Danakali Ltd (ASX:DNK) has now met all criteria for the submission of its mining license application for the Colluli potash project in the east African country of Eritrea.
The final pre-requisite was the submission of the Social and Environmental Impact Assessment (SEIA) to the Ministry of Energy and Mines, which is now complete.
The next steps involve the submission of the mining license application, establishment of the mining agreement and stakeholder engagement and public disclosures as dictated by the SEIA.
Paul Donaldson, managing director, commented: “We are very pleased to have passed the adequacy assessment for the social and environmental work and to have now completed the pre-requisites for the mining license application process.
“We are looking forward to submitting the mining license application in the near future, and working with the project stakeholders as we complete the permitting process.
“Colluli is rapidly advancing towards mine ready. The project demonstrates superior economic returns relative to other advanced sulphate of potash (SOP) projects throughout the world, has unrivalled diversification and growth potential, and is located at the epicentre of booming population growth.
“The project is positively unique and has no peer.”
Danakali is focussed on the world class Colluli Potash Project in Eritrea, where a definitive feasibility study (DFS) has demonstrated the lowest capital intensity of all advanced SOP projects.
Colluli is predicted to be in the bottom quartile cost curve meaning it will generate sustainable industry-leading returns throughout the commodity cycle.
Danakali has a 50% equity interest in Colluli through a joint venture with the Eritrean National Mining Company.
Danakali recently signed non-binding memorandums of understanding (MOU’s) with eight multinational parties throughout Northern Africa, Europe, Middle East and North America for the off-take of SOP from Colluli.
The company’s experience operating in the less known jurisdiction of Eritrea has been positive and the company has an excellent working relationship with their joint venture partner.
Colluli meets all the criteria of a tier 1 potash asset and is considered one of the most fundable projects in the world.
With the DFS boasting a post tax net present value of US$860 million and Danakali’s current market cap being circa A$60 million, a large value proposition exists for investors.
Population growth is the short and long term driver for the SOP market.
As the global population continues to grow, the world requires a higher yield from farmable land to produce food.