Kore wins 25-year environment and social impact permits for RoC potash projects

Potash

KORE Potash registered an important milestone today in its efforts to develop its 97%-owned Sinotoukola Potash Project in the Republic of Congo (RoC) after the central African government approved environment and social impact licences (EISA).

The licences – which have a 25-year tenure – were for both the Dougou and Kola parts of the Sinotoukola project. A pre-feasibility study on the so-called Dougou Extension (DX) is expected to be completed in the latter part of the quarter, the company said.

“The 25-year ESIA period is now aligned with the timeframe of the Mining Convention between Kore and the Government of the Republic of Congo, which was passed into law. This offers improved certainty for all parties and stakeholders,” said Kore CEO, Brad Sampson, in a statement. In the past, the RoC has granted EISAs for three year periods.

DX presents the quickest pathway to potash production and cash generation for the company and the larger Kola project is planned for development subsequent to first production from DX, said Kore Potash.

Pre-production costs at Kola were scoped by the French consortium at $2.1bn and although optimisation studies have lowered the capital cost, DX comes in at a much lower $200m. Kore Potash had asked the French consortium, among other companies, for a new proposal but said in January it had failed to extract an improved proposal.

In addition to working on the PFS for DX, Kore was also working on a mining convention which includes the transfer of the mining licence for DX with the RoC government.

The DX PFS is scoping a 400,000 tons a year operation – roughly half of Africa demand – over a 17-year life of mine, and generating annual free cash flow of $74m in that time. Payback has been put at about four-and-a-half years.