Danakali Ltd:
The continued advancemen the Colluli Potash Project
CEO and Managing Director Paul Donaldson discusses c progress and future plans.
Written by: Eric Harding Produced by: Vince Kielty Interviewed by: Paul Donald
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D A N A K A L I LT D
High purity potassium sulphate sample generated from Colluli pilot tests
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ormerly South Boulder Mines, which was established in 2003, Danakali Limited is an ASXlisted resources company engaged in developing the world-class Colluli Potash Project in the Danakil region of East Africa. Containing over one billion tons of potassium-bearing salts, the 200-square kilometre resource is one of the largest and most accessible potash deposits in the world. The project The Colluli Potash Project is whollyowned by the Colluli Mining Share Company, which is a 50/50 joint 4
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venture between South Boulder Mines and the Eritrean National Mining Company. Since drilling commenced in 2010, South Boulder Mines has made significant strides in progressing the Colluli Potash Project, completing an economically robust prefeasibility study for the production of sulphate of potash (SOP) in February 2015. A definitive feasibility study is now underway and expected to be completed in September 2015. “By working through a series of studies, and fully assessing the composition of the Colluli resource, we’ve been able to identify the best
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Environmental Baseline Studies for the Colluli Project are well advanced
development path” said Donaldson. “As the studies reach their conclusion, we will work with our Joint Venture partners and focus on securing the funding and human resource to successfully transition from explorer to operator,” said Donaldson.
substitutable agricultural commodity which provides potassium crop health fits into this category. Colluli is a large resource, in close proximity to the coast, is highly accessible, is geographically favourable relative to key growth markets, and is capable of making The advantages a premium potash type with The world’s population is growing exceptional quality. Prefeasibility at approximately 80 million people studies indicate the lowest capital per annum. To feed an additional 2.3 intensity and operating costs billion people by 2050, agricultural relative to all advanced SOP yields are required to increase by projects globally. almost 70%. Fertiliser consumption Colluli is geographically advanced; must grow to meet this objective, located on the doorstep of the key and potash, an essential, nongrowth economies of the future. w w w. d a n a k a l i . c o m
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Drilling Operations at the Colluli resource
D A N A K A L I LT D Potassium sulphate (SOP) is a geologically scarce resource with strong demand growth drivers, and a favourable agriculture commodity of the future. Capital Intensity and Operating Costs Low capital intensity and operating costs are achieved as a result of the extraction of the potassium salts in solid form. All primary producers of SOP commence with potassium rich brine which requires large amounts of evaporation, and a large area of evaporation ponds to generate a harvest salt for further processing. Colluli has the unique advantage of starting with salts in solid form, which minimises both footprint size and capital investment. The favourable combination of salts also gives a high potassium yield which lowers the overall operating costs.
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also has huge upside potential with appreciable volumes of rocksalt, magnesium chloride and gypsum also present in the resource. “The potassium salt diversity of the Colluli resource cannot be matched by any other potash basin in the world ,” Donaldson added. “We have a massive resource, the ability to diversify potash type, are close to the coast and key markets, and exposure to huge upside potential with a suite of non-potassium salts that have well established markets .” “There are only three major primary producers in the world making potassium sulphate. The market dynamics are highly favorable for us.”
Location Being close to the coast makes the Colluli resource one of the most accessible potash deposits in the world. “Logistically, Colluli is simple relative to many planned greenfield Diversity and marketability developments, and the East Africa The diversity if potassium bearing location is highly advantageous salts within the resource allows Colluli relative to key potential markets in to produce a range of potash fertiliser the Middle East, India, East Asia and types including potassium sulphate, Africa” said Donaldson. potassium magnesium sulphate and potassium chloride. In addition, it w w w. d a n a k a l i . c o m
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D A N A K A L I LT D
Samples for shipping to the Saskatchewan Research Council
Attention to Environment and CSR Assessing and mitigating the social and environmental impact, and being responsible corporate citizens arekey to developing sustainable operations. As Donaldson explained, “The Joint Venture team is very focussed on ensuring the project has a positive impact on local communities and respect for the environment. Eritrea places a high level of focus and importance on the environment, and we are working through a comprehensive social and environmental impact assessment as part of our definitive feasibility study 8
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and this will form the foundation of our social and environmental management plans. .” One of the biggest aspects for the Colluli Potash Project going forward will be recruiting and incorporating local residents. “The way we interact with the community is by informing them of the project itself and what it means in terms of equipment, people and changes in the local area. We also have an exploration camp set up in the area and the local people actually run the facility for us— cooking, cleaning and assisting in miscellaneous tasks,” Donaldson explained.
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“In the future, as the project develops, we see those local communities as the priority recruiting area to upskill for jobs in the operation. “There are mining operations ongoing in the area now so the skillset is building up in the country that we can draw from. Caterpillar is also set up in the country to do mobile production technician training so there are skills and trades within the country. We’ll prioritize jobs with the local community but for the professional roles we’ll have to go further abroad like South Africa and Europe for seasoned mining professionals.”
Company Information INDUSTRY
Mining HEADQUARTERS
West Perth, Western Australia, Australia FOUNDED
2003
Safety Taking safety into account is a priority for Danakali. “Our safety approach is based on risk assessment and accurate planning procedures [that are considered] prior to task execution,” said Donaldson. “Fundamentally, everything we do has a risk-based approach. We go through an annual risk register process, which looks at corporate, safety, project and operational risks. We prioritize those to ensure we have mitigation plans in place as needed.” The Colluli Potash Project is by far one of the mining industry’s most comprehensive and exciting projects in the world. “This is one of the best undeveloped potash and agrichemical resources in the world today, favorably positioned to supply the world’s fastest growing markets,” Donaldson concluded.
EMPLOYEES
10 PRODUCTS/ SERVICES Danakali (ASX:DNK) is an ASX listed company and 50 per cent owner of the Colluli Potash Project in Eritrea, East Africa. The company is currently developing the Colluli Project in partnership with the Eritrean National Mining Company (ENAMCO). The project is located in the Danakil Depression region of Eritrea, and is ~75km from the Red Sea coast, making it one of the most accessible potash deposits globally. Mineralisation within the Colluli resource commences at just 16m, making it the world’s shallowest known potash deposit. The resource is amenable to open pit mining, which allows higher overall resource recovery to be achieved, as it’s generally safer than underground mining and is highly advantageous for modular growth.
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DANAKALI LTD Address 31 Ventnor Avenue West Perth Western Australia, Australia, 6000 Tel. 61 8 6315 1444 Fax. 61 8 9486 7093 info@Danakali.com www.danakali.com