Danakali begins work on Eritrean potash project

Danakali (LON: DNK) has kicked off the first development phase of of its world-class Colluli potash project in Eritrea by selecting the team in charge of the Engineering, Procurement and Construction Management (EPCM) process.

The Perth-based miner said it expects to begin Phase 2 in mid-February, which will be followed by geotechnical investigation work that is set to begin in March.

Danakali is working with consultancy DRA Global and multinational professional services company Turner and Townsend to review the project’s front-end engineering design. This includes developing project systems, project controls and progress measurement monitoring, it said.

The team has also begun project management activities and mobilized its own engineering group for the process plant, associated infrastructure and Water Intake Area (WITA) design.

Colluli, a 50-50 joint venture between Danakali and the Eritrean National Mining Corporation (ENAMCO), has been called “a game changer” for Eritrea’s economy, as it’s expected to become one of the world’s most significant and lowest-cost sources of sulphate of potash (SOP), a premium grade fertilizer.

“The government will benefit from the longer-term development of the project, and the expected significant boost to royalties, taxation and exports, and from jobs and skills and economic development of the region,” chief executive Niels Wage told MINING.com last year.

The development of the Colluli potash project coincides with the move towards diplomatic relations between the once feuding countries in northeastern Africa of Eritrea and Ethiopia, which officially declared peace in July 2019.

A United Nations report published last year suggested that Colluli could significantly boost the economy of Eritrea, a country that, until last year, was on the UN’s sanctions list.

The document estimated that Colluli would contribute 3% of the country’s GDP by 2021 and 50% of the nation’s exports by 2030, while providing 10,000 direct and indirect local jobs.

It also identified how the mine could help Eritrea advance its sustainable development agenda, which consists of 13 priority Sustainable Development Goals (SDGs).

In the initial phase of operation, Wage said, Colluli would produce more than 472,000 tonnes a year of SOP. Annual output could rise to almost 944,000 tonnes should Danakali begin a second phase of development, as the project has a possible 200-year plus mine-life.

The asset has the potential to produce other fertilizer products, such as Sulphate of Potash Magnesium (SOP-M), muriate of potash (MOP) and gypsum, along with rock salt. There is also potential for kieserite and mag chloride to be commercialized with minimal further processing required.

This article first appeared in our sister publication, Mining.com.