JOHANNESBURG (miningweekly.com) – Strategically positioned Republic of Congo, which is endowed with the important thing required uncooked supplies, is poised to be a world chief in fertiliser manufacturing.
That is the view of Stéphane Rigny, the manager chairperson of Kanga Potash, which has obtained its licence to mine and produce potash within the nation positioned on the west coast of Central Africa, to the west of the mighty Congo river. (Additionally watch hooked up Creamer Media video.)
“The Republic of Congo will turn out to be a world chief within the manufacturing of fertilisers,” is Rigny’s forecast.
“We’ve got found the thickest carnallite seams ever drilled wherever on the earth. The seams of recoverable carnallite are within the order of 210 m thick,” added Rigny.
Carnallite is a mineral consisting of hydrous potassium-magnesium chloride that is a vital supply of potassium and the thick recoverable carnallite is at a depth of about 1 000 m.
A part of the work we did was to drill the precise licences the place we had recognized that impairment and we proved up that we do certainly have as much as 210 m.
Rigny described the steadiness of the Republic of Congo as being very conducive for enterprise.
By placing emphasis on energy era, the nation now has extra.
The Kanga undertaking is predicted to have a variety of spinoff industries and a growth multiplier impact that Rigny believes goes to reshape the economic system of the Republic of Congo.
Kanga, a personal firm, is coming into the preconstruction growth part of a undertaking aimed initially at extracting 600 000 t/y of muriate of potash (MoP) manufacturing from its 12-billion-tonne potash useful resource.
“There may be nonetheless a little bit of a highway forward of us however from the purpose at which we press the button to successfully begin breaking floor and establishing is a 36-month interval. We are actually coming into the part the place we’re going to do the entrance finish engineering, which is a part of execution. From there we’ll have a couple of 36-month interval.
“All of the items of the puzzle on the funding facet are recognized and definitely, within the subsequent 12 months, we’ll be bringing the undertaking to monetary shut,” Rigny informed Mining Weekly in a Zoom interview.
Given the undertaking’s economics and its developmental multiplier features, there’s important urge for food from personal, growth finance establishment (DFI) and export credit score company (ECA) debt suppliers.
Concerning the significance of fertilisers, he stated: “The whole planet is now very targeted on meals safety, which is a significant concern for many elements of the world if not all elements of the world.”
Deglobalisation has set off a race that goes past monetary returns.
“It’s virtually an existential debate with the fertiliser paradigm shifting in the identical method as our world paradigm is shifting. We count on big development in agriculture and robust demand for fertilisers,” added Rigny.
Kanga Potash goals to develop its undertaking in a phased method with a primary 600 000 t/y MoP manufacturing module.
“This can place us as the primary African MoP producer and the primary MoP producer within the southern hemisphere. From there, we are going to improve manufacturing capability to over two-million tonnes of manufacturing a 12 months of MoP,” he stated.
Earlier this 12 months, strain ensuing for present geopolitics resulted in MoP costs rising above $1 000/mt value and freight (CFR) Brazil. The principle importers are Brazil and China and demand is more and more being seen in Africa.
Mining Weekly: When are contractors prone to be appointed to construct the undertaking?
Rigny: A name for tender course of was accomplished and three world class main engineering procurement and building (EPC) contractors have been shortlisted. Every considered one of these contractors has the monetary capability, expertise and experience to be our EPC contractor.
The place does the undertaking stand on the price curve?
The undertaking is exclusive on the earth. It’s all about geology and geography. We’ve got found the thickest carnallite seams ever drilled wherever on the earth. This has a significant influence because it signifies that we will apply resolution mining with out having to drill as many caverns as a conventional resolution mining operation. This has a large value saving influence and permits us to scale back working bills (opex) dramatically. From a geography standpoint, it occurs that these thick seams that are concentrated completely in our licence areas are subsequent to the coast. Which means our mine-gate value is just about our free-on-board value. We’re on the bottom level on the price curve and might compete with the present lowest value producers on the earth who normally have lots of if not hundreds of kilometres between their operations and export terminals. The Republic of Congo is uniquely positioned as it’s ten days straight line transport distance from the world’s largest importer of MoP, Brazil. It’s also strategically positioned in the course of Central/West Africa prepared to provide the continent on the exact second in historical past when Africa is staged to turn out to be an agriculture and meals safety powerhouse.
How is the undertaking being funded?
We’re a personal firm and we’re blessed with having unbelievable well-funded companions with whom we have now invested over $40-million up to now to get to the place we’re. For the following stage, we have now retained Natixis as our advisers. They’ve important expertise in structuring undertaking finance for such tasks. Given the economics, the meals safety and growth multiplier features of the undertaking, there’s important urge for food from personal, DFI and ECA debt suppliers. We goal to construction the undertaking alongside a 60/40 debt to fairness gearing. The fairness part will likely be offered for from pre-export finance amenities for which discussions are underneath method with main offtakers in addition to from funding funds. We even have two strategic world class firms with whom we’re engaged in discussions and who’ve each accomplished due diligence. Every considered one of these firms has the monetary wherewithal to fund your complete undertaking. Lastly, we have now just lately been approached by a bunch able to deliver us to a list on a significant worldwide trade. We’re contemplating this chance.
What capex will likely be required and what’s the anticipated degree of opex?
The capex for the primary part is estimated at about $580-million together with value of finance. The opex will likely be within the mid-to-late $60/t, which once more positions us very competitively.
What’s the present state of the potash market?
The potash market has been dramatically impacted by present geopolitics. Mixing with regular anticipated development figures, has produced important upward strain attaining earlier this 12 months costs above $1 000/mt CFR Brazil. The costs have come down from these highs and now sit round $850/mt. We consider that in time this can additional normalise and settle within the $500/mt vary. Because of this, we have now. from the start, used conservative pricing assumptions of mid-to-late US$300s/mt when put next with our friends who’ve most well-liked use mid-to-late US$400s/mt. Even with our conservative pricing assumptions, our economics are extraordinarily strong.
Have offtake preparations been made?
As our undertaking has been considerably derisked with the conclusion of our research and the award of our mining allow, we have now been approached by a number of worldwide teams all requested offtakes. We’ve got two sturdy letters of intent (LoI’s) from two main teams and are in discussions with a 3rd world main group who has expressed a need for an offtake. We’ve got purposely held off on concluding an offtake as that is clearly the prize.
What, in your view, must be the largest takeaway from this interview?
The largest takeaway is that there’s a new participant on the town. We’re personal and have invested our personal capital with our two companions to show up what’s the greatest MoP undertaking on the earth. We’ve got put our cash the place our mouth is.
CANADIAN DOMINANCE
MoP and sulphate of potash (SoP) are the 2 primary potashes. SoP is a specialised fertiliser used for particular crops and has a distinct though correlated market dynamic. It’s a smaller, extra specialised market.
MoP, a 75-million-ton-a-year market, has been usually dominated by Canadians, with what was the Potash Company of Saskatchewan, and which is now Nutrien.
MoP is described as being an indispensable part of fertilisers and there’s reportedly a direct unfavorable influence on crops if MoP is withheld from the fertiliser combine. The massive three main vitamins in industrial fertilisers are nitrogen, phosphorus and potassium, that are invariably highlighted as NPK.
