Modern Mining December 2017

MINING News

Danakali advances Colluli bidding process

ASX-listed Danakali and its Joint Venture partner, the Eritrean National Mining Corporation (ENAMCO), have announced that following a comprehensive bidding process for the Colluli potash project min- ing contract, the technical and commercial compliance process is complete. Conforming bids have been processed through the Front End Engineering Design (FEED) mine plan, and evaluation of the technical and commercial compli- ance, in combination with an assessment of the overall value proposition, has resulted in a shortlist of two competitive bids. The technical and commercial com- pliance was evaluated and confirmed by AMC Consultants. Bid results will be included in the FEED economics. Final commercial negotiations advancing to the preferred service pro- vider will commence shortly. Bidders participating in the process visited Eritrea, the Port of Massawa and the future Colluli mine site. The bidders also conducted a comprehensive review of the Colluli mine plan and selected mining method. The FEED phase is well advanced and drawing to a conclusion. Final reviews of direct and indirect development capi- tal costs are underway and a revised ore reserve will be completed in December/ January in accordance with the require- ments of JORC-2012. “We are very happy to have progressed our bidding process and commercial and

The proposed Colluli processing plant.

technical evaluation of the mining bids,” says Danakali’s MD, Paul Donaldson. “We are also very happy to have real bids sup- porting the FEED economics and that they are very well aligned to our DFS estimates. We are now looking forward to the comple- tion of commercial negotiations to identify our preferred service provider as we con- tinue to advance the Tier 1 Colluli Sulphate of Potash (SOP) project. In addition to firm- ing up the project economics as the project advances towards construction, the opera- tional contracts are key inputs to support our ongoing funding discussions.” Colluli is located in the Danakil Depres­ sion region of Eritrea, and is approximately 75 km from the Red Sea coast, making it –

says Danakali – one of the most accessible potash deposits globally. Mineralisation within the Colluli resource commences at just 16 m, making it the world’s shallowest potash deposit. A definitive feasibility study (DFS) for the production of potassium sulphate was completed in November 2015. The DFS utilises a modular development approach whichmitigates risk while enhancing fund- ability and economic return. Phase I of the project is expected to pro- duce approximately 472 kt/a of premium SOP product with commissioning currently targeted for Q4 2018. The capital cost of Phase 1 is estimated at US$332,7 million. Phase II will double SOP production. 

December 2017  MODERN MINING  11