Ground broken in major fertiliser race

Newest entrant Kalium Lakes Limited (KLL) last Friday told the Australian Securities Exchange (ASX) it has started constructing “large scale pilot evaporation ponds” at its Beyondie Sulphate of Potash (SOP) project, 160 kilometres south-east of Newman.

Construction verification and leakage trial results had confirmed the choice to build salt lake brine evaporation ponds off the lake surface and some production bores, pumps and pipelines were in place to feed evaporation ponds, KLL told the ASX.

On Wednesday last week Salt Lake Potash (SO4) shareholders unanimously approved a second tranche issues of 10.3 million shares to raise a further $4.4m towards building a proposed pilot SoP processing plant at its Lake Wells project, 189km north-east of Laverton.

The shares were to be offered to institutional and private investors from last Friday as part two of a plan to raise $17.63m towards building a “proof of concept” pilot plant at Lake Wells, with first salts expected to be harvested for processing next year.

KLL and SO4 are two of five contenders in the race to be first to produce commercial SoP fertiliser from potassium-rich brine beneath salt lakes in the Northern Goldfields and Great Sandy, Little Sandy and Gibson deserts.

Winner’s prize is capturing most of Australia’s imported 30,000-40,000 tonnes of SoP per annum market, where it sells for between $900 and $1000 a tonne, with the potential to increase that to an estimated 75,000tpa.

There is also the lure of a significant export share of a 7mtpa global market with annual growth of 5 per cent, an international price equivalent of more than $670/t and only three other countries as major producers of SoP from brine – China, the United States and Chile.

KLL managing director Brett Hazelden said on Friday construction of the large scale pilot evaporation ponds was “a significant milestone” for the project which is based on a chain of ancient salt lakes between the Great Northern Highway and Canning Stock Route.

“This phase of construction commenced within 25 days of completing the recent $4.5m capital raising,” Mr Hazelden said.

“We understand these ponds are the largest facility currently approved and under construction across the Australian SoP exploration sector, which is quite an achievement for our hardworking team.

“This co-ordinated effort is another example which demonstrates KLL’s ability to rapidly implement site-based project development and associated de-risking activities.”

Mr Hazelden said trials of four construction methods and different materials had confirmed KLL’s decision to build its evaporation ponds off lake – some of its competitors propose to use flat salt lake surfaces as a base for either raised evaporation ponds or trenches to collect and evaporate brine.

KLL believed the off-lake system was best, based on capital cost, operating cost, pond leakage rates, potassium recovery and efficient use of the brine resource, he said.

Mr Hazelden said KLL planned to use impervious liners in its evaporation ponds because leakage tests had shown even small volume seepage required more bores, brine collection trenches and pumping at extra capital and operating costs to compensate.

Unsealed pond floors and walls resulted in potassium salt losses, he said.

On-lake proposals were also “impractical”, Mr Hazelden said, because of the use of heavy equipment on soft, boggy lake surfaces during pond construction and later during salt harvesting.

He said a decision to build on the lake would have potentially delayed KLL’s first production “by between 12 and 24 months”.

The Beyondie project comprises 15 granted exploration licences and a miscellaneous licence covering an area of about 2400km2.

KLL also has a SoP joint venture with iron ore miner BC Iron Ltd at Lake Carnegie, about 220km north-east of Wiluna and between its Beyondie project and SO4’s Lake Wells project.

Farmers intrigued by the prospect of cheaper SoP fertiliser produced within a few years from remote WA salt lake brine, can find out more at the Dowerin GWN7 Machinery Field Days, August 30 and 31.

A third competitor in the race to be first to produce SoP from WA salt lake brine, Australian Potash Ltd, has taken a stand at Dowerin for the second year running.

On Monday Australian Potash informed the ASX it has signed a second non-binding memorandum of understanding (MoU) for supply of SoP to Chinese agriculture and fertiliser companies.

The latest MoU is with Hubei Agricultural Means of Production Group Co Ltd for sales of up to 100,000tpa of SoP from Lake Wells.

It follows an MoU on June 9 with Sino-Agri Holdings Company Limited, one of China’s major fertiliser companies, to take up to 100,000tpa or about 30 per cent of Australian Potash’s estimated production from stage two of its project.