Danakali Ltd has submitted a formal application for a mining license for the Colluli Potash project located in the Danakil region of Eritrea, East Africa. The project is 100-percent owned by the Colluli Mining Share Company (CMSC), which is a 50:50 Joint Venture between Danakali Limited and the Eritrean National Mining Company (ENAMCO). The application was submitted after the company had completed the necessary preparations, which included the submission of the Social and Environmental Impact Assessment (SEIA) and the completion of the definitive feasibility study (DFS).
Paul Donaldson, Danakali’s Managing Director, commented that the company was very pleased to “have met this critical milestone in the process towards project development.” Danakali believes that Colluli is set to become one of the world’s most significant and lowest-cost potassium sulphate production centers. Mr Donaldson said that “the Colluli study work demonstrates a world class project that has no peer.” He said that the success of the project is guaranteed by the “the shallow mineralization, highly favorable suite of salts and proximity to coast make the resource and project positively unique.” He also added that Danakali was “looking forward to an exciting year ahead as we progress project funding, off-take agreements and mining approvals in order to commence construction and fully transform the company from developer to operator.”
Colluli Potash Project in Eritrea has demonstrated the lowest capital intensity of all comparable sulphate of potash (SOP) projects. The project is expected to be in the bottom quartile cost curve meaning that it will yield sustainable industry-leading returns throughout the commodity cycle. Danakali has already signed non-binding memorandums of understanding (MOUs) with 8 multinational parties for the off-take of SOP from its Eritrean location. Talks with project funding and off-take partners will be the focus of the agenda for the second quarter of this year.