Australia Kore Potash signs agreement for Kola Potash project construction

HOUSTON (ICIS)–Australian producer Kore Potash announced it has signed a heads of agreement for the construction of the Kola Potash project located in Republic of Congo-Brazzaville with SEPCO Electric Power Construction Corporation (SEPCO).

Kola is set to be designed with capability to produce 2.2m tonnes/year of granular muriate of potash (MOP) over an initial 31-year life with it expected the construction period will be over 40 months with a capital cost to construct Kola estimated at $1.83bn.

The agreement provides SEPCO with an opportunity to adjust the costs related to the underground mine portion of the works.

Should the final agreed quantities of materials and labour or the underground construction period differ materially from the baseline, SEPCO will be able to adjust proportionately.

The underground portion of the works is currently estimated at $164m.

The company said SEPCO will continue negotiations with Kore with a view to finalising all the engineering, procurement and construction (EPC) terms and presenting the completed construction proposal to Kore in August.

“The Heads of Agreement with SEPCO reconfirms their commitment to advance from the completed Kola optimisation phase, to construction contract formation and then into construction of Kola. We look forward now to receiving the EPC contract proposal,” said Brad Sampson, Kore Potash CEO.

In an update on financing the company said it continues to work on those efforts with the Summit Consortium which in April 2021 agreed to provide a royalty and debt financing proposal for the complete construction cost of Kola.

The Consortium have advised that they will provide the financing proposal to Kore after the receipt of the EPC proposal and Kore’s agreement with SEPCO on the key terms.