that using seawater would reduce its environmental impact, lower its power requirements at the Red Sea water intake and treatment area and lower capex.
It added that the test results are the outcome of six months of detailed analysis conducted in collaboration with world-leading industry experts and builds on the previous front-end engineering and design studies.
The use of an optimised CMSC process design with industry standard equipment helps to reduce project, environmental, operational, finance and market risk.
It also reinforces the benefits at Colluli with its unique natural resources and in situ supplemental potassium that results in significant economic advantages.
“Colluli has been extensively studied by CMSC and the latest test work builds on and confirms earlier work,” executive chairman Seamus Cornelius said.
He also addressed concerns that the company had done “too much study” saying that every study had increased its certainty that Colluli is an asset that will dominate the potash industry and change agriculture for the better in Eritrea, Africa and beyond.
“Actually, knowing we can produce high quality SOP from Colluli ore using filtered seawater and a fully tested process because we have done it is another significant advantage for Colluli.”
Colluli has a giant resource of 1.289 billion tonnes grading 11 per cent K2O, or about 260 million tonnes of sulphate of potash (SOP), enough to support production for more than 200 years.
Prior to the optimisation test work, it was already expected to be one of the lowest cost potash producers.
SOP is considered a premium fertiliser as it not only provides both potassium and sulphur – key elements required for the healthy growth of plants – but also contains no chloride.
That makes it suitable for leafy, chloride-intolerant crops that are typically high-value, such as avocados, citrus fruits, nuts and berries.
This article was developed in collaboration with Danakali, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.