Eritrea: Danakali progresses positive mining licence negotiations for Colluli project

Since drilling commenced at Colluli in early 2010, over 1 Bt of potassium bearing salts suitable for the production of potash have been identified

By Miningreview

Danakali, the ASX-listed potash developer, is positively progressing with its mining licence approval process for the Colluli potash project in Eritrea.

Eritrea – This was confirmed following a site visit to Colluli in late June by the Eritrean Minister of Energy and Mines Sibhat Efrem, who was accompanied by other senior officials of the ministry, including Mines Department director general Alem Kibreab, Energy Department director general Tesfay Zekarias, and Kiflome Debesay, head of finance and administration.

The representatives from the relevant government ministries assigned to the approvals process visited site to assist with evaluation of the social, environmental impact assessments and associated management plans.

The project is wholly-owned by Colluli Mining Share Company (CMSC), which is a 50/50 joint venture between Danakali and the Eritrean National Mining Company.

Danakali MD Paul Donaldson says that the company has a strong and effective relationship with the Ministry of Energy and Mines and have a continuing dialogue with all relevant ministries involved in the mining license approvals process.

Danakali and the CMSC have enjoyed strong engagement with all relevant Eritrean ministries throughout the pre-feasibility study and definitive feasibility study (DFS) phases. “We look forward to our ongoing relationship with all key stakeholders as we take the development into construction and subsequent production,” says Donaldson.

Moreover, Danakali, in line with the requirements of the Equator Principles, has completed and closed a two-month public review period of the social and environmental impact assessment (SEIA) and associated management plans (SEMP).

During this time, all documentation was made publically available for the two-month review period, with over 500 local residents included in stakeholder engagements.

The Equator Principles is a framework adopted by financial institutions for determining, assessing and managing environmental and social risks in projects.

Feedback received from the public review process has been positive with overwhelming support by local and regional communities. No issues have been raised from the public review and feedback process, Danakali notes.

CMSC will continue with ongoing community, local government and stakeholder engagements throughout the rest of the year leading up to construction activities while also continuing its high level of engagement with the Ministry of Energy and Mines and the Ministry of Environment in support of the mining licence approval.

Project update

Following the completion of the DFS in November 2015, Danakali is currently awaiting mining license approvals. Funding discussions are also underway and the company has signed memorandums of understanding for 800 000 tpa of sulphate of potash.

The DFS indicates industry leading capital intensity, bottom quartile operating costs and an ore reserve of 1.1 Bt.

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