Eritrea accepts Danakali’s mining development plan for Colluli potash JV

Caravan bearing mined salt makes way through Danakil Depression in neighbouring Ethiopia

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.