Australian Potash harvests first potassium rich salts

Australian Potash has confirmed that the environment at its Lake Wells sulphate of potash project in the Goldfields region of WA is ideal for solar salt production after harvesting 11 tonnes of potassium rich salts from the first harvest pond.

The company said that between 13 and 14 tonnes of potassium rich salts had crystallised in the second harvest pond and that more than 40 tonnes of concentrated brines have been transferred into the third and final harvest pond.

Once the final evaporation step has been completed, which is anticipated to occur in the next 14 to 21 days, a blend of salts from all three harvest ponds will be processed to a refined sulphate of potash at the company’s pilot processing plant.

Australian Potash expects to produce 150,000 tonnes of premium potash per annum for the first 5 years of its operation with a lower level scoping study, announced to the ASX early in 2017, estimating that this could generate $61m per annum in pre-tax cashflow.

Capital costs are estimated at $175m, which the company says,  places Lake Wells in the lowest quartile on the global operating costs curve.

Payback of the capital cost is estimated by management at just under 3 years at an assumed sales price of $795 per tonne of potash.

Interestingly, Australian Potash says that production could increase to 300,000 tonnes per annum in a second stage development.

It now has MoU’s in place with two of China’s largest agricultural companies, Sino-Agri and Hubei-Agri, for a combined product offtake of 200,000tpa.

Australian Potash Managing Director Matt Shackleton said: “With this transfer of brine into the final harvest pond, the pilot evaporation pond program is rapidly concluding.”

“We plan to provide trade samples of APC’s Lake Wells SOP to our existing MOU offtake partners, Sino-Agri and Hubei-Agri, as we look to move the relationships with those parties to a more formal off-take position.”

“We are also constantly engaged with Australian users and distributors of SOP, and we look forward to providing evidence of the quality of our product to those parties too”

Annual consumption of all potash types in Australia is between 500,000 and 600,000 tonnes with sulphate of potash, which can command a price premium of up to 100% over the more common muriate of potash, accounting for between 50,000 and 60,000tpa.

Australian Potash is conducting a definitive feasibility study on the Lake Wells project and expects to release the findings in the first half of 2019.

If the DFS mirrors the Scoping Study, it will be game on for Australian Potash.