Eritrea – ASX-listed potash company Danakali has made “excellent” progress on the definitive feasibility study (DFS) for its Colluli potash project (Colluli) in 2015 which is on schedule for completion in Q4, 2015.

The project is 100% owned by the Colluli Mining Share Company (CMSC), a 50:50 joint venture between Danakali and the Eritrean National Mining Company (ENAMCO).

This progress follows the release of highly favourable pre-feasibility study (PFS) results earlier in the year.

Throughout the PFS stage a number of optimisation opportunities were identified by the project study teams, and have been integrated into the DFS work programme. It is expected that the economics of the project will be materially enhanced relative to the PFS, through simplification of infrastructure and logistics.

Key optimisation areas identified at the PFS stage and subsequently worked on in the DFS:

  1. Substantial reductions in process water requirements;
  2. Identification of subsurface water at the Colluli site which negates the need for 75 km
  3. Seawater delivery pipeline from Anfile Bay for the project start-up phase;
  4. Revised process recovery pond layouts and construction schedule;
  5. Completion of metallurgical and size optimisation testwork;
  6. Simplification of product export logistics; and
  7. Optimisation of pit designs following completion of geotechnical work.

 

  1. Substantial reductions in process water requirements

Danakali previously announced a 60% reduction in processing water requirements following processing optimisation test work.

In addition to reducing the water supply infrastructure requirements and water delivery costs to site, the water reduction has positively impacted the size of the processing plant mixing tanks, pumps, and piping, thereby reducing the overall process plant footprint size.

The reduction in water consumption has also significantly reduced the size of the recovery ponds (the recovery ponds capture potassium rich brines exiting the processing plant to improve the overall process yield).

 

  1. Identification of subsurface water at Colluli

Finalisation of hydrogeological work supporting the DFS has confirmed that there is sufficient subsurface water to satisfy the processing plant requirements for at least the first five years of production.

This negates the need to install a 75 km seawater pipeline delivery system for the project start-up phase. A second production module is currently planned for commissioning five years after the first, allowing the installation of a single water pipeline to supply both modules.

Further definition on what has been identified as a potentially large sub-surface aquifer may completely eliminate the need for the installation of any water delivery system from the coast to the Colluli mine-site. This definition work has been deferred to post release of the DFS.

 

  1. Revised process pond layout and construction schedule

The optimisation of site layouts has allowed refinement to a more efficient recovery and tailings pond layout. This change should allow a staged construction and development schedule, which minimises development capital and progressively installs the recovery ponds as the plant recirculation load grows over time.

Relocation of the tailings ponds closer to the processing plant is expected to reduce processing plant operating costs.

 

  1. Completion of metallurgical and size optimisation testwork

The finalisation of the internal plant design, following an extensive and comprehensive metallurgical test programme, has allowed the development of an optimised process design. It is planned to have a number of simpler, less energy intensive size separation units for solid-liquid separation processes.

 

  1. Simplification of product logistics

The product export terminal (PET) has been removed from the site infrastructure following a full review of product logistics and extensive discussions with ENAMCO.

Final product will be containerised at site and trucked to the port of Massawa, which is located approximately 180 km from the Colluli site.

The Port of Massawa has the capability to export both containerised and bulk materials and is Eritrea’s key import and export facility. The use of Massawa eliminates the need to construct an 85 km road to Anfile Bay.

A 50 km road will be constructed to link the site with the coastal road leading to Massawa. Product exporting options and infrastructure for Anfile Bay will be reviewed after project commissioning.

 

“We are confident that the optimisation work completed over the past eight months will materially enhance the project, and are looking forward to bringing the DFS to its conclusion, initiating the mining approvals process and working with ENAMCO to secure the funding requirement for project construction,” says MD Paul Donaldson.

“The Colluli resource is world class in every way. The 1.3 Bt potassium bearing resource is shallow, in close proximity to coast and to the key markets of the future, and comprises a variety of potassium bearing salts suitable for the production of potassium sulphate (SOP), potassium magnesium sulphate (SOP-M) and potassium chloride (MOP).”

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