Danakali identifies economic and environmental improvements to flagship Colluli SOP project

Danakali ASX DNK economic environmental Colluli SOP project
Danakali chief executive officer Niels Wage said the updated validates the “robustness of the project”.

Africa-focused sulphate of potash explorer Danakali (ASX: DNK) has completed an updated process plant and infrastructure study for the Colluli project, which has identified optimisation studies and confirmed the “robustness” of the front end engineering design.

Danakali noted it had identified environmental and economic improvements including a beach well intake for the water intake treatment area, which has a lower environmental impact and was found preferable to a subsea intake pipeline.

The study found the beach well intake minimised risk to subsea and coastal habitats by avoiding onshore pipeline construction and offshore installation.

Another optimisation was dry harvesting from back end recovery ponds, resulting in a less complex processing design.

Danakali has also selected RA International as camp provider which will give the project a fit for purpose manufactured camp.

Chief executive officer Niels Wage said the update gives “increased certainty and understanding” of the project and its schedule.

“The detail review process again validates the robustness of the project and previous technical studies.”

“It is also pleasing to see that a number of optimisation opportunities in the process are established that will further de-risk the project,” Mr Wage added.

Colluli SOP project

Danakali owns 50% of Colluli, which is in Eritrea. The Eritrean National Mining Corporation owns the other half.

Colluli hosts a 1.1 billion reserve which underpins an almost 200-year mine life.

The project is about 75km from the Red Sea coast, which Danakali claims makes it one of the most accessible potash deposits in the world in addition to being the shallowest known potash deposit with mineralisation starting at just 16m below surface.

According to Danakali, another of the asset’s key advantages is that the salts are present in solid form compared to brines. This reduces infrastructure costs and time required to reach full production capacity.

Additionally, the project is “favourably positioned” to supply the world’s fastest growing markets, with a binding offtake agreement already secured with EuroChem Trading GmbH.

Danakali is targeting first production within two years at the project, with mine development approvals secured at the end of July.

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