Dehai News

Mining Review: Power generation bids & contract mining EOIs complete for Danakali Colluli project

Posted by: Semere Asmelash

Date: Thursday, 06 April 2017

Danakali
                                       East Africa Projects  
6 April 2017

Power generation bids & contract mining EOIs complete for Danakali Colluli project

ASX-listed Danakali has received all bids for power generation for the Colluli potash project. A comprehensive evaluation of the tenders has now commenced.

Power generation bids

The bidding process for the power generation followed an expressions of interest phase which was completed in January.

Tender documents have been received from a group of highly reputable power providers with extensive experience in both Africa and other developing jurisdictions. The bids were based on the power generation technical specifications determined in the definitive feasibility study.

These specifications are currently being refined as part of the front-end engineering design (FEED) process which commenced in January and is progressing well.

Evaluation of the bids from the shortlisted parties is expected to be completed by late April, after which the preferred service provider will be selected and commercial terms finalised.

The definitive feasibility study for the Colluli project contemplated power generation utilising a build own operate transfer (BOOT) model, which formed the basis of the formal tendering process.

“We are pleased to be advancing our contracting process and we look forward to the evaluation of the power generation bids, as well as the selection and appointment of our preferred power generation service provider,” says Danakali MD Paul Donaldson.

“We are also very happy with the high level of interest we have received to date, which is a clear endorsement of both the project and the jurisdiction. The front-end engineering process is progressing well, and we are currently hosting a visit of site engineers within Eritrea for detailed engagements with local service providers and completion of detailed logistics studies for the delivery of the plant components.”

Danakali, in conjunction with the Eritrean National Mining Corporation (ENAMCO), is developing the Colluli potash project located in the Danakil region of Eritrea, East Africa. Colluli is the largest and shallowest known evaporite deposit in the world with a solid form ore reserve estimate of over 1.1 Bt.

Mining contract expressions of interest

Danakali has also completed the expressions of interest (EOI) process for mining contractors for Colluli.

The EOI phase is a precursor to the mining contract tendering process which will commence shortly.

Expressions of interest have been received from mining contracting firms based in Australia, South Africa, and the broader African continent. All parties have extensive experience in the African mining industry and specialise in open cut mining methods.

The shortlisted parties will formally bid in a competitive tendering process using further refined and detailed pit designs and material movement schedules derived in the definitive feasibility study. An appointment of a suitable industry service provider to further optimise and refine the mining schedule, in line with the FEED work which is currently underway, will be made in the very near future.

The mining method, which includes the use of conventional haul trucks, excavators and surface miners was established during the Colluli feasibility studies after a series of economic trade-off evaluations.

Surface miners are highly suitable for salt mining and provide a high degree of selectivity. This is highly advantageous for managing the suite of sodium, magnesium and potassium salts within the Colluli resource.

The use of surface miners negates the need for primary crushing within the processing plant and completely eliminates the need for explosives in the mining operations. The open cut mining method also provides superior resource to reserve conversion in contrast with the alternate potash mining methods of underground and solution mining. The mining operation will generate a low waste to ore ratio of approximately two to one.

Feature image credit: Danakali

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