Danakali completes sale of stake in Colluli potash project
Danakali has announced completion of sale of its 50% stake in the Colluli potash project in Eritrea. The Australia’s firm been in partnership with Eritrean National Mining Corporation (ENAMCO) over the mine project.
The Colluli potash project is a low-cost, long-life sulphate of potash (SOP) project under development in Eritrea, Eastern Africa. It has been ranked as world’s most significant and lowest-cost sources of sulphate of potash (SOP), a premium grade fertilizer. It boasts JORC compliant reserve at 1.1 billion tonnes.
Colluli potash project
Colluli potash project also projects commercialization of kieserite and mag chloride. Other fertilizer products at the site include; gypsum, rock salt and muriate of potash (MOP). It also has access to solar, wind and geothermal energy systems – the East African rift.
The project is the only known source of potash that allows extraction of the fertilizer in solid form. It also has access to solar, wind and geothermal energy systems – the East African rift. The operating environment weighed heavily on Danakali’s decision, as Eritrea is ruled by one of the world’s most oppressive regimes and was until 2018 on the UN’s sanctions list.
90% of the $121 million cash that Danakali has been left with will be distributed back to shareholders. The remaining cash, about $12 million will be used to identify new projects and potential new alternative growth opportunities. The buyers, Chinese company Sichuan Road and Bridge Group, have paid a first instalment of $105 million. A second tranche payment of $16 million is expected within the next six months.
