First salts produced in SoP project race

Kalium Lakes Ltd (KLL) announced to the Australian Stock Exchange (ASX) last week potassium salts had started to precipitate in large-scale pilot ponds at its Beyondie Sulphate of Potash (SoP) fertiliser project, 160 kilometres south east of Newman.

Revised capital expenditure and operating cost estimates for commercial SoP production were being independently reviewed before a pre-feasibility study (PFS), including an updated mineral resource statement, was released before the end of the month, KLL told the ASX.

The PFS is based on stage one of the Beyondie project which covers 6369 hectares of Little Desert salt lake, or just 21pc of the 30,225ha total lake surface area available to it, KLL said.

It also continued to defend its higher initial cost choice of building lined concentrator and harvest ponds off the lake surface to recover potassium, manganese and other salts from brine pumped from beneath a chain of salt lakes.

The cost of building and lining the ponds, including cut and fill earthworks to create tiered pond floors, was about $5.40 a square metre, it said.

This amounted to about 20pc of the total capital cost of the project, KLL said, and was based on actual costs during construction of the pilot ponds completed in July.

A key reason behind its decision, it said, was the ability to create tiered ponds off lake so brine could continuously gravitate through the ponds system without needing to pump it.

It would also minimise the pondage footprint by not having to compensate for leakage and maximise potassium recovery through periodic harvesting, draining and removal of all salts, including excess sodium.

It would avoid the ongoing capital cost of regularly increasing the height of on-lake evaporation pond walls to allow for floor build-up of excess sodium salts over time.

KLL said it was considered impractical to attempt to use heavy equipment over large areas of boggy salt lake to build or modify ponds or harvest salts.

As previously reported in Farm Weekly, KLL is one of five Perth-based companies in a race to be first to produce low salt, index granular SoP fertiliser from brine at remote WA salt lakes.

So far it is the only one to use lined evaporation ponds.

Three of its competitors plan to use the flat salt lake surfaces to minimise pond construction cost.

Its closest competitor in terms of progress, Australian Potash Company (APC), plans to build concentrator ponds for its SoP project on the surface of Lake Wells, 198km north-east of Laverton, but its harvest ponds will be off lake.

APC has said it can take advantage of an impermeable sub-surface clay layer to minimise on-lake pond leakage and to reduce construction cost.

It hopes to have its own large-scale five-pond pilot evaporation system completed and starting to fill this month.

KLL managing director Brett Hazelden said the “production of first salts was achieved at the expected point and time” within its large-scale pilot pond commissioning.

“It continues to confirm the quality of our previous work, both in the laboratory and during small scale pilot trials,” Mr Hazelden said.

“It is important to continue to focus on real data, obtained from actual operational and construction outcomes.

“The veracity and rigour of our approach and work will be vitally important when looking to secure project finance on completion of a bankable feasibility study.”

Mr Hazelden said a key strength was the quality of the KLL team.

“We have a strong team of proven project developers, experienced in all phases of a project’s life from exploration through to construction, commissioning and operation, both in the Pilbara and overseas,” he said.

KLL claims to have one of the highest grade potassium resources with lowest impurity levels in Australia at its Beyondie project.

It expects this to result in lower capital and operating costs when compared to similar SoP projects at other locations.

It also has a SoP joint venture exploration project with BC Iron Ltd at Lake Carnegie, about 220km north-east of Wiluna and between its Beyondie chain of salt lakes and Lake Wells where APC and Salt Lake Potash have SoP projects.

In other SoP project developments, a funds-raising special share offer by APC to existing shareholders is due to close on Tuesday.

APC plans to raise about $5 million through an oversubscribed private placement of 30 million new 10 cent shares, the share purchase plan and a loyalty options issue.

The funds are to be to be split between its Lake Wells SoP project and a gold project east of Laverton.

Last month APC’s Lake Wells neighbour, Salt Lake Potash (SO4), notified the ASX Lombard Odier Asset Management (Europe) Ltd (LOAME) had lifted its stake in the company to 7.73 per cent, or 13.54m shares, as largest institutional shareholder.

LOAME is the London-based arm of one of the largest private Swiss banks.

It has purchased more than 2.4m shares in SO4 since June documents lodged with the ASX show.

Australian agriculture annually uses 30,000-40,000 tonnes of imported SoP which sells for about $950 a tonne.

Companies racing to be first to produce it from WA salt lake brine hope production costs will be about a third of that price.

The real prize will be a potentially significant share of a global SoP market estimated at seven million tonnes a year with annual growth of 5pc and only three other countries as major producers of SoP from brine - China, the United States and Chile.

There is also interest in brine SoP production in India.