Allana Potash announces $800m capex for Ethiopian mine

A preliminary economic assessment for the Danakhil potash project in Ethiopia pegs the capital costs at $797 million.

Canadian potash junior Allana Potash announced the figure yesterday while also outlining plans to raise the capital during a conference call to investors.

CEO Farhad Abasov said during the call that nearly all the debt funding would come from development agencies such as the International Finance Corp (IFC), the African Development Bank and export-import banks from the US, Canada and Europe.

The remaining $300 million would come from the sale of equity stock.

According to the PEA, the mine would produce a million tonnes of muriate of potash per year, for a minelife of 30 years, using open pit and solution mining methods. The project is expected to begin producing in 2014.

The deposit contains measured and indicated resources of 126 million tonnes of KCI and 119 MT inferred KCI.

MINING.com reported in August on the appointment of Dr. Mark Stauffer, past president of the Potash and Phosphate Institute of Canada, to Allana Potash chairman, and the company's move to the Toronto main board.

The company's stock has more than doubled over the past year on the back of rising potash prices and news of the Danakhil project advancing.

Map of the Danakhil potash project by Allana Potash