Australian Potash Limited (ASX: APC) has recorded a significant increase in production estimates in its Front- End Engineering and Design (FEED) programme for the Lake Wells Sulphate of Potash Project in Western Australia.
The studies found that an optimised sustainable Sulphate of Potash development will produce 170,000 tonnes per annum of the company’s trade-marked, premium priced K-Brite SOP products for distribution across the world’s most lucrative markets.
Managing Director and CEO, Matt Shackleton, said this would lead to a 20,000 tpa increase in output.
“The Lake Wells Sulphate of Potash Project has always been somewhat unique across the peer space for being the only project to be developed with 100% bore-field abstraction of brine, with no re-charge or rainfall factors included in the largest Australian JORC compliant Measured SOP resource of 18.1 million tonnes. The mine plan uses a mere 24% of this resource over the projected 30-year mine life.
“SOP is globally regarded as the premium form of the essential, non-substitutable potassic fertilisers. We are immensely proud to be developing an operation using an industry high 44% renewable energy penetration rate – we will produce Australia’s lowest carbon footprint SOP and will generate approximately one-third of the emissions attributable to a comparable sized Mannheim SOP process.
“As well as being certified for use in organic agriculture in many countries into which it will be distributed, the LSOP has received Green Loan verification. K-Brite SOP can rightly be regarded as a truly green fertiliser.
“The suite of offtake agreements we have executed with our Tier 1 global distribution partners give APC not only downside price protection, but they also afford the Company unlimited upside price premium. We will manufacture a range of premium finished products that will allow our partners to sell into the world’s highest price points for SOP. The A$614 million NPV8 includes the granulation and bagging circuits required to tap these premium price points.
“The syndicated development debt being finalised includes a A$140 million facility with Northern Australia Infrastructure Facility (NAIF) and conditional credit approval for a A$45 million facility with Export Finance Australia. Commercial banks, both domestic and international, continue their due diligence and credit approval processes with a view to providing core debt and working capital & cost overrun facilities normal to this type of development.
“We have significantly de-risked the construction of the LSOP with more than 75% by value of Project contracts being arranged on a lump sum EPC basis. These arrangements provide our stakeholders with protection against time and cost over-runs, and in operations, guarantees for performance. In addition, approximately 20% of all construction contracts will be awarded to Aboriginal businesses or joint ventures that are majority controlled by Aboriginal corporations.
“We now look forward to progressing to a final investment decision to develop the Lake Wells SOP Project.”