SoP fertiliser production delayed to 2021

SoP fertiliser production delayed to 2021

Agribusiness
Kalium Lakes' Beyondie Sulphate of Potash project early last year before the accommodation village, airstrip and power station were constructed. A start to commercial fertiliser production has been pushed back by up to six months.

Kalium Lakes' Beyondie Sulphate of Potash project early last year before the accommodation village, airstrip and power station were constructed. A start to commercial fertiliser production has been pushed back by up to six months.

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Salt Lake Potash (SO4) is now expected to be the first from a number of prospective Western Australia SoP fertiliser producers to begin commercial production at its Lake Way project, 12 kilometres south of Wiluna.

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LOCAL production of Australia's first Sulphate of Potash (SoP) fertiliser is likely to be delayed and is now expected in the first quarter of next year.

Salt Lake Potash (SO4) is now expected to be the first from a number of prospective Western Australia SoP fertiliser producers to begin commercial production at its Lake Way project, 12 kilometres south of Wiluna.

Previous front runner Kalium Lakes Ltd (KLL) is believed to have abandoned its scheduled December this year production start up target for its Beyondie SoP project which is based on a string of salt lakes in the Little Sandy Desert 160 kilometres south east of Newman.

KLL is understood to have pushed its Beyondie start up date back by up to six months after an independent review of the capital expenditure costings and contingencies, future financing requirements and ongoing impact of the COVID-19 pandemic on its operations.

It has not submitted a March quarterly report to the Australian Securities Exchange (ASX) and its shares have been in voluntary suspension since February 24 when the review was announced.

On Tuesday the company declined to comment on the likely production delay and reports it was trying to raise up to $60 million with an emergency share placement and rights issue to complete construction of the Beyondie project.

Potential significant dissolution of existing shareholdings, a potential 70 per cent share price collapse, questionable accuracy of modelling of hypersaline brine flow rates, cost overruns in a gas pipeline and changes to meet offtake customer product specification and a lack of corporate communication have been slammed by investors on stock market trading forum HotCopper.

KLL has committed to making a detailed explanation to the ASX on or before Friday, May 29.

As reported in Farm Weekly recently, Pilbara cattleman, company co-founder and major individual shareholder Brent Smoothy, along with Mark Sawyer representing KLL's largest overall shareholder Grenstone Resources, have been appointed non-executive directors.

KLL's projected initial SoP production was to be 90,000 tonnes per annum contracted to German salt and fertiliser company K+S for local and global distribution.

K+S is understood to be seeking German government assistance to cope with the flow-on impacts of the COVID-19 pandemic on its international business and a high debt loading.

The pandemic is understood to have interrupted plans to sell off parts of its salt business to reduce debt.

As previously reported in Farm Weekly, S04 has fast-tracked its Lake Way project by using hypersaline brine pumped from the Williamson pit, a former open cut gold mine at the north end of the lake, as initial feedstock for its evaporation ponds while it constructed 35 kilometres of brine abstraction trenches across the surface of the salt lake.

In its March quarterly report released to the ASX on April 30, SO4 said it had secured offtake agreements for 224,000t of its projected 245,000t per annum premium soluble fertiliser production.

It said a successful institutional share placement last month had raised $20m which would "enable SO4 to continue to deliver the Lake Way project to achieve production in Q1, 2021".

There are at least six other local projects aiming to produce SoP fertiliser from remote WA salt lake brine.

The race into SoP production is seen to provide significant benefit for the first to achieve it because they will be creating a new and potentially highly lucrative import replacement business and founding a new WA export commodity industry.

Australia currently imports about 40,000tpa of SoP.

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