Highfield Resources (ASX: HFR) has found a buyer for the by-products from its Muga potash mine with Pardira Premium (trading as Maxisalt) agreeing to take 500,000 tonnes a year of salt.
The memorandum of understanding paves the way for Maxisalt to purchase 400,000tpa of the higher value vacuum salt and a further 100,000tpa of de-icing salt.
“The signing of a salt offtake memorandum of understanding is another very important step in Highfield’s commercialisation strategy,” Highfield chairman and acting chief executive officer Richard Crookes said.
“Maxisalt has developed a key global network and the location of our Muga mine is perfectly positioned to service Maxisalt.”
“In addition to the memorandum of understanding being economically significant, it also reinforces our strong ESG focus on maintaining a low environmental footprint at Muga.”
He added that removing the salt by-product from the operation was a key element in rehabilitating the mine after production.
Muga potash mine
Based in Spain, Highfield’s flagship Muga project is targeting the shallow sylivinite beds within the project area that cover about 60 square kilometres across Navarra and Aragon provinces.
The company plans to start mining from a 350m depth, which will make a relatively low cost and conventional potash operation.
Once operational, the latest feasibility study indicates earnings before interest tax depreciation and amortisation of €300 million (A$500 million) annually at full production.
According to Highfield, Muga will be one of only two potash mines in the southern European market.
During the March quarter, Highfield inked a memorandum of understanding enabling Keytrade AG to purchase 300,000tpa of the mine’s expected muriate of potash product.
Highfield remains in ongoing offtake discussion regarding the remaining potash and salt from Muga.
The company stated it was confident in securing the required funding to bring the project online, with forecasts pointing to ongoing strong demand for potash in the long-term.