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Focusing on the Dallol Potash Project in Ethiopia

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Message: Lower CAPEX ?

So the Ethiopian government will provide a power line to the project (according to the YARA FS) and a road is already promised, that fits well with ERCOSPLAN`s recommendations about lowering the already low CAPEX, see below for excerpts from the FS:

>>In this study HFO generators have been selected to provide the full energy requirements for the operation. This has resulted in a large proportion of the OPEX being dedicated to fuel for power generation. This decision may not be optimal, and studies should be initiated to evaluate the economic potential of using alternative energy sources to reduce OPEX. For example:

o Connection to the national grid ~120 km from project site.<<

According to the FS a 1 MTPY opearation will use 7000 m3 of diesel or heavy oil annually don`t know how much that will be in Dollars or Birrs but probably more than Ethiopian electricity even with this low oilprices.

Another cost reducing aspect recommended in the FS, and another reason to go ahead with the SOP right away (more on that in the SOP PEA I suppose) is:

>>To increase the lifetime of the operation or the annual production it is recommended to investigate the extraction of Carnallite and Kainite for production of MOP and/or SOP products. Solution mining the Carnallite in the deposit in particular will also greatly reduce sustaining CAPEX requirements by vastly increasing the life of a cavern, thereby reducing the amount of new caverns which must be drilled annually. <<

Time will tell...

1
Feb 21, 2015 05:21AM
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