Russian billionaire guarantees to buy output of Eritrean mine

2018-06-12 10:33:44 Written by  Martin Plaut Published in English Articles Read 275 times
Swiss-based Eurochem, owned by Russian businessman Andrei Melnichenko, has agreed to buy the output of one of the richest sources of potash in the world: in Eritrea’s Danakil desert.
 
The statement, from Australian based Dankali Limited, says that Eurochem “will take, pay, market and distribute up to 100% (minimum 87%)” of its sulphate of potash output.
 
The mine is 50% owned by the Eritrean government’s Eritrean National Mining Corporation and 50% by Danakali Limited.
 
Danakali’s chairman, Seamus Cornelius, described the deal as a “significant milestone because it enables Danakali to achieve the required project funding and significantly de-risks its financial position in relation to its Colluli potash project.”
 
The Colluli mine is the company’s flagship asset that will produce almost 1 million kilotons of sulphate of potash annually when the project is fully developed over the coming years. Exploration has been under way since 2012.
 
Eurochem is owned by Andrei Melnichenko, reportedly Russia’s seventh richest businessmen, with an estimated wealth of over $15 billion.
 
The company produced the first potash from its new $2 billion plant in Russia in March and plans to launch another plant later this year.
 
Eritrea’s Danakil desert, one of the hottest places on earth, is the source of rich potash deposits.
 
Australia’s Dankali provided this description of the planned operation: “The Project is located in the Danakil Depression region of Eritrea, and is ~75km from the Red Sea coast, making it one of the most accessible potash deposits globally. Mineralisation within the Colluli resource commences at just 16m, making it the world’s shallowest potash deposit. The resource is amenable to open pit mining, which allows higher overall resource recovery to be achieved, is generally safer than underground mining, and is highly advantageous for modular growth.”
 
This is the company video.
 
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