Salt lake miners on the sell at Dowerin

Australian Potash Ltd, one of five Perth-based companies in a race to be first to produce commercial Sulphate of Potash (SoP) fertiliser from brine beneath salt lakes in the Northern Goldfields and Great Sandy, Little Sandy and Gibson deserts, has booked a site at the popular field days.

“We were there (Dowerin) last year and we will be there again this year,” Australian Potash executive chairman Matt Shackleton said last week.

“We were the first resource company to have a booth at Dowerin last year and we found it worthwhile,” Mr Shackleton said.

“We’re progressing with our Lake Wells project (189 kilometres north-east of Laverton) so there’s plenty to talk about this year if people want to call in and ask us about it.”

Mr Shackleton said he and other Australian Potash personnel were keen to talk to farmers interested in being future SoP fertiliser customers, as well as potential investors in their two-stage project.

Australia imports 30,000-40,000 tonnes of SoP per annum and it sells for between $900 and $1000 a tonne here, and for the equivalent of more than $670/t on global markets.

Its price premium over the more readily available Muriate of Potash (MoP) generally restricts its use to higher value or salt intolerant crops such as nuts, grapes, citrus, strawberries and other berries, avocado, lettuce, tomatoes and potatoes.

However, its proponents project domestic use of SoP could about double to 75,000t/pa and its application broaden to include cereal crops, particularly in nutrient-depleted salt-affected areas, if it can be produced cheaply enough from WA brine.

SoP has the lowest salt index of any of the potassium fertilisers.

There is also a potential prize for the first local company into production of a significant share of a global market estimated at seven million/tpa with annual growth of 5 per cent and with only three other countries as major producers of SoP from brine – China, the United States and Chile.

Australian Potash believes it will be able to produce SoP for export at $368/t during stage one and for $339/t in stage two of its project.

Much of the world’s present SoP supply is created by the environmentally-unfriendly Mannheim process of reacting MoP with sulphuric acid at high temperature.

At the end of last month Australian Potash announced testing by its Canadian engineering consultants Novopro confirmed sulphate-rich brine at Lake Wells and that the proposed SoP production process was suited to additional non-Mannheim conversion of MoP to SoP.

Essentially, as well as processing brine from its proposed bore field and solar evaporation ponds on the surface of Lake Wells, Australian Potash could also put MoP mined elsewhere through its processing plant to increase SoP production.

On the strength of the test results, it increased its stage one production forecast by half to 150,000tpa and to 300,000tpa in stage two.

“The Lake Wells SoP project has very high levels of sulphate, which itself is a valuable fertiliser component,” Mr Shackleton said.

“Sulphate provides a natural, high-quality source of sulphur, often referred to as the fourth ‘macro-nutrient’.

“Unlike the Mannheim process, the conversion process we will use does not create the additional reagent expense associated with purchasing sulphuric acid, as sulphate is already present in our brine.

“In fact, the economic case for developing this conversion facility is compelling in light of the low marginal operating costs associated with producing an additional 50,000 to 100,000 tonnes of SoP from essentially the same plant.”

Mr Shackleton said a similar non-Mannheim conversion process was used by Compass Minerals at its Ogden, Utah, Great Salt Lake plant in the US, the largest brine SoP operation outside of China, with solar evaporation ponds covering 20,234 hectares.

He said Australian Potash completed a native title approval process for its three mining lease applications at Lake Wells last month, clearing the first of two major hurdles facing each of the five companies hoping to produce SoP from WA salt lake brine.

The applications were advertised for native title purposes in January, no claims were notified by an April deadline and no claims were registered by the May 11 deadline, ending the process, he said.

“We consider the completion of the native title process over the proposed mining lease application areas to be a major milestone and beneficial to our development timeline,” Mr Shackleton said.

Reward Minerals Ltd has a signed agreement with the Martu People for its Lake Disappointment SoP project near where the Canning Stock Route and Talawana Track intersect in the Little Sandy Desert, 365 kilometres east of Newman.

Kalium Lakes Ltd is the only other of the five SoP companies to have completed a native title process.

It has agreement over part of its Beyondie Potash project on a chain of salt lakes between Kumarina roadhouse, 158 kilometres south of Newman on the Great Northern Highway, and the Canning Stock Route.

None of the five have obtained environmental approvals from the State Environmental Protection Authority (EPA) and the Federal Department of the Environment and Energy (DoEE) for their full-scale projects.

Environmental approvals are likely to be the biggest hurdle the companies will have to clear before commercial production can begin.

Most of the companies have been raising funds in the past two months with Australian Potash’s Lake Wells neighbour Salt Lake Potash scheduled to complete the second tranche of its $17.63m private share issue on Friday next week.

It intends to build a “proof of concept” SoP pilot plant at Lake Wells and hopes to harvest its first salts for processing next year.

Agrimin Ltd raised $13.2m last month through a private share issue to institutional investors and an entitlement offer to existing shareholders to further work on its Lake Maclay SoP project on the WA-Northern Territory border in the Gibson Desert.

Kalium Lakes raised $4.5m last month through an over-subscribed share placement to “domestic and overseas institutional, sophisticated and professional investors” to fund pilot evaporation ponds and other works at its Beyondie project.

At Reward Mineral’s annual meeting on May 31, former long-serving managing director Michael Ruane was returned to the job with a show of hands after stepping down earlier in the year to make way for chartered accountant Gary Lethridge.

Mr Lethbridge was appointed on April 3 but resigned last month.

Chairman Colin McCavana told the meeting Reward had lodged environmental submissions with the EPA and DoEE and had prepared an environmental scoping document for the EPA.

The resultant agreed scope of works was being carried out to satisfy EPA approvals for the project, Mr McCavana said.

Reward claims to have the biggest SoP resource at 596m tonnes beneath Lake Disappointment.

It is proposing a mine life of more than 30 years producing SoP at a rate of 400,000t/pa and at a cost of $328/t.