Agrimin Ltd is readying to develop the world’s largest undeveloped SOP (sulphate of potash) bearing salt lake after it has successfully raised $10 million in capital. The share placement was conducted at 80 cents per share to institutions and investors. AustralianSuper will have a 14% share in the project as Australia’s largest superannuation fund. Proceeds from the placement will be applied towards the ongoing definitive feasibility study (DFS) for Agrimin’s Mackay SOP Project in Western Australia. At the same time, Agrimin is advancing talks related to binding off-take commitments and strategic partnerships.
Agrimin finalized the pre-feasibility study (PFS) for Mackay in May 2018, which demonstrated the potential for large-scale and low-cost SOP production with a net present value (NPV) of $453 million. Based on the PFS, the investors can expect SOP production of 426,000 tons annually over two decades with an EBITDA of $137 million annually at an SOP price of $555 per ton. The DFS is now being conducted with long-term field trials having commenced in August 2017 and native title agreement already signed for the planned full-scale development. Environmental studies for Mackay are also underway to back up the formal assessment process.
SOP is a specialty crop nutrient that is being increasingly used for advanced farming practices to minimize agricultural production and water usage. SOP demand in China has increased by more than a factor of three and prices have gone up by 30% in the last two years due to rising demand and production costs. Agrimin is seeking to become the largest and lowest cost supplier of seaborne SOP in response to stricter environmental controls across China that have reduced production rates. The company wants to establish a new potash export industry in Australia and make a positive impact on some of the country’s most remote Aboriginal communities.