ERITREA has given its support for the development of the Colluli potash project which is being led by Danakali, a Sydney- and London-listed company operating in joint venture with the East African country’s government.
Potash contains potassium, nitrogen and sulphur which is beneficial to economic development as a crop-growing fertiliser.
Danakali now has 36 months from the submission of a notice to begin mining – accepted by the Eritrean Ministry of Energy & Mines (MoEM) – to complete the project in which some $200m will be spent.
The Eritrean government also accepted the accounting structure through which the project will be executed. As part of the authorisation announced today, Danakali has met a number of additional regulations including a mining licence and environmental protocols.
“This year, the project team has made significant progress through management of DRA during Phase 1 and 2 of the EPCM works and most recently by commencing the necessary test works, enabling us to maintain forward momentum of the Project Development,” said Niels Wage, CEO of Danakali in a statement.
The Africa Finance Corporation (AFC) has with African Export-Import Bank agreed to provide $200m in senior debt finance to Danakali which is enough to see the project through to completion. The AFC also took a $50m equity stake in the project of which half has already been paid. The balance will be paid by November this year in terms of an extension agreed in June.
