Study confirms potash potential at Danakil Depression, Ethiopia

The Norwegian fertilizer firm Yara International (OTCMKTS:YARIY) has confirmed the potential to mine potash from the Danakil Depression in northeastern Ethiopia.

An independent feasibility carried out on behalf of the firm identified annual production of 600,000 metric tons sulfate of potash (SOP) over 23 years from reserves (kainite, carnallite and sylvinite) at Yara's Danakil concession. The company, which aims to begin mining activities in the third quarter of 2018, is now seeking equity partners to develop the project.

In a press release, Yara said the reserves will be mined using solution mining technology. The brine produced at the mining sites will be evaporated utilizing high solar radiation. The harvested salts will be processed and re-crystalized to SOP. Both standard and compacted SOP will be produced.

The product will be trucked 790 kilometres to Tadjoura, Djibouti, where the project includes a product storage and handling terminal at the new port currently under construction by the Djibouti Port Authority.

Capital expenditure of the project is estimated at US$740 million, while operating expenditure is expected to amount to $167 per metric ton FOB Djibouti.

The Danakil mining project has received the backing of the Ethiopian government, which has committed to providing electric power by building a 130-km long power line, according to Yara. The government will also construct a new road to support mining operations.

Allana Potash (TSX:AAA) is also developing a potash project in the Danakil Depression. Its Danakil Potash Project has a feasibility study released in 2013, indicating a million tonnes per year of muriate of potash (MOP), to be mined via solution mining/solar evaporation from the Sylvinite Zone.