Date: Friday, 18 June 2021
Six months of extensive testing has proved Danakali can create sulphate of potash at its flagship asset using filtered seawater, improving the project’s environmental footprint and lowering opex, capex and maintenance costs.
Danakali Ltd (ASX:DNK) (LSE:DNK) (OTCMRKTS:DNKLY) says test-work conducted at its low-cost Colluli Potash Project in East Africa has confirmed production rates and outlines a path to lower operating and capital costs.
Colluli Mining Share Company (CMSC), a joint venture vehicle with ownership split between Danakali and the Eritrean National Mining Corporation (ENAMCO), conducted the extensive test-work program over a six-month timeframe.
Promisingly, analysis has revealed the project’s sulphate of potash (SOP) production rates align with a previous front-end engineering and design study.
Ultimately, the test-work program proves Danakali can produce SOP using only filtered seawater, lowering the opex and capex costs tied to the compound’s production.
Colluli hosts the world’s largest JORC-compliant solid salt and sulphate of potash reserve, weighing in at 1.1 billion tonnes.
Speaking to the test-work findings, Danakali executive chairman Seamus Cornelius said: “Colluli has been extensively studied by CMSC and the latest test-work builds on and confirms earlier work.
“While I am aware of the view that we have done ‘too much study’, the latest results more than justify the work.
“Colluli is unique in the proper sense of the word and its exceptional size, grade and overall quality merit and reward the extra work.
"Every study has increased our certainty that Colluli is the asset that will dominate the SOP industry and change agriculture for the better in Eritrea, across Africa and beyond.
“Actually, knowing we can produce high-quality SOP from Colluli ore using filtered seawater and a fully tested process because we have done it is another significant advantage for Colluli”.
Danakali executed the test-work campaign with a suite of industry experts: the Saskatchewan Research Council (SRC), Global Potash Solutions (GPS), DRA Global and CasCan.
The company also worked closely with its offtake partner, EuroChem, to ensure high-quality SOP was produced in line with international standards.
With a vision to capitalise on the extensive resource at Colluli, Danakali has completed a comprehensive test-work program evaluating its SOP production process.
Primarily, this is because the company is working to create the product unconventionally, using only filtered seawater taken directly from the Red Sea.
Essentially, Danakali’s SOP production process involves three key ores, known as sylvinite, carnallite and kainite.
Each of these ores goes through crushing stages before moving into a decomposition phase. Here, the kainite ore is decomposed until a mineral known as leonite floats to the top.
Meanwhile, the carnallite ore goes through a screening process, producing the all-important potassium chloride mineral known as KCI.
Together with the leonite and filtered seawater, the KCI goes through a suite of centrifuge, washing and drying stages to create sulphate of potash.
According to Danakali, this SOP production method is a highly effective and environmentally friendly alternative to conventional processing techniques.
The SOP production process.
At the start of its test-work program, Danakali set out to research two key areas.
First, the company wanted to develop and prove a flotation strategy that effectively separated the different groups of ore mineralisation found at the Colluli project.
Then, Danakali was determined to develop a robust process that converted recovered leonite into high-purity SOP using only seawater.
The ASX-lister opted to use seawater to complete the conversion process because of its environmental properties and the chance it could lower the project’s opex and capex.
In 2015, test-work proved the company could create SOP from Colluli ore, but only with high water rates and reverse osmosis freshwater.
Originally, Danakali wanted to convert water from the Red Sea into purified water and transport it inland via a pipeline system. However, this process required far more energy and entailed a much larger environmental footprint, meaning it wasn’t a viable option.
As a result, the extensive six-month test-work program set out to confirm SOP could be made with filtered seawater instead.
Promisingly, over the course of the program, Danakali managed to produce high-grade SOP using only filtered seawater at low chloride levels - measuring less than 0.5%.
It estimates it can produce 472,000 tonnes of SOP per annum from Module 1 and 2.
Executive chairman Seamus Cornelius said: “Using filtered seawater as an unlimited input in our production process is not only a world first but also a long-term game-changer.
This will reduce capex, opex and sustaining capex over a very long time and have a massively positive environmental impact onshore and in the Red Sea for the 200 years life of mine.
With the water intake treatment area redesign, our energy requirements are materially reduced, bringing us closer to our Zero Carbon goals.