Australian Potash closes in on sulphate of potash production from Lake Wells

Australian Potash ASX APC harvest salts SOP production sulphate potassium
Australian Potash has received 3 tonnes of potassium rich feeder salts at its Canning Vale pilot processing plant for production of SOP trade samples.

Australian Potash (ASX: APC) is a step closer to becoming the first Australian producer of field evaporated sulphate of potash (SOP) after three tonnes of potassium rich harvest salts from its Lake Wells pilot program in the Western Australia’s eastern goldfields arrived in Perth for processing.

The company’s facility in Canning Vale will now process the salts to produce SOP trade samples through January 2019.

The samples will then be verified in the first quarter of 2019 as talks with potential Chinese offtake partners progress.

Australian Potash managing director Matt Shackleton labelled the delivery of final salts to the processing plant an “important milestone” in the company’s development plans.

“Understanding the chemistry of the salts that are produced through the natural evaporation cycle is crucial to planning both the commercial scale development and SOP processing strategies,” he said.

Firming up Lake Wells

The news comes ahead of the Perth-based company’s plans to produce Australia’s first field evaporated SOP, which Mr Shackleton said would prove valuable to its offtake partners.

The company is focused on developing an operation at Lake Wells that can produce the high-value fertiliser at a cost that promotes SOP over muriate of potash fertiliser.

The company’s Lake Wells project has the advantage of being close to rail and port infrastructure, while local government support and a planned low-risk brine abstraction model, are expected to bring down operating costs.

Australian Potash is currently undertaking a definitive feasibility study into the development of the Lake Wells potash project following the completion of a scoping study in early 2017.

At an initial 150,000 tonne per annum output, the scoping study put a $160 million price tag on the operation.

Government support

Earlier this month, the WA government made good on its plans to assist the development of the local potash and minerals sector, announcing it would reduce potash rental rates.

The decision means potash projects that are granted a new class of mining lease for restricted minerals will pay 2.32 per hectare for the first five years of the lease and $4.64pha from year six onwards.

This represents a significant reduction on the existing $18.70pha rental rate.

The cost reduction is aimed at assisting the development of the potash industry in WA in a bid to stimulate employment and community development opportunities.

The decision was warmly welcomed by Australian Potash.

“This decision can further reduce the cost of our lowest cost quartile production profile making this [Lake Wells] an even more internationally competitive project,” Mr Shackleton said at the time.

Australian Potash shares were unchanged at $0.072.

Lauren has more than six years’ experience as a business journalist and editor in Australia and Southeast Asia. With specialist knowledge of the resources sector, including oil and gas, she has covered publicly listed companies of all sizes. Lauren has reported across a range of industries including mining and property.