AMN - ERITREA: Danakali signs offtake MOUs with 8 companies

Danakali has signed non-binding memorandums of understanding with eight multinational parties in Northern Africa, Europe, Middle East and North America for the offtake of sulphate of potash (SOP) from the Colluli potash project.

Danakili owns 50% of the Colluli project and is 100% owned by the Colluli Mining Share Co (CMSC).

High quality representative samples produced from the Colluli resource were provided for quality control assessment by prospective customers.

The combined offtake volumes in the MOUs exceed 800,000 tonnes/year in both standard and granular form, which compares to Colluli’s design production capacity of 425,000 tonnes/year (Module I only). Engagement with potential Asian customers has yet to start, and represents strong potential for additional product volume interest.

The Colluli Definitive Feasbility Study has been submitted to the Eritrean Ministry of Energy and Mines.

Definitive Feasbility Study due diligence will be conducted as a pre-requisite to the award of a mining licence. Social and environmental impact assessments and associated management plans have been completed to the Equator Principles (a risk management framework, adopted by financial institutions, for determining, assessing and managing environmental and social risk in projects). Danakali and CMSC have completed post Definitive Feasbility Study stakeholder engagements.

Over the past 12 months Danakali and CMSC have made significant progress at Colluli. The project team released a highly favourable definitive feasibility study in November. Danakali says “the DFS highlights that Colluli is the premier premium potash and multi-agri commodity investment opportunity globally.”

The favourable suite of potassium bearing salts, shallow mineralisation, proximity to coast and simple, proven processing technology combine to give Colluli an industry-leading capital intensity, bottom quartile operating costs, low incremental growth capital and unrivalled product diversification potential. These outcomes are underpinned by a massive 1100 million tonne ore reserve which delivers an estimated mine life of over 200 years at the Definitive Feasbility Study production volumes.

The Danakil basin potentially contains the largest unexploited potash geological setting in the world. The positively unique attributes of the Colluli resource however, give it a distinct advantage over other developments. Eritrea is at the epicentre of booming population growth and ideally located to supply the key fertiliser markets of the future.

www.danakali.com.au

News courtesy of International Mining