Australia’s Danakali moves closer to developing potash project in Eritrea

LONDON (ICIS)–Australian fertilizer firm Danakali on Wednesday announced the completion of the second phase of the engineering, procurement, construction management (EPCM) stage of its sulphate of potash (SOP) project in Eritrea.

The company, which in late July was granted final approval from the Eritrean Ministry of Energy & Mines for the Colluli Potash Project, now has “greater certainty of scope definition” following the third-party review by DRA Global of the process plant and associated infrastructure work.

“We are pleased to advise that EPCM Phase 1 and 2, which relate to the process plant and associated infrastructure work have been completed … [and] a number of optimisation opportunities were identified,” Danakali disclosed.

They include the use of a Beach Wells intake method is preferred in lieu of a subsea intake pipeline, so reducing risk to the subsea and coastal habitats by avoiding onshore pipeline construction and offshore installation.

The design eliminates chlorine dosing and improves the quality of the discharge water as the pre-treatment feedwater requires less chemicals, the Perth-headquartered company added.

Niels Wage, CEO of Danakali, commented: “The detail review process again validates the robustness of the project and previous technical studies.

“It is also pleasing to see that a number of optimisation opportunities in the process are established that will further de-risk the project.”

Danakali has 36 months from the submission of the approved notice to complete the project.

In June 2018, Danakali signed a take-or-pay offtake agreement with Switzerland-based fertilizer major EuroChem.

The latter will take, pay, market, and distribute up to 100% of the Colluli site’s SOP fertilizer production over a 10-year term, from the project’s date of commissioning.

If first production has not been achieved by 1 July 2022, EuroChem may terminate the agreement.

Colluli, which Danakali is developing alongside joint venture partner Eritrean National Mining Corp, has an expected mine life of 200 years.

Danakali plans to develop an export-oriented potash facility in East Africa. Photo courtesy of Danakali.