Australia’s first batch of field-evaporated sulphate of potash has been produced by Australian Potash (ASX: APC) at its pilot processing facility in suburban Perth, Western Australia.
The facility output an initial 65 kilograms of the product from a maiden delivery of 3 tonnes of potassium-rich harvest salts mined at the company’s Lake Wells project in WA’s goldfields region.
The delivery was made in December and the production process managed by a senior engineer seconded from Canadian metallurgical specialist Novopro.
Preliminary analysis from titration indicated a 98% purity grade equivalent to approximately 53% potassium oxide.
The pilot facility is on track to produce Australian Potash’ targeted volume of 250kg from the first salts delivery.
Australian Potash managing director Matt Shackleton said the pilot run provides a proven processing pathway to high-grade sulphate of potash.
“When combined with our logistical advantage close to transport infrastructure and within a low-risk brine geological setting, we are confident that Lake Wells will be able to deliver a high-quality, low-cost product for the world market,” he said.
“We look forward to using the sulphate of potash already produced for research through 2019 which will allow us to further define the agronomic benefits of Lake Wells salts in WA’s soil profiles and further demonstrate our commitment to the local agricultural sector.”
Mr Shackleton said a 2017 scoping study confirmed the “exceptional economics” of Lake Wells and highlighted the company’s potential to become a significant long-life, low capital and high margin sulphate of potash producer.
“That study exceeded our expectations and confirmed the project’s economic, financial and technical aspects are all exceptionally strong,” he said.
“It showed the mine could enjoy considerable production scale, low capital expenditure, high margins and a long life.”
The company is currently progressing a definitive feasibility study for Lake Wells, due for release this year.
In December, WA’s state government confirmed its commitment to assisting the development of local potash projects by lowering the rental rate per hectare for project owners.
The existing rental rate of $18.70 per hectare would be reduced to $2.32/ha for the first five years of a new mining lease, and $4.64/ha from year six onwards.
The changes are designed to assist development of the industry and create employment and community development opportunities, particularly in remote Aboriginal communities.
“We are delighted that government has acted on industry’s concerns regarding mining leases for minerals in brine, as these operations require substantially larger mining leases than other forms of mining,” Mr Shackleton said at the time of the announcement.
“This decision will further reduce the cost of our lowest cost quartile production profile, making [Lake Wells] more internationally competitive.”
Potash is vital for agriculture as it is an essential nutrient in fertilisers which protect food crops from disease and pests.
It is known to improve water retention, yield, taste and appearance of crops.
At midday, shares in Australian Potash were up 10.53% to $0.105.