ASX and LSE-listed Danakali is entering the final stage of the EPCM Phase 2 of project development at its Colluli sulphate of potash project in Eritrea, East Africa, with completion expected in June 2020.
All contractor and vendor tender packages have now returned allowing the evaluation stage to be completed, with additional optimisation opportunities defined as part of the EPCM Phase 2 deliverables.
Even in light of COVID-19 restrictions, all EPCM Phase 2 workflows continued and all vendor and contractor packages being received. The receipt of these bids allows DRA Global to finalise the tender evaluation process to provide a technically compliant and commercially favourable estimate.
Three key objectives set for the EPCM Phase 2 are:
– Update of the Front End Engineering Design (FEED) capital estimate;
– Revision of the FEED project schedule; and
– Identification of key test work required to ensure full preparedness for EPCM Phase 3.
Completion of the identified test work items provides key data necessary to finalise process plant design development and will allow advancement into EPCM Phase 3 with clear direction.
A number of optimisation opportunities to improve project design will be presented at the end of EPCM Phase 2.
Colluli at a glance
The Colluli sulphate of potash project is 100% owned by the Colluli Mining Share Company (CMSC), a 50:50 joint venture between Danakali and the Eritrean National Mining Corporation (ENAMCO).
The company has completed a FEED for the production of potassium sulphate, otherwise known as sulphate of potash or SOP. SOP is a chloride free, specialty fertiliser that carries a substantial price premium relative to the more common potash type; potassium chloride (or MOP). Economic resources for production of SOP are geologically scarce. The unique composition of the Colluli resource favours low energy input, high potassium yield conversion to SOP using commercially proven technology.
One of the key advantages of the resource is that the salts are present in solid form (in contrast with production of SOP from brines) which reduces infrastructure costs and substantially reduces the time required to achieve full production capacity.