Shares in Kore Potash (LON: KP2) climbed almost 15% on Monday after the company lowered the costs of its Kola potash project in the Republic of Congo by $520 million to $1.83 billion.
The adjustment follows a review of the asset’s optimization plan, which has also allowed Kore to reduce the construction period to 40 months, down from the 46-month period set up in the definitive feasibility study.
Once operational, Kola is anticipated to be one of the world’s lowest cost muriate of potash (MoP) suppliers to African and Brazilian markets, the company said.
Kola will be designed with a nameplate capacity of 2.2 million tonnes of MoP per annum over an initial 31 years of mine life.
“Recent geopolitical events highlight the risks inherent with potash production concentrated within a small number of companies and locations with operations situated long distances inland far from ports and global customers,” chief executive officer Brad Sampson said in the statement. “New potash producers are required in locations closer to customers.”
For about a decade, the potash market was affected by oversupply and low prices. But sanctions affecting Russia and Belarus, which produce about 40% of the world’s potash and fears of a global food crisis due in part to the lack of fertilizers have grown stronger.
Kore Potash shares closed on Monday 14.42% higher at £1.23 a piece, leaving the company with a market capitalization of £41.87 million ($51.4m).