Following the granting of all necessary mining approvals in February 2019, Kalium Lakes Limited’s Beyondie Sulphate of Potash Project (BSOPP) in Western Australia - about 160 kilometres south east of Newman - has since then marked a number of new project milestones.
In early March, Kalium Lakes announced that Front-End Engineering and Design (FEED) has been completed, resulting in improved production and financial outcomes.
Production rate during the first stage of the project is anticipated at 90,000 tonnes annually, a 10 per cent increase from its initial projected production rate. At full operational capacity, the Sulphate of Potash (SOP) facility is expected to have doubled that production rate.
Operating costs for the BSOPP have also reduced after FEED to approximately US$179 to $207 per tonne of SOP, with an expected mine life of more than 30 years. This sets Kalium Lakes as one of the lowest cost SOP producer in the world.
“The completion of FEED works continues to confirm and improve our bankable feasibility study released in September last year.
“The significant reduction in operating costs means that Kalium Lakes is likely to become one of the lowest cost producers in the world. Ensuring we can operate profitable, throughout the normal commodity pricing cycles, continues to be a key focus for the company,” Kalium Lakes Managing Director Brett Hazelden said.
The Northern Australia Infrastructure Facility (NAIF) has invested $74 million towards Kalium Lakes’ project, delivering cost saving benefits with the installation of a gas fired power station as well as a gas pipeline.
By mid-March, Kalium Lakes signed a non-binding agreement with KfW IPEX-Bank for a $102 million debt funding to get works on the BSOPP going.
“With the support of NAIF, KfW IPEX-Bank, Euler Hermes, our investors, management and staff, the development of Australia’s first sulphate of potash production is now one step closer,” Mr Hazelden said.
Further securing the project, Kalium Lakes has finalised a Binding Offtake Agreement with German company K+S for the supply of SOP for a period of 10 years, bringing a revenue of approximately $650 million. With this agreement, Kalium Lakes will be supplying 90,000 tonnes per year - or 100 per cent of the BSOPP’s first stage production - to K+S.
“We are extremely pleased to have reached agreement with one of the world’s pre-eminent SOP producers and distributors.
“As a major long-term partner, K+S offers unparalleled access to extensive expertise in design, construction and operation of SOP facilities, which will assist Kalium Lakes during the critical Commissioning and Production ramp up phase of the project,” Mr Hazelden said.
Kalium Lakes is anticipated to release a Final Investment Decision by the second quarter of 2019.
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